Next Scottish government faces ‘really difficult’ spending choices, economists say

The next Scottish government will need to make “really difficult” spending decisions soon after taking power, including tackling its large public sector pay bill, senior economists have said. Economists with the Fraser of Allander Institute, at the University of Strathclyde, believe the manifestos published by Scotland’s political parties during the campaign failed to tell voters about the true scale of the challenge. Prof Mairi Spowage, the institute’s director, said the next government would need to have a “reckoning” after the 7 May election because the last Scottish National party administration consistently spent more money than it received from its core sources of funding. She said it had been heavily reliant on non-recurring windfalls, such as fees from the ScotWind offshore wind licensing round or one-off payments from the Treasury, to fund its higher spending. The next government would therefore face the most challenging budget since the Scottish parliament was founded in 1999, she said, and may need to cut this year’s spending to cope with the shortfall. “The parties have engaged in a collective bout of fiscal denial with manifestos which have lots of commitments, yes, some ways to save money, but any money that is saved is then spent immediately,” she said at a recent briefing for economists. …