20/09/2011 Newsnight Scotland

to be applied from each party's rank and file for them to be moved

further apart. Tonight on Newsnight Scotland:

Roll-up, roll-up for Mr Swinney's conjuring act. With a shrinking

block grant and commitments already made on the NHS and capital

spending, John Swinney will need a bit of magic to make tomorrow's

Budget add up. Or, can he do what he's doing already and cut public

sector pay? And, in the latest in our series on

the cost of care, we look at the human price paid by carers.

One thing is almost certain, when John Swinney unveils his Budget

tomorrow, he will propose freezing public sector pay for at least

another year. But for how long can a Scottish government in effect cut

people's wages while blaming it all on London? And, if it can keep

freezing pay, is there any need for fundamental reforms the government

also talks about? He is Catriona Renton.

It's a magic show that no Finance Secretary would really want to put

on at the moment. How do you balance the books and keep the

public on side? Well, that is the trick John Swinney has to pull off

tomorrow while money is bashing from his budget. We are facing

spending cuts in Scotland, across the whole of the UK, and that is a

risk for all politicians. The challenge for John Swinney is to

try and deflect the political grief from those spending cuts back on to

the UK government. Therefore he will argue that the root of these

cuts lows -- lies in a UK government constraint and comes

upon spending, and the root of the economic problem. He has got this

fixed budget and he has to deliver on a very ambitious expectations.

The SNP got elected in May on the basis that they can protect public

services and you can get better public services out of the Budget

we are talking about. It is not just conjuring tricks that John

Swinney needs. The writing is already on the wall. The budget for

this financial year is �28 billion. By 2014 - 2015, it will have risen

to �28.6 billion, up in cash terms, but down in real terms, and that

means John Swinney faces an estimated 12% squeeze of savings of

around �3.3 billion over that time because of inflation. In January,

John Swinney already revealed much of his hand when he proposed all

the main portfolio's budgets apart from health will be fixed until

2015, a strategy like this is not without risk. Health is going to be

ring-fenced to some extent. The more that to protect the health

budget, that is one third of everything that is spent by

Holyrood, the more you have to cut from the other budgets really quite

painfully. And it is much more than an illusion of moving money around.

John Swinney's plans will be scrutinised from all sides.

Politicians are unlikely to be distracted. He will argue, I'm sure,

that any financial secretary in his position would face this challenge.

He will say that he is trying as far as possible to finesse these

changes to the benefit of the Scottish economy, to try to enhance

growth, rather than the necessary day-to-day spending. People turned

his back on his opponents and say, what would you be doing in my

position? And, of course he has to please the

crowd. Difficult when it is on the cards that he will announce a

continued freeze of public sector pay for those earning more than

�21,000 a year. The pay freeze, I feel, is something that has been

advocated by John Swinney, at least in the short to medium term, as a

way of constraining the costs that he faces in the public sector

because this pays such a large proportion of the public sector

spending bill and spending accounts more generally. But it is true that

you cannot sustain that for ever. People will not tolerate their

wages being frozen, which in effect means a reduction.

And, surely it will take more than clever tricks to deliver all those

capital projects on the SNP's manifesto. The capital budget is

being reduced very much faster than the revenue budgets - about 36%

down over this whole period. There is a very expensive shopping list,

starting with the new Forth Bridge. You have also got the Aberdeen

relief road. You have also got expectations of housing. And the

rail service between Edinburgh and Glasgow. People have expectations.

John Swinney probably won't be pulling many rabbits out of that

tomorrow, but keeping everyone happy will be a big enough feat in

itself. I'm joint now from Adam fur by

Professor Richard Kerley from Queen Margaret University, and Jo

Armstrong from the Centre for Public Policy for the regions at

University of Glasgow. Jo Armstrong, I am still slightly confused /

sceptical about all of this. If you can just cut people's pay, which is

in effect what they have been doing for the past year, and keep doing

it, isn't that enough? Well, we have seen a pay freeze this year

and that has certainly helped this year's cash cut, but for every...

The wage bill is about �15 billion. A 1% increase in that is one

Hutcheon �50 million. That is not going to cover the cut that we are

facing across the whole block. Cutting wages is one part of the

solution. It is pretty major. When I interviewed John Swinney a couple

of months ago about this, he said everyone says I am not making the

books add up and I have got to do something radical, and he said that

he laid out in January but he intended to do and he has done it.

