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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.

Tuesday, 20 September 2011

Spending Review choices

John Swinney MSP will present his spending plans for the next three years to Parliament tomorrow. It is unlikely to make good reading. So here are a few things UNISON members should be watching out for.

The context of course is the UK ConDem coalition's ideological attack on public services, dressed up as a deficit reduction plan. This means a further real terms cut in the Scottish budget, just at a time when the economy needs public spending the most. However, that doesn't mean that John Swinney doesn't have choices, they may not be easy ones, but choices there are.

The first thing we will be looking for is the choices he will make on public service pension contribution increases. The UK government is docking around £240m (recurring revenue) from his budget over the next three years in anticipation that he will enforce a 50% increase in the pension contributions of staff in NHS Scotland, teachers and others. The UK government wants him to do the same in the Local Government Pension Scheme, although there are no Barnett consequentials if he refuses. If he does increase contributions in the LGPS, this will be a 'made in Scotland' pensions tax. No point blaming the big boy down south on this one.

Next is public service pay policy. This is the second year of a real term pay cut for public service workers in Scotland. If that was to be continued for a third year it will add up to a double digit cut in living standards. For all the talk of cuts it is important to remember that the wage freeze has made the biggest contribution to the savings pot.  I suspect we will hear more about the 'social wage' and in particular the 'benefit' of the Council Tax freeze. This won't wash as this tax freeze benefits the wealthy home owner, not our low paid members. It also costs jobs and services.

Then we have the impact of the budget on jobs and services. Even with some protection for the NHS budget, inflation and increasing demand will still result in health cuts. The Non-Departmental Public Bodies faced far bigger cuts than the average last year and they will be concerned again. However, it will be the local government budget that will merit most scrutiny. The Council Tax freeze means they have no local flexibility and they are also facing increasing cost pressures. John Swinney may wish to incentivise reforms with financial sticks and carrots, and this may make it difficult to compare budgets. Watch out for some smoke and mirrors under this heading.

We should of course remember that none of this pain is necessary. It is low paid workers and communities who are again paying the price of corporate greed. It beggars belief that the cheerleaders for corporate greed, the CBI, are calling for more services to be handed over to them in this morning's Scotsman. Have they not done enough damage?

There are few easy choices for John Swinney tomorrow. But choices there are.

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