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It mostly covers my work as UNISON Scotland's Head of Policy and Public Affairs although views are my own. For full coverage of UNISON Scotland's policy and campaigns please visit our web site. You can also follow me on Twitter. I hope you find this blog interesting and I would welcome your comments.

Wednesday, 20 October 2010

UK Spending Review

George Osborne's CSR announcement was every bit as bad as we expected. A clear ideological drive to cut public services, using the budget deficit as a smokescreen.

The principles are apparently fairness, reform and growth. It doesn't look fair when the poorest in society will be the hardest hit by cuts in services and welfare benefits. The bankers bonuses are barely scratched and corporate tax dodging goes unpunished. How taking half a million workers away from services is going to 'improve' them, remained unexplained by the Chancellor.

It was all classic spin. Announce huge cuts then offer a few sweeties to sugar the pill.

In Scotland the Barnett consequentials are every bit as serious as expected. In practice the impact will be greater because councils and health boards have additional costs over and above these allocations. Councils and health boards have to live in the real world where inflation is more than double the nominal Treasury assumption.

We calculate that some 60,000 public sector and 65,000 private sector jobs could go in Scotland because of these cuts, They could cost the Treasury around £500m in lost tax revenue and £640m in increased benefit payments - adding to the annual deficit and almost entirely canceling out the saving to the public sector pay-bill.

For those public sector workers who stay in employment they face a pay freeze and a 3% increase in pension contributions. This at a time when their pension benefits will be cut by 15% as a consequence of the proposed shift of the uprating index from RPI to CPI.

Now that is a double whammy!

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