“..further Covid-related allocations are designed to support the economy during ongoing restrictions – and these provide the Scottish Government with further resources during 2021/22. In years beyond that, this was a budget that aims to rebuild the economy by leveraging investment, whilst raising more from tax and tightening the screw on public services spending. But there is no role in the future economic vision for welfare policy or public services spending.”
‘The scheme will apparently operate ‘UK wide, using the new financial assistance powers in the UK Internal Market Bill’. Whilst the fine details are awaited, the lack of explicit reference to the devolved governments will antagonise intergovernmental relations in area where tensions are already running high.’
‘Both governments have a responsibility. Yes, the Scottish Government needs to be much more open about the financial scenarios it faces. But the UK Government needs to have a much greater appreciation of the knock-on impact of its decisions, such as the cancellation of the Autumn Budget, on devolved policymaking. Devolution shouldn’t be seen as an afterthought.’ (Graeme Roy)
The Scottish Government has yet another new group of economic advisers (on the recovery): it should think more about practical delivery of any new policy ideas, says FAI.
‘The scale of the shutdown in our economy is so large it will take months, if not years, to recover, Key now will be ensuring that long-term scarring effects of any recession can be mitigated as much as possible” An update…
The money could be better spent – in good sardonic style, Fraser of Allender lists the reasons for not wasting time on ‘a cracking idea’.
The resignation of finance secretary Derek Mackay overshadowed the fourth budget of this parliamentary term, which has led to a healthy increase in the resources available to the Scottish Government. How does it propose to spend this money?
Fraser of Allander identifies key points
‘It will simply not be sufficient for the UK Government to highlight risks with independence. The status quo itself has important policy challenges, whether that be the economic costs of leaving the EU Single Market or the economic effect of limits on immigration.’
‘Perhaps most of all, the importance of setting out a stable long-term environment for investment will be the most effective policy that anyone could set. It will also require international cooperation, both in terms of connectivity, R&D and investment.’
‘Unprotected areas of the Scottish budget should avoid real terms cuts in 2020/21, but they should not expect a spending bonanza.’ Latest FAI analysis…