A budget to create jobs and kickstart the economy or a timid budget that slavishly follows George Osborne’s spending cuts agenda? There were mixed reactions to John Swinney’s budget statement yesterday …

The Draft Budget for 2013-14 and the actions the Scottish Government will take this Autumn will provide further investment in construction, skills and the green economy, John Swinney told Holyrood yesterday. Setting out the budget to Parliament, Finance Secretary John Swinney pledged £180 million over two years for construction, skills and employment and a green economic stimulus.  He also confirmed more rapid delivery of the Schools for the Future programme worth £80 million. Reinforcing the Government’s commitment to young people Mr Swinney announced an initiative to create up to 10,000 job opportunities for young Scots.

The Budget maintains the Government’s commitments to a council tax freeze, police numbers, no tuition fees, free prescriptions and concessionary travel, with protection for the NHS budget.

Announcements include:

• £40 million for affordable housing, starting this year
• £80 million Schools for the Future programme through NPD
• Creation of an Energy Skills Academy
• Employer recruitment initiative for young people
• £17 million for college education and student support
• Commitment to the Living Wage
• £6 million for cycling
• £1 million for Elite athletes
• £2.5 million for hybrid buses
• £1.5 million for VisitScotland
• £1 million for historic buildings

The Finance Secretary also confirmed a modest 1% increase for most Government and NHS employees, with additional support for the low paid, continued implementation of the Scottish Living Wage and no compulsory redundancies.

Addressing the Parliament Finance Secretary John Swinney said:

“Today I am announcing a Scottish budget for jobs and growth.  In difficult economic times this Government is doing everything within its limited power to stimulate Scotland’s economy, to invest in our young people,  protect households, and support front line services.

“To support the construction industry and inject growth into the economy we will provide an immediate stimulus to the construction industry of £40 million through investment in affordable housing.

“I am also determined to ensure our young people get the best education in the best possible schools.  So to further assist the construction sector we will increase the number of schools being built from 55 to 67 bringing forward £80 million investment through NPD.

“A Green Investment Package of £30m over the next three years will help home owners improve energy efficiency, cutting bills and tackling fuel poverty  whilst along with investment in low-carbon transport supporting our growth industries and helping to meet our climate change targets.  We will also establish the Renewable Energy Investment Fund continuing our support for Scotland’s growing energy sector.

“I am also investing in the future of our young people with support for a national employer recruitment initiative that will create up to 10,000 opportunities for small and medium-sized enterprises to recruit young people, the establishment of an Energy Skills Academy to support the creation of skills in oil and gas, renewables, thermal generation and carbon capture and storage industries and additional funding for colleges to maintain student numbers and support.

“I have used every option available to draw down resources to fund a further economic stimulus to the Scottish economy of over £180 million. Through use of budget exchange mechanisms, early repayment of loans and careful managing of the capital budget I have drawn down funds to invest in Scotland’s economy. We are also reaping the benefits of the public ownership of Scottish Water which, as well as allowing Scottish customers enjoy the benefit of water bills on average £52 lower than in England also enabled us to reduce our lending to the company by £45 million allowing that money to be invested in the economy.

“We are doing everything we can to support growth, public services and opportunities for the future but the UK Government needs to realise that more needs to be done. Only with the full levers of independence can Scotland properly capture economic opportunity and tackle inequality and poverty and we can do so more efficiently and effectively than currently happens in the UK.”

Predictably, the reaction of opposition parties, local authorities and the trades unions to the budget statement was less than enthusiastic. The STUC said a one per cent pay increase for government staff was, in reality, a pay cut and councils are concerned about implementing another tax freeze while having much less cash to provide services.

Labour’s finance spokesman, Ken Macintosh, said: “This is yet again another pass-the-buck budget from John Swinney. According to him, it is all either Westminster’s fault or the responsibility of councils. The unfortunate result of this Budget is likely to be the loss of more public sector jobs, but with  little to kick-start the economy.”

Conservative finance spokesman Gavin Brown agreed, saying: “The Scottish Government promised much, but delivered precious little. It has failed miserably to kick-start the economy.”

And Willie Rennie, leader of the Scottish Liberal Democrats, added: “Mr Swinney said he wanted a ‘relentless pursuit of economic growth’ but this is a timid budget proposed by a government more focused on independence than economic
growth.”

The Scottish Trades Union Congress claim that Mr Swinney has ‘followed George Osborne’s public sector pay policy almost to the letter’. STUC General secretary Grahame Smith said: “A third year of significant real terms wage cuts for hundreds of thousands of workers puts Mr Swinney’s attempts at stimulus into perspective.”

Kevin Keenan, finance spokesman for council umbrella group Cosla, said: “There are no surprises in what the Cabinet secretary presented to parliament, but it has to be accepted that there are challenges in there, challenges that will need to be faced by all 32 councils in Scotland.”

Not all sectors of society have condemned the budget, however, and Scotland’s business leaders have given Swinney’s budget a cautious welcome. David Watt, of the Institute of Directors Scotland (IoD), said: “Scotland needs a budget that supports growth. The Finance Secretary has announced a number of commendable initiatives, but we need to see more of the detail of the Budget to understand where the cuts have been made in order to fund these.”

The Scottish Federation of Housing Associations (SFHA) welcomed the announcement of an additional £40m investment in affordable housing. Chief executive Mary Taylor said: “We are extremely pleased that it recognises the immediate economic and social benefits for Scotland in building more affordable homes and we also welcome the government’s recognition of the benefits of focusing on construction investment.”

The Scottish Building Federation  also backed the budget.

How will the budget affect you? Let us know!