Spending review: Scotland, Wales and NI face 7% cuts
By Peter Wozniak
The government’s funding for Scotland, Wales and Northern Ireland is to be substantially cut, but not as greatly as first feared.
The cumulative figure of seven per cent real terms cuts by 2015 could have been far greater, but the government’s Whitehall departments for the areas will not be so fortunate.
The Scotland, Wales and Northern Ireland offices will all see a quarter shaved off their resource budgets – and a third off their administration funding.
Nevertheless, the chancellor appeared especially keen to emphasised continued areas of support from Westminster.
In particular, the Treasury will offer a £25 million contribution and a £175 million loan to the Northern Ireland executive to deal with the fallout of the collapse of the Presbyterian Mutual Society.
For Scotland, George Osborne promised a £250 million contribution from the new ‘green investment bank’ for renewable energy in the country, if Holyrood complies with a demand to scale back the fossil fuel levy surplus.
The CSR also promised further pursuit of devolution, with the implementation of the Calman Commission proposals in Scotland and dangling the possibility for increased powers for the Welsh Assembly.
These measures may be seen as a way to sweeten the pill of spending cuts for Peter Robinson, Carwyn Jones and Alex Salmond – all of whom have so far been implacably opposed to the deficit reduction programme.
Neither of the parties in government in Westminster is in control in the devolved administrations.
The three countries all have a huge reliance on the public sector, making them especially vulnerable to public sector job losses and cuts.
Even the seven per cent cuts announced today may have drastic impacts on employment and growth.
The coalition’s optimism that the private sector will fill the void left by the spending review is not widely shared amongst leaders in Edinburgh, Cardiff and Belfast.
