Swinney in bid to spend more on capital projects

The public sector is being squeezed because of spending cuts

The Scottish government is planning a radical shift in its spending priorities, BBC Scotland has learned.

It is understood that Finance Secretary John Swinney will announce plans to move some day-to-day spending to projects involving capital investment.

This will be in a bid to save jobs and promote economic growth.

Mr Swinney is due to outline his spending priorities for the forthcoming financial year before MSPs at Holyrood next Wednesday.

Labour finance spokesman Andy Kerr accused the government of "bare-faced cheek" - saying the SNP's Scottish Future's Trust alternative to PPP/PFI schemes had failed to deliver vital capital projects.

'Lost investment'

The possibility of a shift in policy is in line with views expressed by Professor Joseph Stiglitz, the Nobel Prize winning economist recently appointed to advise Scottish ministers.

As things stand, capital investment is due to face much tighter constraints than revenue, down 38% over four years.

BBC Scotland's political editor Brian Taylor said that although taking day-to-day spending and using it on capital projects will add to the pressure on revenue spending, ministers believe that maintaining capital investment is vital to economic growth.

Mr Kerr said: "Ministers have some serious choices to make about whether they are going to continue implementing Tory cuts or whether they are prepared to set out a different agenda for Scotland.

"The Scottish Futures Trust has so far failed to build a single school and almost £2bn of investment has been lost.

"If the BBC is correct, then John Swinney is planning to make up the difference by cutting spending on health and education."