Editor's comment

22nd October 2010 at 01:00

The Chancellor has finally pronounced. However, as man proposes while God disposes, George Osborne has set out the grand plan while not speaking for Scotland. John Swinney, Holyrood's Finance Secretary, will now have to live with the consequences - or at least the Barnett "consequentials", the formula which dictates how spending in the three devolved administrations will be shaped by decisions affecting Whitehall departments. But any overall increases, such as in education and health, do not have to be allocated to these areas by Scottish ministers.

As things stood when we went to press, the clarity therefore had all the characteristics of mud. School spending in England is set to increase by pound;4 billion over the four years of the spending review to 2014-15. But schools are the preserve of local government in Scotland, so it is their decisions that matter. Before this week's announcement, they had been predicting a cumulative decrease in their funding from the Scottish Government of 20 per cent over the next six years. Now, Mr Swinney will have to decide how to deal the hand he has been given which, over the next four years, amounts to a 6.8 per cent fall in Scotland's block grant from the Chancellor and a grim 38 per cent reduction in capital spending on building projects.

The major risk in all of this is that decisions will be taken to cut what is easiest, not what is led by the evidence. Our survey this week on shared headships (p1) is a case in point: there may not be much to justify them on educational grounds, but the need to find savings, increase school managerial time and avoid the poisoned chalice of school closures will dictate the agenda. There will also be false dichotomies between "front- line services" and support staff, between public sector "bad" and private sector "good". We need to guard against geeks apparently bearing gifts.

Neil Munro editor of the year (business and professional magazine).

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