Thursday, 27 June 2013

Scottish implications of UK Spending Review

The UK Spending Review confirms a real terms cut in the Scottish Government’s budget of £333m between 2014/15 and 2015/16. The capital budget will have been cut by 26% in real terms since 2010.
The ‘new’ money claim by the Secretary of State, is actually largely borrowing powers that have to be repaid from a reducing revenue budget. Instead of the promised growth, £3.2bn is being taken from the Scottish economy.

Specific proposals directly impacting on public service workers include:

·         A UK cut of 144,000 jobs, on track with the OBR estimate of 1 million job cuts from 2011 to 2018. It is always difficult to translate this into Scottish jobs, but we would estimate around another 40,000 jobs on top of the 51,000 that have been lost since the crash.

·         A further year’s 1% cap on pay increases in the public sector, on top of the current cap and previous pay freeze. While this doesn’t automatically apply to Scotland, the Scottish Government usually follows the Treasury’s lead on pay. TUC research published earlier this week showed the impact this had had on households, pushing 180,000 children with a parent in the public sector into poverty. Real pay of Scottish public sector workers has fallen by 13% in past three years.

·         The abolition of automatic pay progression. This doesn’t automatically apply to Scotland and we will have to wait until the autumn to see if the Scottish Government slavishly follows Osborne on this issue. We will be pointing out that the rate for the job is the top of the scale and increments are paid while new staff learn the job.

Overall, there was little positive in the Spending Review. UNISON General Secretary Dave Prentis summed up the problems:

Today’s spending review reveals the true extent of the Government’s failure.  The Chancellor has got it horribly wrong - despite all the promises, the austerity measures and cuts, he still hasn’t got the country out of recession.  We are still in the slowest economic recovery in 100 years and yet all we get from this Chancellor is more of the same.”


Further information:

Spending Review documents in detail

Dave Watson’s analysis

Scottish Government response

UNISON UK reaction on pay progression


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