Last week we pointed out that the Chancellor is sitting on a cash pile. Gordon Brown's speech at the Perth conference of the Scottish Labour party maintained his stern fiscal front, and the assumption is that he wants to keep the unexpectedly high amounts of revenue to spend on health and education (and reduce tax levels?) ahead of the next election. But he may come under pressure from Scottish colleagues to offer some goodies before the first election to the Edinburgh parliament next May.
Far from killing off the SNP threat as Labour hoped in legislating for a far-less-than-independence parliament, the prospect of dealing with Scottish business in a Scottish setting is feeding Nationalist sentiment.
It takes little to put Labour in a tizzy over the Nationalists. The party remembers the real risk of being overwhelmed in the 1970s. The Education Minister in particular loses no opportunity to launch virulent assaults. The new threat may have been temporarily bolstered by the Sean Connery controversy but Labour fears that the elections next May will coincide with the "mid-term blues" which affect every Government.
In the past, the Tory bogy has been enough to deter SNP-inclined defections in Labour areas. The risk of handing power to the Tories will not exist next May.
If Labour looks like losing its dominant position, the misgivings about policy evident at Perth but kept under control will become open dissent. All opposition parties, including socialist groups active in the peripheral housing schemes, will point to public service cuts and blame the Government. The council budgets fixed last week did not provoke the anger of a year ago although cutbacks still predominate and their effect is cumulative.
Labour council leaders have not wanted to embarrass their colleagues in government. Such restraint will not last, especially if the aspirations of some councillors for a seat in the new parliament look like foundering because of the SNP.
As usual education has been protected from the severest cuts (pages 4-5). It enjoys the benefits, as well as suffering the constraints on local autonomy, of being a statutory service. No council could dismantle it in the way Aberdeen has been forced to remove support for the arts.
The Government will be keen to highlight investment by councils, some of which comes from "new deal" money that was not supposed to prop up threatened services, but who is going to look too closely when there are political points to be made? Ministers, having purposely kept local government on short commons, scratch around for examples of growth. They see a national cut of 1.6 per cent as evidence of commitment to education and make play with the problems of SNP councils.
Rather than be heard abusing the Government, the Labour controlled Convention of Scottish Local Authorities has concentrated on demands for an examination of local government finance. The budgets certainly produce puzzles. Why, for example, has prosperous Aberdeen suffered so badly, with a 5 per cent education cut, compared with Dundee, where the reduction is only 0.4 per cent? Transparency, a mark of good government, is absent.