Magazine article Public Finance

SNP 'Faces £2Bn Shortfall', Says Expert

Magazine article Public Finance

SNP 'Faces £2Bn Shortfall', Says Expert

Article excerpt

The Scottish government's budget is heading for a shortfall of up to £2bn, a leading public finance commentator has predicted.

Professor Arthur Midwinter of the Institute of Public Sector Accounting Research at Edinburgh University said 'bogus financial arithmetic' by the Scottish National Party's minority administration had led to unrealistic budget plans.

Addressing a seminar for public sector officials on August 16, he said that the SNPs efficiency assumptions were wholly unrealistic. As a result, he expected the savings delivered to be much lower than predicted.

Midwinter, a former budget adviser to the Scottish Parliament's finance committee, added: 'Moreover, the SNP's plans underestimate the cost of their tax cuts by around £540m over three years. I predict a shortfall of between £1.5bn and £2bn on past practice.'

He explained that the budget shortfall would occur as a result of the likely gap between the SNP's spending commitments and the cash it is likely to have available.

The Treasury planning figure would only deliver around £500m per annum in new resources, compared with £1,250m in recent years, Midwinter said.

He was particularly critical of the administration's efficiency assumptions, saying these covered both cash and time-releasing savings which are intended to allow service outputs to increase at no extra cost. …

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