THE Scottish Government will likely have to make cuts to public services under Labour’s fiscal plans, experts at a leading think tank have warned.
The Institute for Fiscal Studies (IFS) said in a report that a Tory victory in the General Election would also see spending on devolved public services slashed – while the SNP’s proposals “would probably be enough to avoid cuts”.
David Phillips, IFS associate director and head of devolved and local government finance, said: "Under both the Labour and Conservative parties' plans, the Scottish Government would see cuts in funding for investment and only modest increases in funding for day-to-day spending.
"It would be up to the Scottish Government how to allocate these budgets between services.
"With the same sorts of pressures on the NHS as in England, it would likely need to make cuts to at least some 'unprotected' services.
"These cuts would be somewhat bigger under the Conservatives' proposals than under Labour's."
Previously, the IFS estimated that unprotected departments – which oversee services like prisons, courts and councils – are facing cuts of about £20bn on top of an £18bn-a-year real-terms reduction in public investment.
The SNP have leapt on the warnings, with First Minister John Swinney saying: “The independent IFS have been warning about this for months, and they’ve now written it down in black and white – Sir Keir Starmer and his Labour government are planning massive cuts to the Scottish budget and Scotland’s public services.”
The SNP further pointed to analysis from the Nuffield Trust, which said Labour’s proposals for NHS funding would “represent a lower level of funding increase than the period of ‘austerity’ between 2010-11 and 2014-15”.
The Trust further warned earlier in June: “This would be an unprecedented slowdown in NHS finances ... it would make the next few years the tightest period of funding in NHS history.
“They will struggle to be able to pay the existing staff, let alone the additional staff set out in the workforce plan. It’s completely unrealistic.”
Swinney said: “We now have six days left in this election to stop those Westminster cuts from becoming a devastating reality.
“The SNP want to see investment in our NHS and public services. This latest warning is firm proof that if people in Scotland want an end to cuts, if they want to ensure that decisions about Scotland are made in Scotland, for Scotland, then they’ve got to vote SNP.”
He added: “The result of the election in England is a foregone conclusion – the Labour Party has a commanding lead and it is certain Sir Keir Starmer is going to be the next Prime Minister “The only story left in this election is Scotland – where it is hotly contested between the SNP and the Labour Party.”
The IFS report, which was published on Friday, said: “At a high level, while Labour propose slightly higher taxes and spending than the Conservatives, both parties’ manifesto proposals imply cuts to investment spending and modest increases in overall day-to-day spending on public services.
“It would be up to the devolved governments in Scotland and Wales to determine how to allocate their funding across services, but facing the same pressures on healthcare as England, the devolved governments would likely need to make cuts to at least some ‘unprotected’ services, unless they were to increase their own taxes.”
It further adds: “The SNP propose a substantial boost to both investment and day-to-day public service spending UK-wide, as well as increases to working-age benefits, funded by higher taxes and higher borrowing.
“In England, Wales and Northern Ireland, the boost to day-to-day spending would probably be enough to avoid cuts to ‘unprotected’ services. The way the SNP propose to part-fund these increases (via income tax increases largely only applying outside of Scotland) means that the boost to spending in Scotland would be smaller.”
