My Orcadian Column 20/12/18


Orcadian 20/12/18

One consequence of Brexit clogging up every conceivable media outlet at present is that other news stories struggle to get any coverage or airtime at all. 

 

Take, for example, last week’s parliamentary statement on the Scottish Government’s draft budget.  In normal circumstances, this key moment in the Holyrood calendar sees schedules and front pages cleared to make way for forensic analysis of what the Finance Secretary, Derek Mackay has to say.

It is a measure, therefore, of how all-consuming the Brexit meltdown has become that this year’s budget found itself largely pushed to the sidelines.  I appreciate that when it comes to intrigue and scope for lurid headlines, Mr Mackay’s budget pales by comparison to what is happening at Westminster at present. Yet this budget has significant implications for public services, the voluntary sector as well as individuals, households and businesses across the country. It demands proper scrutiny. 

Grabbing the headlines is not made any easier by Mr Mackay’s mode of delivery that even his closest friends accept is ill-suited to setting pulses racing or getting people in the mood for Christmas.  If UK Chancellor, Phillip Hammond has earned his nickname “Spreadsheet Phil”, then Mr Mackay has surely done enough to be crowned “Powerpoint Deek”.

Yet the Finance Secretary is not to be underestimated.  He is meticulous on the detail of his brief and a shrewd political operator, dating back to his time in local government. Many, indeed, tip him as a potential successor to Nicola Sturgeon as SNP leader.

In terms of what he had to say last Thursday, his plans for internal ferry service funding held an obvious interest from a Northern Isles perspective.  Despite earlier threats that last year’s deal was a ‘one off’, Mr Mackay clearly concluded that it was simply untenable to accept the principle of fair funding one year only to abandon it the next.  This reflects the position he took in discussions with me and Tavish Scott last year and hopefully puts an end to island communities being held to ransom annually over the funding of these lifeline services.  Even so, a long term solution to delivering these services, including new vessels, is still urgently needed.

As with last year, however, most media attention focused on Mr Mackay’s proposals for taxation and, in particular, whether he would follow the UK Chancellor’s lead in granting a tax break to higher earners. His decision not to do so will inevitably widen the gap between tax rates north and south of the border, but the Finance Secretary argued that it was “not the time to offer tax breaks to the well-off”. 

This decision should increase by around £70m the amount Mr Mackay has to spend elsewhere, adding to the boost he had already received from better than expected economic growth forecasts and sizeable ‘Barnett consequentials’ flowing to Scotland from earlier UK spending commitments.

Much of this additional resource has been earmarked for health and care, though funding will also be ‘ring fenced’ to meet the cost of government commitments on early learning and childcare.

For local councils, however, the picture looks decidedly difficult. A pay settlement of 3% for many public sector workers presents challenges, even if it fails to head off strike action by Scotland’s teachers. Meantime, a combination of funding cuts and the loss of flexibility arising from ‘ring-fencing’ will heap more pressure on local services, particularly for smaller authorities like OIC.  As one Orkney councillor ruefully observed to me, “this is no longer UK but Scottish Government austerity”.

This will make securing parliamentary support for the budget tricky, although Green MSPs are still expected to fall into line.  Scottish Liberal Democrats have made the case once again for more investment in mental health services, as well as education and local government. We have also urged the First Minister to rule out pressing for a second independence referendum for the remainder of this parliament. Amidst the unfolding chaos of Brexit, compounding the uncertainty is in no-one’s interests.

Who knows what the next few months have in store.  For now, however, let me wish you a Merry Christmas and a happy, healthy and successful 2019.


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