Nicola Sturgeon's £6 billion spending promise 'disconnected' from reality

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First Minister Nicola Sturgeon uses binoculars during a visit to the Scottish Seabird Centre, North Berwick, on the campaign trail for the Scottish Parliamentary election. Picture date: Monday April 26, 2021. PA Photo. See PA story SCOTLAND Election.  - Andrew Milligan/PA Wire
First Minister Nicola Sturgeon uses binoculars during a visit to the Scottish Seabird Centre, North Berwick, on the campaign trail for the Scottish Parliamentary election. Picture date: Monday April 26, 2021. PA Photo. See PA story SCOTLAND Election. - Andrew Milligan/PA Wire

Nicola Sturgeon's election pledge of a £6 billion spending splurge suffers from a "disconnect" from the financial reality her government will face as Scotland recovers from the pandemic, an impartial analysis has warned.

The Institute for Fiscal Studies (IFS) concluded the manifestos of all three of Scotland's main political parties in the Holyrood election – the SNP, Tories and Labour – lacked "credibility" by making expensive spending pledges "without any serious attempt to provide costings, or to say how they would be paid for".

The respected economic think tank said Scotland's politicians are failing to level with voters and paying for the billions of pounds of pledges would likely mean hiking taxes or cutting spending in other areas.

Surging costs for health and social care could easily absorb three-quarters of the projected cash increase in the Scottish Government’s budget over the next few years, it said, leaving little left over for the range of promises of extra spending that have been made.

Although the damning criticism was levelled at all three parties, Ms Sturgeon's SNP is on course for a landslide victory in next week's election, meaning her manifesto will be the one to be implemented.

David Phillips, associate director at the IFS, also warned that a separate Scotland would have to "make sure it cut its cloth to fit the size of its own purse, rather than having fiscal transfers from the rest of the UK".

The IFS has previously found that the Scottish Government's spending on services is 30 per cent higher than the equivalent funding in England, with the additional money almost entirely coming from the Barnett formula and the block grant from the UK Treasury.

Among the manifesto pledges Ms Sturgeon had made are to scrap NHS dental charges, expand free childcare to one and two-year-olds, free breakfasts and lunches for all primary pupils, abolishing charges for non-residential social care, free bikes for children in deprived families, and exempting 18-21-year-olds from council tax.

However, Ms Sturgeon has ruled out increasing income taxes, insisting the pledges can be funded by an estimated 14 per cent rise in the block grant from Westminster and a projected 20 per cent growth in tax revenues over the next five years.

Mr Phillips said the IFS "typically" concludes that manifestos include "hidden trade-offs" that parties have not been up-front about but the Holyrood documents had an even larger-than-usual number of big spending commitments.

He said: "The SNP and Scottish Labour envisage what they might think of as a Scandinavian-style future, with a smorgasbord of new entitlements for Scottish residents.

"In contrast, the Scottish Conservatives' public services and benefits offer, while an increase on what is there today, is less expansive with an aim instead of modestly reducing tax.

"Another thing these manifestos have in common is, unfortunately, a disconnect from the fiscal reality the next Scottish Government is likely to face."

He said delivering pledges outside the healthcare portfolios would likely mean tax rises or cuts elsewhere, before concluding: "Scotland's politicians have really failed to level with voters on the challenges that lie ahead."

Mr Phillips also warned an independent Scotland would start life with a large budget deficit "substantially higher than the rest of the UK" and face difficult choices to bring this down.

He said the coronavirus crisis has "blown a hole" in Scottish and UK finances, while a harder-than-expected Brexit has also raised tricky issues around the border with England.

Kate Forbes, the SNP Finance Secretary, said: "Only the SNP has a track record in office of using the Scottish Parliament's current financial powers, and only the SNP has the serious plans required to drive the post-pandemic recovery which is needed."