Extra £331m for Scottish Government

Dec 5 2012

An extra £331 million will be available to the Scottish Government as a result of decisions by the Chancellor in his autumn statement.

Finance Secretary John Swinney welcomed the boost to capital spending but accused George Osborne of lacking a coherent plan and taking steps that are only "half way to common sense".

Mr Swinney said: "After two and a half years in office the Chancellor has finally heeded Scotland's calls to boost capital spending. The steps he has taken are welcome but they only take us half way towards common sense in terms of investment and there is still a lack of a coherent plan to return the economy to growth."

The cut to the capital budget is now 25.9% over the spending review period to 2014-15, rather than 33%, in real terms, according to the Scottish Government. Other areas of the Chancellor's statement were welcomed.

A planned rise in fuel duty was cancelled, helping the owners of the 2.7 million vehicles in Scotland while saving the typical driver £40 a year and a haulier £1,200 a year, said the UK Government's Scotland Office. Perth and Aberdeen will be given a share of £50 million funding to deliver ultra-fast fixed broadband access and large areas of public wireless connectivity.

But Mr Swinney criticised "delays" by the Chancellor in adapting to the economic circumstances. He said: "The Chancellor's decision to extend austerity to 2018 show how badly his plan has failed. The only certainty now offered by the UK is five more years of public spending cuts. Through their ill-thought-out welfare reform, the UK Government is also causing another £200 million to be taken out of the Scottish economy.

"The Treasury's own modelling shows that households across the country will be worse off next year with the average household losing out. Moreover, with the exception of those in the top 10%, the poorest households face the biggest proportionate reduction in income."

Scottish Labour leader Johann Lamont said: "This belated attempt by George Osborne to turn around his disastrous handling of the UK economy does present an opportunity for the SNP Government to make good on its plans for shovel-ready projects.

"We know that the SNP Government has been demanding more funds for capital investment while drastically cutting its own budget for shovel-ready projects. The Government's own figures show that the value of the non-profit distributing financed capital investment was cut from £353 million to just £20 million.

"We cannot afford to get this wrong again. The thousands of families dealing with unemployment or under-employment need investment that will create growth and quality jobs in Scotland. Until now we have seen warm words but no action from the SNP Government. Now there is no hiding place. John Swinney must not blow this opportunity to get the Scottish economy back on track."