The chancellor’s failure to allow the Scottish Government to bring forward more money from future budgets for capital projects could cost 5,000 jobs, it was claimed last night.
Finance Secretary John Swinney wanted to use £350million from the 2011-12 budget next year.
This would have been in line with action taken this year to inject money into the struggling housing market and to save construction jobs. Mr Swinney claimed the pre-Budget report threatened Scotland’s fragile economic recovery.
He said: “The chancellor has ignored the compelling case for the acceleration of further capital spending into 2010-11, a case which carried the support of a substantial majority in the Scottish Parliament as well as leading independent economists.
“Instead, the Treasury has pulled the plug on that vital cash flow at the very time the Scottish Government is doing everything we can to support recovery, a reckless decision that holds us back and places 5,000 jobs at risk.”
The Scotland Office accused Mr Swinney of trying to spend money before it had been allocated.
A spokesman said: “The Scottish Government's complaint about capital acceleration is unfounded.
“Scottish ministers are well aware the budgets for 2011-12 have not yet been set and that it is impossible to advance money from a budget which does not exist.”
The Scotland Office said the Scottish Government would benefit from £23.115million in “Barnett consequentials”.
The rejection of accelerated funding is an embarrassment for Scottish Labour leader Iain Gray, who backed the idea. Last night, he said the best way for the Scottish Government to make a case for accelerated funding would be to reinstate the Glasgow Airport Rail Link and make it clear that any additional resources would create jobs.
“I have written to the Treasury and I believe that provided these conditions are met there is a good case for accelerated spending,” he said.
“I hope the chancellor will consider it favourably as part of the next Comprehensive Spending Review, but the SNP must first demonstrate they can manage the budget they have.”
Mr Swinney said yesterday’s statement was the time to act as the next spending review will not be until the summer and by then jobs will have been lost.
He also claimed the chancellor is pocketing a £10billion North Sea windfall over the next five years resulting from higher-than expected fuel prices. Mr Swinney accused Mr Darling of planning to “squander" the money on Defence projects such as the Trident nuclear submarine missile system.