Start preparing to make cuts, Cameron urges Scottish government

David Cameron is urging the leaders of the devolved governments in Scotland, Wales and Northern Ireland to begin planning in detail now for major spending cuts in their budgets next year.

The Prime Minister’s message emerged after a meeting today in Downing Street of the Joint Ministerial Committee — the body set up to foster good relations between the UK Government and the devolved administrations.

Last month it was confirmed that the devolved administrations had the option of deferring until 2011-12 all or part of the budget cuts for this financial year set out in George Osborne’s UK-wide £6.2 billion package of savings.

Alex Salmond, the Scottish First Minister, who attended today’s meeting along with the First Ministers of Northern Ireland and Wales, has already taken up the option to postpone the £332 million of cuts.

They will, however, be in addition to a forecast further £1.3 billion of cuts due next year in the £30 billion Scottish budget.

However, a UK Government source said after the meeting that it was hoped that, despite the decision to defer this year’s savings, the Scottish government would now start the process of identifying the areas where the cuts would take place next year.

“You cannot put it off forever and we would hope the Scottish government is now drawing up its plans,” the source added.

Derek Brownlee, the Scottish Conservative finance spokesman at Holyrood, has accused the SNP government of playing politics by delaying the inevitable. He said last month: “The Scottish government seems hell-bent on not making any reductions this year, compounding problems next year.”

But a spokesman for the First Minister said that the Scottish government was already “well down the road” to delivering efficiency savings. “We are prioritising sustainable economic recovery and we will bring forward a budget for next year which is within the resources available to us.”

Michael Moore, the Scottish Secretary, described today’s meeting as “useful and constructive”, adding: “The reduction of the deficit is this Government’s priority and there was significant discussion around the way we collectively tackle a huge legacy of debt.

“It is a challenge which will affect every man, woman and child across the UK and it is essential Scotland’s two governments work together to address it.”

Mr Cameron is determined to foster better relations between the devolved administration and his coalition Government by encouraging what he has termed the “respect agenda”.

Within days of taking office last month, he fulfilled a manifesto commitment to meet Mr Salmond in Edinburgh and has already hinted that he may be prepared to release £185 million to Holyrood from the fossil fuel fund — money which comes from Scottish energy generation but can only be spent on renewable projects north of the Border.

In another sign of the coalition’s desire to encourage better relations, it was agreed that a row over public spending on the 2012 London Olympics will now go through a disputes resolution mechanism — one of the first times such a mechanism has been used.

Edinburgh, Belfast and Cardiff want a proportion of the Olympic spending to go to them, arguing that it should do so under the Barnett Formula but the previous Labour government resisted the demand.

It was also announced after today’s meeting that Mr Moore will address MSPs at Holyrood on Thursday of next week.

The Scotland Office said that Mr Moore would be the first Scottish Secretary to appear formally before MSPs in Edinburgh and that he would meet with Holyrood committee conveners.

Danny Alexander, the Chief Secretary to the Treasury, and Mr Cameron are also expected to visit the Scottish Parliament in the near future.

But one issue threatening to cause tension between Edinburgh and London is how far the coalition is prepared to go towards adding to Holyrood’s current powers.

Mr Moore has stressed that the coalition Government intends to concentrate on implementing the proposals of the Calman Commission which would give MSPs control over about half of the income tax raised in Scotland.

Mr Salmond wants to go much further and last week leading Scottish businessmen backed a campaign for fiscal responsibility aimed at growing the Scottish economy.

THE TIMES