By Tom Peterkin
FREEZING council tax will cost Alex Salmond's government more than £3 billion, according to a new report that casts doubt over the funding of flagship infrastructure projects and warns of deep financial cuts to pay for pledges on free higher education, prescriptions and personal care.
As the 69 Nationalist MSPs elected last week prepared to take the oath in the Scottish Parliament today, SNP euphoria over its stunning election victory was given a sharp reality check when analysis prepared by Holyrood's research division showed the party's populist policies would have to be paid for out of swingeing cuts in a diminishing Scottish budget.
A detailed breakdown by the Scottish Parliament Information Centre (SPICe) revealed the total cost of freezing the council tax for the full parliamentary term - an election pledge that brought the SNP a huge amount of support - would be £3.15bn, prompting warnings from opposition parties of a "black hole" in the new government's plans.
The SNP insisted its manifesto pledges had been properly costed, but the briefing paper, available to all MSPs and titled Key Issues for the Parliament in Session 4, identified a host of other financial pitfalls facing the Scottish Government, including £2.2bn required to repair roads damaged by the winter freeze. On that issue, the SNP's manifesto merely pointed out its previous administration had provided an extra £19 million to deal with damaged roads - a figure that falls far short of the report's estimate.
Fears over the future of the SNP's big-ticket transport projects were also raised in the report.
Looking ahead to the new parliamentary term, it said there were "concerns" about the availability of capital finance for the £1.62bnForth crossing, the £295m Borders Railway and the electrification of the Edinburgh Glasgow
• David Cameron agrees to leave Nationalists to hold referendum in their own time
• Oath to be taken in six languages by MSPs
The difficulties faced by major construction projects were illustrated by the report's calculation that capital spending, now at £3.5bn, is set to fall to £2.4bn in 2014-15 and will not recover for another decade.
The report adds to the tide of opinion that the SNP has failed to accurately cost its expensive headline pledges, which proved so popular at the ballot box.
In addition to the £3bn council tax freeze, it has been estimated that free personal nursing care will cost at least £1bn over the coming years. Free bus passes for over-60s will cost £530m over the five-year parliament term.
The ambitious pledge to provide free university education is likely to cost at least £1bn over the same five years.
The SPICe report said: "The Scottish Parliament's fourth session promises to be by far the most challenging for public spending since devolution."
In a stark warning, it said some public services would suffer disproportionately as a result of the key SNP manifesto pledges. "If, for example, free further and higher education, the council tax freeze, bus passes for the over-60s, free care for the elderly and free prescriptions are to continue, then, in a more austere budgetary environment, other budget lines will face much deeper reductions than if reductions were spread more evenly across all areas of spend," it said
A detailed breakdown by the Scottish Parliament Information Centre (SPICe) revealed the total cost of freezing the council tax for the full parliamentary term - an election pledge that brought the SNP a huge amount of support - would be £3.15bn, prompting warnings from opposition parties of a "black hole" in the new government's plans.
The SNP insisted its manifesto pledges had been properly costed, but the briefing paper, available to all MSPs and titled Key Issues for the Parliament in Session 4, identified a host of other financial pitfalls facing the Scottish Government, including £2.2bn required to repair roads damaged by the winter freeze. On that issue, the SNP's manifesto merely pointed out its previous administration had provided an extra £19 million to deal with damaged roads - a figure that falls far short of the report's estimate.
Fears over the future of the SNP's big-ticket transport projects were also raised in the report.
Looking ahead to the new parliamentary term, it said there were "concerns" about the availability of capital finance for the £1.62bn
• David Cameron agrees to leave Nationalists to hold referendum in their own time
• Oath to be taken in six languages by MSPs
The difficulties faced by major construction projects were illustrated by the report's calculation that capital spending, now at £3.5bn, is set to fall to £2.4bn in 2014-15 and will not recover for another decade.
The report adds to the tide of opinion that the SNP has failed to accurately cost its expensive headline pledges, which proved so popular at the ballot box.
In addition to the £3bn council tax freeze, it has been estimated that free personal nursing care will cost at least £1bn over the coming years. Free bus passes for over-60s will cost £530m over the five-year parliament term.
The ambitious pledge to provide free university education is likely to cost at least £1bn over the same five years.
The SPICe report said: "The Scottish Parliament's fourth session promises to be by far the most challenging for public spending since devolution."
In a stark warning, it said some public services would suffer disproportionately as a result of the key SNP manifesto pledges. "If, for example, free further and higher education, the council tax freeze, bus passes for the over-60s, free care for the elderly and free prescriptions are to continue, then, in a more austere budgetary environment, other budget lines will face much deeper reductions than if reductions were spread more evenly across all areas of spend," it said
The SNP manifesto did not give a detailed breakdown of the cost of the council tax freeze. But when asked about the issue at the manifesto launch, First Minister Alex Salmond suggested the yearly cost would be £210m by 2014-15.
