Magazine article Public Finance

Midwinter Takes Issue with £3Bn Scottish Cuts Forecast

Magazine article Public Finance

Midwinter Takes Issue with £3Bn Scottish Cuts Forecast

Article excerpt

Forecasts of an unprecedented £3bn cut in Scottish public services over the next three years are unreliable, an expert on public finance has told the budget review panel.

Arthur Midwinter, a visiting professor at Edinburgh University and a finance adviser to the Parliament's Labour group, said there were no hard numbers in the public domain to validate the forecasts. He claimed figures were based on 'questionable assumptions'.

'The reality is no decisions have been made and the projections in the Pre-Budget Report are not fixed funding envelopes. Forecasts based on them are of little use to decision makers,' he stated in his submission to the independent panel, appointed by Scottish ministers to present public spending options.

The panel's recently published consultation paper said that under any reasonable assumptions, Scotland's Departmental Expenditure Limit was likely to fall by £3bn - 3.6% per year - between 2010/11 and 2013/14.

But Midwinter argued that the forecasts were based on 'questionable assumptions regarding spending projects in the PBR, which roll forward the current cost of services' and are 'neither plans nor allocations'.

He added: 'In my view, forecasts based on soft numbers in conditions of fiscal volatility and political uncertainty are at best "guesstimates". …

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