MSPs challenge Scots budget plans

Ministers said savings had to be made across the public sector

The Scottish government has been urged to explain how its budget plans will meet its top priority of boosting economic growth.

Holyrood's finance committee said ministers must answer concern that the £33bn spending proposals for 2011-12 focus on shielding the public sector.

The committee has been examining the budget, before it faces its first parliamentary vote next week.

Treasury spending cuts have resulted in a £1bn reduction in the Scots budget.

Speaking as the finance committee published a report on the budget, its convener, SNP MSP Andrew Welsh, said: "The finance committee recognises in its report that this is the most difficult budget since devolution, and that producing a balanced budget in these circumstances will be a highly significant challenge for both the government and the parliament.

"In our report, we have scrutinised the draft budget by assessing the extent to which the government's priorities contribute to its core purpose of increasing sustainable economic growth.

"We have asked the government to respond to the view of a number of witnesses that the government's priority is the protection of public services and not economic growth."

The committee made several recommendations in its report, including:

• Asking the government to indicate how many public sector jobs will be lost as a consequence of the draft budget

• Inviting ministers to explain how providing of universal services, such as concessionary travel and free prescription charges, may hit other areas of the budget

• Asking the government to respond to criticism that its decision to protect health spending means safeguarding public services takes priority over economic growth.

The finance committee's report criticised plans by Finance Secretary John Swinney to raise £30m through levying extra rates on the largest retailers.

That measure is expected to be voted down by MSPs - although the minister is challenging his rivals to spell out other ways of raising revenue or cutting spending.

But the finance committee supported government plans to continue the council tax freeze.

The minority government's draft budget which needs opposition support to get through parliament, will see cuts in housing, education and tourism spending.

Public sector salaries will be frozen for a year and big bonuses ended, while a 3% "efficiency savings" target will be imposed across public services.

SNP ministers have also agreed to limit cuts in local authority spending to 2.6% if councils deliver SNP priorities such as continuing the council tax freeze for a fourth year.

As part of the deal, the councils would also have to maintain police officer numbers - which have been boosted by 1,000 since the SNP came into power in 2007.

Council leaders would see their budgets cut by 6.4% if they failed to agree to the deal.

Although frontline NHS spending will be protected, the SNP has pledged to reduce the number of senior managers in the health service by 25% over four years.

'Extremely significant'

David Whitton, Labour's deputy finance spokesman, said: ''Budget cuts to the bodies that drive economic growth along with reductions in capital spending on infrastructure, education, housing and regeneration all support the view expressed by members of the Economy, Energy and Tourism committee, that the budget is not best geared to support economic growth.''

Derek Brownlee, the Conservative's finance spokesman, said: ''Regardless of the fate of this government and this budget, the report shows that only the Scottish Conservatives can ensure the council tax freeze continues and only the Scottish Conservatives can prevent tax rises on business by Labour or the SNP."

Liberal Democrat Finance spokesman, Jeremy Purvis, said: "The Finance Committee's criticisms of the Scottish Budget are extremely significant. The clear point has been made that the budget doesn't meet the needs of the economy.''

The SNP's Joe Fitzpatrick, who is a member of the parliament's finance committee, said: "John Swinney and the SNP have put forward a balanced budget for Scotland that spares our pensioners and families from council tax rises in order to help household budgets and redresses the balance for business with a small levy on supermarkets.''