Hansard

We have been through such questions before with Mr Brown. He fails to take into account the fact that there is natural inflation in all the costs that we wrestle with as a Government. In terms of giving a like-for-like comparison of the resources under the control of the Scottish Government—the things that we can control and decide on to afford the priorities of the people of Scotland—the fiscal DEL budget has been cut, in real terms, by 11.1 per cent between 2010-11 and 2015-16. That is the reality of the financial situation that the Scottish Government faces.

We are seeing real-terms cuts of 2.3 per cent a year from March 2011 to March 2016 and we now know that the chancellor plans a further £25 billion of cuts to come from 2016 onwards. That assumption by the chancellor was greeted by the Deputy Prime Minister as a strategy founded on a “monumental mistake”. That is what the coalition partners think of Gavin Brown and his colleagues’ direction of travel. That approach compounds the macroeconomic failures of the coalition. United Kingdom Government borrowing between 2011-12 and 2015-16 is expected to be £197 billion more than originally forecast in June 2010.

As welcome as the £300 million of Barnett consequentials allocated in the chancellor’s autumn statement are, not all of them enhance the Scottish Government’s spending power and they account for a mere fraction of the amount that Scotland’s budget has been reduced by since 2010.

No one in the chamber should be in any doubt about two points: first, that significantly less money, in real terms, has been allocated to Scotland than at any point since devolution; and, secondly, that in those circumstances we are ensuring that the maximum impact is generated from the spending priorities that we settle on as a Government.

Since 2007, this Government and our public services have focused on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth. Our budget sets out our actions to deliver on that purpose through supporting economic recovery while creating jobs and new opportunities through the transition to a low-carbon economy; maintaining our commitment to a social wage for the people of Scotland; and protecting our public services by taking forward an ambitious programme of public service reform, driving a decisive shift in resources to preventative approaches and delivering improved outcomes for people and communities.

As the Government’s chief economist noted in his most recent “State of the Economy” report, economic recovery in Scotland has continued through 2013 and Scotland has now seen its sixth consecutive quarter of growth. The recent growth performance has moved Scotland’s economy closer to 2008 levels, so that Scotland is now only 0.9 per cent below our pre-recession peak in output, whereas the United Kingdom is 1.9 per cent below that level.

Statistics that came out this morning highlight that Scotland continues to be the best performing of the four nations in the UK on employment and unemployment. Consistent increases in employment levels show that the policies of the Scottish Government to create jobs and boost the economy are making progress, but we know that the recovery is fragile and needs continual support.

We have consistently recognised the importance of infrastructure investment by the public and private sectors in increasing the momentum of the recovery. The budget confirms that we will secure more than £8 billion of investment in Scotland’s infrastructure over the next two years, which will be used to build homes, schools, colleges, hospitals and transport links. As part of that, investment to support sustainable and active travel will be increased to around £60 million over the period of the spending announcements.

On Monday, I was privileged to see the construction that is under way of the new Inverness College, and yesterday I saw the progress that is being made on City of Glasgow College, where £228 million of investment will create 170 jobs over the life of the contract and will deliver a centre of excellence for skills development in the city for many years to come.

We will continue to fund a record number of modern apprenticeships, including 40 at City of Glasgow College, which I visited yesterday, and will maintain our commitment to opportunities for all, which guarantees that those who are aged between 16 and 19 and who are not in work can obtain the support that they need to progress their journey back into employment.

Although this morning’s statistics confirm that the youth labour market in Scotland is performing strongly—we have a higher youth employment rate, a lower unemployment rate and a lower economic inactivity rate than the UK does—we are considering closely the recommendations of the Wood review on developing Scotland’s young workforce to ensure that our education system continues to deliver the skills that employers need.

The draft budget delivered the most generous package of business rates relief in the UK, which was worth more than £570 million a year at the time and included support for more than 92,000 business properties through the small business bonus scheme. In December, I announced that we would allocate £38.5 million in both 2014-15 and 2015-16 to cap the business rate poundage at 2 per cent and to extend eligibility for the small business bonus scheme. That will extend the benefit of the scheme to 4,000 additional properties, leave an eligible Scottish business up to £3,080 better off than its competitors in England and ensure that Scotland continues to be the most competitive place in the UK to do business. That measure has been included in the Budget (Scotland) (No 3) Bill and the Parliament will vote on it today as part of the bill’s provisions.

In addition, we are acting to protect and reform our public services. We value a national health service that is publicly owned and a local government that is properly funded, which is why the budget again delivers on our commitment to pass on the full Barnett consequentials to the NHS in Scotland and continues to prioritise local government funding, in contrast to the approach that the UK Government has adopted.

We have also ensured, through our reform of the fire and police services, that we will maintain 1,000 additional police on the streets, and from 2015-16, the Public Bodies (Joint Working) (Scotland) Bill will drive the delivery of joined-up, high-quality and sustainable health and social care provision in Scotland.

With that in mind, the budget maintains our commitment to the three change funds in 2014-15 and will allocate funding of £120 million in 2015-16 to support national health service boards, local authorities, the third sector and other partners in delivering better integrated health and social care provision and to fund national initiatives into the bargain.

Investing in and improving crucial public services can bring significant benefits to our economy. The draft budget in September provided more than £190 million of investment over the next two years to increase early learning and childcare provision to 600 hours a year for three and four-year-olds and the most vulnerable two-year-olds, saving families around £700 a year. That investment will fund the commitment in the Children and Young People (Scotland) Bill and increase available childcare from the 412 hours a year that we inherited in 2007. High-quality childcare can make a huge difference to outcomes, both in the life of a young child and in their parents’ ability to participate fully in the economy through work or training. That is why when the financial opportunity to extend the provision became available the First Minister announced plans to extend the provision to two-year-olds in households where parents are looking for work.

To maintain the quality of childcare, we are also investing £3.5 million in supporting around 2,000 new jobs and enhancing the skills of our childcare workforce. The bill allocates the funding for that expansion.