Magazine article Public Finance

Prospects for Scottish Economy Are Worse Than Initially Feared

Magazine article Public Finance

Prospects for Scottish Economy Are Worse Than Initially Feared

Article excerpt

The prospects for Scotland's budget are 'grim', with the outlook worse than expected, according to leading public finance academics.

In a review of spending plans, a Glasgow-based think tank, the Centre for Public Policy for Regions, warned that Scotland in 2011/12 could face cuts of up to 6.2% - equivalent to a cashterms réduction of £1.5bn.

Report author John McLaren said: 'In the first decade of devolution, we had real-terms increases of 5% to 6% a year. Next year, we're looking at a 5% to 6% cut rather than an increase so it means that the whole tone changes from what you can increase to what you can cut."

The CPPR report pointed out that a fall in spending of up to 6.2% - instead of the expected 3% real -tenus reduction - is not simply due to the UK government's actions but triggered by three 'independent' elements. …

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