Scottish Budget: Mackay’s magic hat is fresh out of rabbits – John McLellan

He might need a big rabbit and an even bigger hat, but by tonight we will know if Scottish Finance Secretary Derek Mackay has staved off a crisis by putting the cover back on the axe he was about to cleave through local services.

Thursday, 31st January 2019, 9:58 am
Updated Thursday, 31st January 2019, 10:00 am
Finance Secretary Derek Mackay's budget is being debated today in the Scottish Parliament. Picture: PA
Finance Secretary Derek Mackay's budget is being debated today in the Scottish Parliament. Picture: PA

Today the Scottish Parliament debates Mr Mackay’s budget presented just before Christmas and with the Greens set to join the other opposition parties in opposing the plan because of the effect on councils, the SNP does not have enough votes to rubber-stamp the plan.

If unresolved it could result in an election which, after the events of the past fortnight, is something the SNP will be keen to avoid. Locally, it’s hard to see how the SNP-Labour council administration could survive a full-blown campaign in which Labour would pile the blame for decimated services on the SNP, from which it is desperate to claw back support.

But never mind a full national election, it’s by no means certain the Coalition can survive the council by-election in the Leith Walk ward, created by this week’s resignation of Labour’s finance vice-convener Marion Donaldson. With one of the SNP’s harshest critics, Cllr Gordon Munro, leading Labour’s local effort as part of his bid to become the area’s MP, the gloves will be off. And with an already angry membership Labour’s leader Cammy Day will find it difficult to rein in his side in what could be a bitter tussle.

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Publicity has focused on the £41m Edinburgh Council says it has to find as a result of the Mackay budget, but that’s not the whole story when health and social care is included. The Edinburgh Integration Joint Board which manages health and social care service on behalf of the council and NHS Lothian, also faces a £29m cut from a budget of around £225m. £19m of this is as a result of council cuts and £10m directly from the Scottish Government, so local services actually face a £70m cut.

Only through clever accounting has the SNP-Labour administration masked the headline figure by effectively burying some of their cost-cutting in the health and social care budget, but behind the scenes officers are arguing that cuts like the £500k from Marketing Edinburgh are necessary to protect social care budgets. It’s a reasonable argument to make, but not at the same time as separating the reductions to make the overall figure appear less dramatic.

Add to that a10 per cent pay claim from teachers which the council has no chance of meeting and it all amounts to a crisis potentially unmatched since the 1970s. Those teachers seemingly determined to strike because a 9 per cent pay rise isn’t good enough should explain which other local services they would like to see slashed to make it ten.

When Mr Mackay has more money to spend than before thanks to the Barnett formula, he has some chutzpah to claim none of this is his fault. It is also somewhat disingenuous to say more is being spent locally when without a Foreign Office, diplomatic service, armed forces and international obligations the reality is that virtually everything the Scottish Government does is local spending of one sort or another.

In the court of public opinion, the nuances of public finance are irrelevant; health, higher education, trunk roads, police and the fire & rescue service all boil down to local delivery even if they are controlled centrally. And in any case, locally or nationally, the SNP is still responsible and one way or another has been since 2007.

What rabbits can he pull? Seemingly at the mercy of the Greens’ class warrior Patrick Harvie, egged on by Labour, the answer looks like more taxation. Then watch the tax receipts disappear, like the botched Stamp Duty replacement, while Scotland’s competitiveness plunges.