I made a detailed presentation to our organising staff yesterday on our analysis of the budget position. This reflected the UK budget on Wednesday and our best estimate of the likely position over the next few years.
What is clear is the significant disconnect between the broadly standstill Scottish Government allocations to councils and health boards and the huge cuts these organisations are planning in the coming financial year. The picture is still limited as not all decisions have been made, but so far we have identified cuts of £553m and job losses of 6464. I believe the reasons for this disconnect include:
• Real inflation exceeds GDP inflator (particularly energy costs)
• Increased demand on services during recession
• Concordat and other service growth (e.g. class sizes)
• Organisations are strengthening their unallocated balances
• Most cuts will have only a part year impact
• Public service organisations are assuming greater cuts over next 3-5 years and are starting to make those cuts now.
These points are reflected in our evidence, submitted today, to the Scottish Parliament Finance Committee inquiry on future budget strategy. We also examine the responses being considered by some councils and set out our alternative budget strategy.
The current financial crisis is being used by those whose Neo-Liberal market ideology got us into this financial crisis, to reshape public services on the basis of their failed ideology. Cutting public services is not the only way to cut debt. Raising taxes for those who can afford to pay more and clamping down on tax avoidance will also reduce the deficit. As will cutting out wasteful spending including PPP schemes, Trident and private consultants.
I finished the day at the AGM of our NHS Glasgow & Clyde Branch. This is the largest health union branch in the UK with nearly 17,000 members. Their health board is planning around £61m of cuts in the coming year impacting on a wide range of services. This is the sharp end of the budget impact outlined above. Workers and communities paying the price for the failure of free market economics.