Scottish budget takes an axe to public services

Philip Stott

The SNP – Scottish Green budget has delivered a devastating blow to public services in Scotland that were already locked into a spiralling crisis. 

An estimated £1.5 billion shortfall has been bridged by a combination of, overwhelmingly, cuts to spending and some tax increases. A new 45p tax band has been created for those earning over £75,000. But overall the modest tax hikes for the richest 5% will contribute a paltry £80 million a year. 

The SNP Finance secretary, Shona Robison, even before the budget was unveiled had declared war on the public sector. We must “reduce the size of the public sector “, she insisted. Speaking to the parliament, Robison stated: “Quite simply we cannot spend money that we do not have, and we cannot mitigate every cut made by the UK Government.” 

So, as always, the SNP with the support of the Scottish Greens have voted to pass on Tory austerity. Capital spending will be slashed. On paper, funding for the NHS and local government goes up but real inflation and with health, social care and council services stretched to breaking point, a tsunami of cuts in local government is certain in the new year. 

Even before the budget a quarter of councils feared they will not be able to balance their budgets next year. A Local Government Information Unit study found that it was “only a matter of time” before one effectively went bankrupt. All councils who responded said they were planning spending cuts and 97% said they would be hiking fees and charges. 

With £1 billion extra money needed for councils “just to stand still”, the underfunding of the so-called council tax freeze will add yet further cuts to local government budgets. 

Funds for housing are to be reduced by £200 million. Glasgow and Edinburgh councils having already declared housing emergencies amid rising waiting lists and homelessness levels at record numbers. The social impact of these cuts will be catastrophic. 

Parents with children who declare themselves homeless can now face a wait of more than a year before a permanent home is available. In Edinburgh, the average wait for families is 611 days while those in Glasgow wait 381 days.

The Scottish Federation of Housing Associations responded: “Today’s budget is an absolute hammer blow for tackling homelessness and poverty across Scotland and will have long-lasting consequences for the nearly 250,000 people throughout Scotland stuck on a waiting list for a social home, as well as for existing tenants and the housing associations which support them.” 

Rail (£120 million) and colleges and universities (£100 million) will also face cuts. Professor Richard Murphy, writing in the pro-Scottish government National newspaper, commented: “Let me be blunt. In this situation the SNP government in Holyrood is in much the same position as the very large numbers of English councils, who now seem to be queuing up to declare bankruptcy.”

Certainly the SNP and Scottish Greens are guilty of political bankruptcy in the face of a capitalist crisis that is deepening for the working-class majority. 

The Scottish Fiscal Commission who advise the government on the economy reported estimated growth rates for the Scottish economy of 0.2% this year and 0.8% next year. Capitalist economic stagnation and falling incomes are the reality for millions. 

The standard of living in Scotland fell by record levels between 2021/22 and 2023/24. They won’t return to 2021 levels until 2027 at least. And not at all if the Scottish government continue to offer below inflation pay deals to public sector workers. 

Robison warned trade unions recently that there was a “relationship between head count and pay”. A clear warning to local government workers that any future pay rises will be paid for by more job losses and service cuts at a time when many council services are already cut to the bone.

The 4.3% increase in the NHS budget for health boards will be a cut in reality with real inflation still at stubbornly high levels. The number of people in Scotland who waited 24 hours or more in A&E in the first half of 2023 was more than 250 times higher than in 2019. The number waiting more than eight hours rose from 11.9 to 15% of patients, while those waiting more than 12 hours rose from 5.3 to 6.7%. 

Robison insisted that the Scottish government had no choice but to accept cuts. But what could a left government standing on socialist policies at Holyrood do when faced with savage cuts from Westminster?

setting needs-based budgets

Socialists stand for budgets based on the actual needs of workers and communities. That means rejecting the lie that there is no money to adequately fund vital services and the jobs of workers who deliver those services. Just look at the profits being made by the corporate giants and the wealth accumulated by the super-rich over the past decade alone. In addition, billions have been found by the Tories and Labour to fund the wars in Ukraine, Iraq and Afghanistan. 

A socialist approach would involve setting a needs-based budget at Holyrood that fully funds local government, the NHS, housing, transport, social security benefits, wage rises that at least match inflation etc. It would also allow for a reversal of the more than decade of austerity inflicted on public services. The level of funding required for such a budget can be worked out through consultation with the trade unions in those services, local authorities, elected councillors, community organisations and so on. 

Inevitably there would be a sizeable gap between the funding available from Westminster and the needs-based approach of a socialist government, or indeed a council. But by setting out clearly and well in advance the amount required to deliver a needs budget, and the amount likely to come from Westminster alongside revenue from tax, a mass campaign to demand that Westminster fund the difference can then be built. 

Such a campaign would involve mass demonstrations and protests, the building of coordinated strike action – for example a one-day general strike by the trade unions to apply pressure on in this current case a weak, divided and terminal Tory government staggering towards defeat at the next general election. 

The response of the SNP, Labour, the Scottish Greens et al when this strategy is put forward – including for no cuts/needs budgets at council level – is to claim we do not have the powers. That is as big a lie as the idea that there is no money for public services or wage rises. 

The power to fight for increased funding by mobilising mass struggle by the working class is always there. Its the political will that is missing from the pro-capitalist parties who see themselves literally as a conveyer belt for cuts while patting themselves on the back for ‘balancing the books’.

As Socialist Party Scotland has explained many times, councils and the Scottish government have real powers. Powers over borrowing – particularly local government – reserves and the use of normal financial mechanisms like capitalisation which allows for funding of some day to day spending from capital budgets. 

Trade unions in many areas across Scotland, especially those influenced by a socialist approach, demand no cuts budgets every year from councillors. They explain how a one-year no cuts budget could be used to help build a mass movement for increased funding by mobilising the working class. 

This was exactly the approach taken by the socialist-led Labour council in Liverpool between 1983 and 1987. The council adopted a strategy proposed by Militant supporters – the forerunner of the Socialist Party – that refused to make the cuts demanded of it by the Thatcher government.

The councillors set a budget to expand council house building, invest in sport centres, schools, nurseries and job creation. This meant setting a deficit budget and demanding the Tories give Liverpool back some of the money stolen from it during the previous years. In the end, after a series of mass demonstrations and a city-wide general strike, Thatcher capitulated and Liverpool in 1984 won major increases in funding that helped transform the lives of working-class communities in the city.

Imagine if MSPs and councillors today were to adopt such a fighting approach to opposing cuts and demanding increased funding. Even if one council in Scotland were to take the ‘Liverpool Road’ it would electrify and transform a terrain which has seen every single council – of any and all political colour – capitulate to austerity. 

That’s why the building a of new political force in Scotland, and indeed throughout Britain, is an urgent task. Were the trade unions to help launch a new workers’ party that adopted a socialist approach on cuts – that stood in elections on a policy of making big business pay not the working class – imagine the impact that would have. 

The consequences of the SNP-Scottish Green budget axe will be devastating for workers, communities and the jobs and services we all rely on. The urgent necessity of building that working class and socialist alternative has never been more important.

As we go into the new year and new rounds of austerity budgets in local government and health and social care, we will step up the demand for an end to the cuts agenda, for fully-funded services and the building of a mass working-class political vehicle to fight for these policies.