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Spending Round 2013: Scotland to benefit from increased capital projects spending

Wednesday June 26th, 2013

Scotland will benefit from increased spending for capital projects as well as being protected from cuts in its resource budget relative to the rest of the UK in the Spending Round announced by the Chancellor. Government Opportunities

Despite the difficult economic times, this Spending Review will see the Scottish Government’s ability to spend public money on capital projects such as infrastructure and “shovel ready” projects will increase by over £400m – 12.9% in real terms – to £3.3bn for 2015/16.

This includes increased capital borrowing powers – set at £296m in 2015/16, up to an overall limit of £2.2bn – which are provided by the Scotland Act 2012.

The Scottish Government’s resource budget for 2015/16 (£25.7bn) will see a small decrease in cash terms of -0.1% from 2014/15 (-1.9% in real terms).

The decrease for the Scottish Government is significantly less than the overall resource reduction for the whole UK Government and the up to 10% cuts to non-protected UK departments.

The Secretary of State for Scotland Michael Moore said:

“We see the positive case for Scotland as part of the UK in pounds and pence which can be spent by the Scottish Government improving the lives of those in Scotland, boosting the economy and creating jobs.

“The Spending Round provides a huge spending boost for Scotland. It is £400m in additional spending power which the Scottish Government can spend as it sees fit, which is a good example of devolution working in practice.

“The Scottish Government has asked for additional capital resource and the UK Government has delivered it. They must now use it to invest in Scotland and help the economy grow.

“This good news is coupled with the fact the Scottish resource budget will be about flat cash in 2015/16, significantly better than the reductions across the rest of the UK.

“Being part of the larger UK economy and pooling resources from a wide UK tax base allows Scotland to have a stable budget that can be allocated from Edinburgh. Being part of the UK also protects Scotland from the volatility of resources such as oil and its potential impacts on annual budgets.

“The Scottish Government should welcome [the] news as a fair and positive result for Scotland.”

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