Confusion over spending ‘cutbacks’

Disagreement over Salmond-Brown confrontation at Westminster on ‘efficiencies’

By David Perry

Published:

Confusion last night surrounded a confrontation between First Minister Alex Salmond and Prime Minister Gordon Brown over UK Government threats to slash £500million a year from spending in Scotland.

Mr Salmond said he repeatedly demanded, at a meeting between Scottish, Welsh, Northern Irish leaders and Mr Brown, for the cuts to be dropped because they will make the economic depression sweeping Scotland and the rest of the UK worse.

A statement from Scottish Secretary Jim Murphy claimed Mr Salmond “ultimately saw sense” during the meeting “and pledged to work on making efficiencies and sharing best practice across government”.

The disagreement on what happened at the hour-long meeting at Westminster came after two gloomy reports on the economy from the Fraser of Allander Institute and the Centre for Public Policy for Regions.

The institute warned the Scottish economy is in the grip of recession, with the next two years expected to be the most difficult since World War II, and jobless figures anticipated to soar at worst to 5.5% in 2011.

Figures from the centre predicted public spending in Scotland will be significantly reduced for a prolonged period.

Mr Salmond described the “economy summit” as “a good, businesslike meeting”, but revealed no agreement was reached with Mr Brown over the threatened cuts due in 2010-11 and 2011-12.

He said it was “entirely wrong” to put thousands of jobs at risk by cutting public expenditure in the teeth of a recession”, predicting 8,700 jobs would go if the cuts proceed. Later he admitted he was opposed to any cuts, even if delayed until after the start of an economic recovery.

Mr Murphy said he hoped what he claimed was an agreement on working on “efficiencies” signalled the start of “a new and more constructive approach from the Scottish Government”.

A spokesman for Mr Salmond said there was no such agreement, although the Scottish Government was already implementing a policy of efficiency savings of 2% a year, with the proceeds re-invested in improved services.

A Scottish Government spokesman said: “There can be little doubt about the scale of the economic challenges facing Scotland, which highlights the importance of maintaining public sector spending to support economic recovery in the face of the serious threat posed by a proposed £1bn cut in Scotland’s budget in the two years from 2010.

“Cutting spending at a time when our economy is likely to need it most is absolutely the wrong approach and we will continue to make that case to the UK government in the strongest possible terms.

“But it is absolutely clear that with more powers we could do much more.”