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Scottish parties talk money

Scotland's finances may make it hard for politicians to deliver on their promises to schools, reports David Walker

A proud Scottish educational tradition was cited by all parties, as the campaign for the elections to Scotland's parliament on May 6 kicked off.

Schools were in the thick of a war of promises, with all sides keen to show their largesse. Extra books, four computers per class and a pound;14 million fund for the poorest students have all been pledged.

Yet, Scotland's future finances are a tricky area. Despite the fluttering of cheque books, the real story is that tax rises or spending cuts are likely in the next few years. Voters in Scotland seem to have a choice of backing their strong belief in education with cash - or minding their wallets.

On their visits to Scotland during the past few days both the Prime Minister and the Chancellor committed the Government to maintaining something called the Barnett formula - a Seventies' device for allocating Scotland a set percentage of any increase in public spending year on year.

Its operation has till now ensured that Scottish per capita spending levels are well in excess of those in England and, some argue, well in excess of what an objective study of Scottish needs would justify. The formula has produced public spending per head in Scotland of pound;4,722 - 22 per cent higher than the English figure of pound;3,897.

Labour insists that Scotland's pound;15 billion budget is "fair and seen to be fair", maintaining an implacable opposition to tax rises. The new parliament, whatever its composition, must not breach the Government's spending limits.

The SNP takes a different view. It calculates it would have pound;690m to add to public spending if the planned cuts in basic rates of income tax were not implemented.

This would allow more teachers and doctors to be recruited and pay for a string of projects including the abolition of the Private Finance Initiative, the Conservative scheme to involve the private sector in funding public projects.

The PFI would be replaced by Scottish public-service trusts - a kind of bond to pay for new capital spending. Both the Government and the banks say this is a way of increasing public borrowing.

The most dispassionate recent calculations - from Professor Gavin McCrone of the University of Edinburgh, a former Scottish Office official - suggest there are problems ahead whoever wins power.

He believes the Barnett formula will not be able to deal with existing spending plans, let alone all the promises emerging in the current campaign.

Even if Scotland were allocated a generous share of North Sea oil spending from its own tax revenues, it would be well short of what is needed to maintain services at their current level: that means higher borrowing (which would upset all Gordon Brown's calculations) or extra grants from England.

The scene is set for some heavy battling over finances. The Treasury had been planning to cut the number of officials it has been dealing with in Wales and Scotland. That decision has now been shelved.


Scottish Nationalists

The Scottish Nationalists perhaps have tried hardest to wrap their campaign in the clothes of the "lad o' pairts" - the traditional Scottish symbol of the young person who makes it in the world thanks to a solid schooling.

They offer pound;30 per pupil for extra books plus an (unspecified) share of the pound;230m per year that would be available if an SNP administration refused to go along with Chancellor Gordon Brown's 1999 Budget and reduce income tax by one penny.

The party has also promised to "create the most extensive Scottish educational resource ever" by supplying e-mail addresses and computer access to all schoolchildren.

It's not clear whether a future SNP government would tolerate local authorities since its manifesto promises to "stop the endless political meddling in education and the curriculum".

Scottish Lib Dems

The Scottish Liberal Democrats are proposing to be generous, too. Even if they have no chance of becoming the majority party in the new parliament (Labour are well ahead in the polls, followed by the SNP) the Lib Dems could be Labour's coalition partner. So their priorities are significant. They want more teachers, more books and an end to tuition fees in higher education.

In addition they would establish a pound;14m fund to help "the poorest students" get into university and "provide high-quality early-years" education for all three- and four-year-olds whose parents want it.

Scottish Tories

Scottish Tories say they are going to be radical, revisiting the past to propose vouchers for nursery pupils and higher education students. They would abolish the local authority role in education, transferring it to appointed boards funded directly by the Parliament. There would be bonus payments for teachers and the re-introduction of selection by academic ability.


Labour too has made much of Scottish education and says there will be an "education for the nation" Act - if it wins.

Donald Dewar, Scottish Secretary and front-runner to be First Minister, said the Act would have five strands: new community schools to tackle poverty and social exclusion; investment in technology for schools; a guaranteed nursery place for all three and four-year-olds; a system of "rewards" for top-performing teachers; and a plan to raise educational standards.

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