Back the Budget

IT'S a huge amount of money: £33bn. Scotland's annual Budget pays for all devolved services north of the border – our schools, hospitals, most roads, the police who protect us, and much of the work done to boost the flagging Scottish economy. While that money is raised by the Treasury, quite rightly it is spent by Holyrood, with local knowledge to meet local needs.

Finance Secretary John Swinney has already outlined most of his plans for next year's Budget, which will receive its first vote in the Scottish Parliament on Wednesday. But in the next three days much horse trading will take place as the SNP's minority administration tries to secure a safe passage for the plan. This places a disproportionate amount of power in the hands of small parties and the sole independent MSP, who can put a high price – of cash for their pet projects – on their support for the Budget.

Last year's annual battle was particularly dramatic, with First Minister Alex Salmond threatening to resign if the Budget was not passed. Eventually it did, comfortably, with Tory support after concessions on police numbers and business taxes, and abstentions by the other parties – in farcical circumstances on Labour's part. In theory, this year's Budget should be even harder to get right, with Scotland's economy in a downturn which, Swinney admits today, will take longer to end than that south of the border.

And, to be fair, the Finance Secretary has a small toolbox to hand. Yes, £33bn is a lot of money, but most of it is committed to essential and core spending, the bulk of it immutably on health and education projects. Swinney has no big macro-economic weapons at his disposal to boost the flagging economy – no influence over the Bank of England and Monetary Policy Committee, no billions to prop up Edinburgh's financial institutions, no influence over the cost of exports. Besides, just weeks after the Treasury pumped £37bn into failing banks – and with another £100bn anticipated to guarantee lending securities – that £33bn suddenly doesn't seem quite so massive.

Given these restrictions, we are glad that Swinney is the minister in charge. He is a talented and hard-working politician who has immersed himself in the detail of the nation's finances. And what we have seen of the upcoming Budget looks like a decent effort in difficult circumstances, especially the pledge to safeguard nearly 5,000 jobs by bringing forward £230m worth of major spending projects.

Probably the biggest hole remains the deal with local authorities which was supposed to freeze council taxes. The SNP seems to be gambling that councils will not be prepared to risk a backlash from local voters if they do not stick to the deal, though the authorities themselves argue that the £70m additional pot available to hold taxes at their current level is not enough to make it worth their while.

This is one battle which will not be resolved by Wednesday. And this is not the time for any posturing in Holyrood, either. The Lib Dems have already failed this test, having walked out of negotiations when Swinney refused to use his power to cut income taxes, by 2p in the pound. The Finance Secretary could never have agreed to such a ridiculous demand, which would have robbed public services of £800m.

The Conservatives and Greens appear to have sought more sensible concessions, notably action against hospital infections and some new youth projects, plus investment in home insulation. The Greens seem certain to vote with the Government, though the Tories say their support is not yet certain.

Which leaves Labour. After last year's debacle, when the party's MSPs abstained on their own amendment, there seems to be a more sensible approach under Iain Gray. More action on skills is being sought, plus possibly the dumping of the SNP's local income tax plans, which this newspaper believes would be damaging.

But we also believe the last thing Scotland needs right now is another Holyrood election, so if this proves a sticking point we would be happy to see LIT remain in the Budget – and voted down at a later date. No grandstanding, please – including back-me-or-sack-me stances. This week all parties must seek common ground on a Budget that will ease the downturn and take us forward to a better future.