David Bell, Professor of Economics atStirling University
"Presumably, they might meet some of this through efficiencies, but by 2016 there probably won't be anywhere left where you can make efficiencies.
"We have yet to see the budgets for some of these years, so the question is where is the money going to come from."
A spokesman for the Convention of Scottish Local Authorities said: "What this report does clearly demonstrate is that all these policies do have a significant cost attached."
Scottish Labour's deputy leader Johann Lamont said: "Labour warned there was a massive black hole in the SNP's spending plans. The numbers in their manifesto just did not add up. We warned this could only mean more broken promises if they were re-elected."
The SPICe report said: "One prominent issue during the election campaign related to the affordability of some of the manifesto commitments made by the parties in the context of falling real-terms budgets and the fact that certain commitments, such as the council tax freeze, were not deliverable by central government alone. Others have been critical of a perceived tendency amongst politicians to 'wish away' budgetary difficulties."
The report warned the SNP's decision to protect the health budget against cuts would have ramifications elsewhere.
Even if the health budget was protected, as Mr Salmond has promised, the report predicted it would still see a real-terms decrease, from £10.772bn in 2011-12 to £10.728bn in 2014-15.
The briefing paper saidScotland
Over same period, the capital infrastructure budget would fall by 28 per cent in cash terms and 35 per cent in real terms.
Scottish growth was set to lag behind the rest of theUK UK
The paper repeated concerns about the SNP's insistence of providing free tuition for higher education students at taxpayers' expense. The Conservatives were the only main party to challenge that policy, which has been criticised by university principals, who fear that it could lead to Scottish institutions lagging behind those south of the Border SPICe pointed out the SNP's £93m estimate of the funding gap that had to be bridged between Scotland and England had been disputed by Universities' Scotland, which believed the real figure was at least £202m.
Yesterday, the umbrella body adopted a more conciliatory tone with the new Scottish Government. Alastair Sim, the director of Universities Scotland, said: "The government understands the urgency and the scale of the university funding challenge. The SNP has made firm and very welcome commitments to hold student numbers steady and to fill any funding gap and we look forward to working with the Cabinet secretary to deliver this."
A spokesman for finance secretary John Swinney said: "The SNP published a fully costed manifesto, taking into account all of the issues identified in this paper, which identifies a surplus of over £1bn by the end of this spending period - after new expenditure commitments are taken into account.
"The reality is that the annual cost of the council tax freeze builds up to £560m at the end of this parliament, or less than 2 per cent of the Scottish Government budget."
David Bell, Professor of Economics at
"Presumably, they might meet some of this through efficiencies, but by 2016 there probably won't be anywhere left where you can make efficiencies.
"We have yet to see the budgets for some of these years, so the question is where is the money going to come from."
A spokesman for the Convention of Scottish Local Authorities said: "What this report does clearly demonstrate is that all these policies do have a significant cost attached."
Scottish Labour's deputy leader Johann Lamont said: "Labour warned there was a massive black hole in the SNP's spending plans. The numbers in their manifesto just did not add up. We warned this could only mean more broken promises if they were re-elected."
The SPICe report said: "One prominent issue during the election campaign related to the affordability of some of the manifesto commitments made by the parties in the context of falling real-terms budgets and the fact that certain commitments, such as the council tax freeze, were not deliverable by central government alone. Others have been critical of a perceived tendency amongst politicians to 'wish away' budgetary difficulties."
The report warned the SNP's decision to protect the health budget against cuts would have ramifications elsewhere.
Even if the health budget was protected, as Mr Salmond has promised, the report predicted it would still see a real-terms decrease, from £10.772bn in 2011-12 to £10.728bn in 2014-15.
The briefing paper said
Over same period, the capital infrastructure budget would fall by 28 per cent in cash terms and 35 per cent in real terms.
Scottish growth was set to lag behind the rest of the
The paper repeated concerns about the SNP's insistence of providing free tuition for higher education students at taxpayers' expense. The Conservatives were the only main party to challenge that policy, which has been criticised by university principals, who fear that it could lead to Scottish institutions lagging behind those south of the Border SPICe pointed out the SNP's £93m estimate of the funding gap that had to be bridged between Scotland and England had been disputed by Universities' Scotland, which believed the real figure was at least £202m.
Yesterday, the umbrella body adopted a more conciliatory tone with the new Scottish Government. Alastair Sim, the director of Universities Scotland, said: "The government understands the urgency and the scale of the university funding challenge. The SNP has made firm and very welcome commitments to hold student numbers steady and to fill any funding gap and we look forward to working with the Cabinet secretary to deliver this."
A spokesman for finance secretary John Swinney said: "The SNP published a fully costed manifesto, taking into account all of the issues identified in this paper, which identifies a surplus of over £1bn by the end of this spending period - after new expenditure commitments are taken into account.
"The reality is that the annual cost of the council tax freeze builds up to £560m at the end of this parliament, or less than 2 per cent of the Scottish Government budget."
