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Scottish government to freeze income tax rates in pre-election budget Scottish government to freeze income tax rates in pre-election budget
(35 minutes later)
John Swinney, Scotland’s finance secretary, is expected to freeze income tax and council tax rates in a pre-election budget on Wednesday in which he will seek to further his government’s anti-austerity agenda. John Swinney, Scotland’s finance secretary, is expected to freeze income tax and council tax rates in a pre-election budget on Wednesday wherein which he will seek to further his government’s anti-austerity agenda.
In his first budget with new powers to change Scottish income tax rates, Swinney is expected to reject calls from Scottish Labour for a commitment to raise rates in higher tax bands in 2017.In his first budget with new powers to change Scottish income tax rates, Swinney is expected to reject calls from Scottish Labour for a commitment to raise rates in higher tax bands in 2017.
Meanwhile, opposition parties have stepped up their calls for Swinney to bring public sector debt under control after a Guardian investigation disclosed that the debt was on course to reach £50bn.Meanwhile, opposition parties have stepped up their calls for Swinney to bring public sector debt under control after a Guardian investigation disclosed that the debt was on course to reach £50bn.
Swinney said his officials would hold talks with Audit Scotland and MSPs on introducing more detailed reports on public sector spending and liabilities – a key demand made by Scotland’s auditor general, Caroline Gardner.Swinney said his officials would hold talks with Audit Scotland and MSPs on introducing more detailed reports on public sector spending and liabilities – a key demand made by Scotland’s auditor general, Caroline Gardner.
Gardner told the Guardian that far more transparent government accounts were essential given the arrival of new income tax powers – starting in April 2016 and expanding into nearly full control of rates from April 2017 – and new borrowing powers for Holyrood. Related: Scotland's debt mountain: Holyrood's borrowing could hit £50bn by 2020
Gardner told the Guardian that far more transparent government accounts were essential given the arrival of new income tax powers – starting this April and expanding into nearly full control of rates from April 2017 – and new borrowing powers for Holyrood.
The Scottish government stopped short of endorsing Gardner’s specific request for a system of whole government accounting in which all public sector assets, spending and liabilities are listed, but said ministers were considering changes to financial reporting.The Scottish government stopped short of endorsing Gardner’s specific request for a system of whole government accounting in which all public sector assets, spending and liabilities are listed, but said ministers were considering changes to financial reporting.
“This will include consideration of further consolidation of accounts and Scottish government officials have offered to engage with Audit Scotland and with the public audit committee [at Holyrood] on the form and content,” a spokeswoman said.“This will include consideration of further consolidation of accounts and Scottish government officials have offered to engage with Audit Scotland and with the public audit committee [at Holyrood] on the form and content,” a spokeswoman said.
Swinney underlined his pledge to protect public services when he visited a new inpatient building at the Royal Edinburgh hospital on Monday.Swinney underlined his pledge to protect public services when he visited a new inpatient building at the Royal Edinburgh hospital on Monday.
Scottish government documents show that the building, the first phase of a privately financed redevelopment, has a capital value of £38.4m. Its full cost over its 25-year private management contract will be £116m. Union leaders predict several dozen NHS maintenance jobs will be lost there after private contractors take over their roles.Scottish government documents show that the building, the first phase of a privately financed redevelopment, has a capital value of £38.4m. Its full cost over its 25-year private management contract will be £116m. Union leaders predict several dozen NHS maintenance jobs will be lost there after private contractors take over their roles.
Indicating that he would be making cuts in other services after Holyrood’s budget was reduced slightly by the Treasury, Swinney said: “I am determined to protect key priorities such as schools, hospitals and police.Indicating that he would be making cuts in other services after Holyrood’s budget was reduced slightly by the Treasury, Swinney said: “I am determined to protect key priorities such as schools, hospitals and police.
“However, as a consequence of UK government spending decisions, the Scottish budget will continue to fall in real terms, as it has done since 2010, until the end of this decade. That places a significant pressure on the funding of our public services and requires us to continually reform the way in which we deliver those public services.“However, as a consequence of UK government spending decisions, the Scottish budget will continue to fall in real terms, as it has done since 2010, until the end of this decade. That places a significant pressure on the funding of our public services and requires us to continually reform the way in which we deliver those public services.
“Despite these pressures, the Scottish government will defend and protect the key priorities that the people of Scotland expect us to deliver on. Critical pillars of Scottish life – our schools, hospitals and police – will not be sacrificed to the chancellor’s austerity obsession.”“Despite these pressures, the Scottish government will defend and protect the key priorities that the people of Scotland expect us to deliver on. Critical pillars of Scottish life – our schools, hospitals and police – will not be sacrificed to the chancellor’s austerity obsession.”
Related: Scotland's PFI boom means £1.3bn a year bill is in the post
The Scotland Office said the real-terms cuts for Holyrood’s day-to-day revenue budget next year were very modest, at 0.7%. In cash terms, Swinney will get £390m more next year for both day-to-day spending and capital spending.The Scotland Office said the real-terms cuts for Holyrood’s day-to-day revenue budget next year were very modest, at 0.7%. In cash terms, Swinney will get £390m more next year for both day-to-day spending and capital spending.
Murdo Fraser, the Scottish Tories’ finance spokesman, said PFI contracts – which were first introduced by the Tories and have been heavily criticised over the profits made by contractors – were essential for building infrastructure. They had been improved over time, he said. Murdo Fraser, the Scottish Tories’ finance spokesman, said PFI contracts – which were first introduced by the Tories and have been heavily criticised over the profits made by contractors – were essential for building infrastructure. The contracts had been improved over time, he said.
“The important thing now is to bring down our debt levels in a balanced fashion so we limit the impact on vital public services,” Fraser said. “We need to ensure that the public sector isn’t taken for a ride with current debt financing deals being implemented by the Scottish government, which despite its rhetoric is still an enthusiastic user of private finance.”“The important thing now is to bring down our debt levels in a balanced fashion so we limit the impact on vital public services,” Fraser said. “We need to ensure that the public sector isn’t taken for a ride with current debt financing deals being implemented by the Scottish government, which despite its rhetoric is still an enthusiastic user of private finance.”