And underpinning that is the pay freeze. Yes, and also significant

amounts of savings. Within that, was 83% efficiency saving. We have

seen efficiency programmes for the last three governments. To continue

to say that you can do efficiency savings were that radical reform

seems to me extremely difficult to justify and to guarantee. None of

the efficiency programmes that we have seen to date have been

independently audited. Even though there is an argument that says we

have delivered two or 3% efficiency savings, you cannot guarantee that

that is equivalent to cash cuts. It does look like if you are going to

continue with efficiency savings, and the SNP's manifesto had many

billions of a fish says savings, then we have to see radical changes

to public services to deliver them. This business of efficiency savings,

it is rather vexing. The Government today were claiming yet again they

have exceeded their target. How are we ordinary mortals supposed to

know whether they have really made efficiency savings in the sense

that cash has been saved by all the people in the public sector

becoming more productive, or whether they have just cut services

and the efficiency savings is a new word for cuts? It is not clear

whether ordinary mortals or even extraordinary mortals could verify

the figures. They arc as yet not audited. They are claimed every

year by government, and they vary in their form. They are sometimes

with Ford -- -- referred to as Kashif isn't see savings, and other

times time efficiency savings. Whether that is other people's time

or the less the time of a greater number of people is reducing the

expenditure on Pippa -- particular services. But this is not verify.

As has been suggested, some are genuine technological improvements.

Others are simply about stopping doing things or reducing the volume

of activity involved in public service, and they are all captured

under the umbrella of efficiency savings, which seems to me a bit of

a Miss labouring in effect. But it sounds like a good one, it looks

impressive. So in effect, the Government says it to a department,

we are assuming you can make 3% efficiency savings this year, so we

will cut your budget in cash terms by 3%. And they certainly have to

get by. How they get by is the bit that is not clear. Whether they

have stopped providing services. Indeed, and there is no monitoring

of whether they have delivered them or not. There is not even any kind

of sampling of the activities to see if they have delivered true

efficiencies. Richard Kerley, I am curious about your take on this,

whether you think that there is any need for the sort of fundamental

reforms that Professor Beveridge, for example, talked-about, when

John Swinney does seem to have balanced the books by a combination

of the rather ambiguous efficiency savings we have been talked about

and a public sector pay freeze. suggest that one of the things we

saw in earlier reports from both the Christie Commission, Beveridge

was outlining a range of options that the Government could choose to

follow if it wanted to remove or charge for certain activities that

it does not do at the moment. There was not a great deal of fine-

grained work in terms of how things are actually done differently. I

would be looking for a couple of things tomorrow. One of them is,

given the emphasis that the Finance Secretary has laid on capital

expenditure which, after all, is a means of using public service

spending to support private trading companies, particularly in

construction and procurement activities, I would be looking for

a neat trick as to how he increases levels of capital spending. I am

not sure how he will do it, but I suspect it will involve either

incentives or encouragement to local government. In terms of the

longer term, there are a lot of services that need to be changed in

different ways. Some of those are so radical that governments shy

away from them. He has already pretty much outlined the capital

spending. In the documents he produced in January, going forward

to 2015, he flatlined the cash spending. That released about �150

million between now and 2015. That is the way you do it, isn't it?

has certainly indicated that he is looking to use the non-profit

distributing model for financing projects, and he is ring-fencing a

proportion of the resource funding to effectively accelerate

additional capital spend. I suspect that the other tricks up his sleeve,

clearly today's report about selling off assets is one way of

releasing under-utilised funding, and potentially using local

government to increase debt to allow additional spending. Whether

this is sufficient time to make this work, I don't know.

problem, presumably, is that, take 1 �50 million until 2015, that

money may be spent on capital projects which are very worthy in

themselves. It is highly -- hardly a fiscal stimulus to the economy?

No, but it allows capital spending to continue. We saw a hiatus when

the were switching from the PFI it had arrangement to the non-profit

distributing models, so at least it helps keep that stimulus going. But

it is not a massive boost to the Budget. The budget at the end of

his �30 billion, so it is not a significant addition. But it would

help at the margin. Any evidence you look at coming out of

recessions is that those who fail - - favour capital Revenue do get

I suppose, intellectually, John Swinney would say we needed

boosting the economy, but he is that no control over this when all

of the figures around the world are going in the wrong direction.

are a very small fish in a very large pond, with governments

struggling everywhere with this. If you went to the limited powers that

the secretary has, I am optimistic that he will find ways of at least

pushing away at the capital expenditure, because that is the

kind of area that you can, at the same time, as improving the quality

of public services, because you have enhanced capital providing it

is spent properly, you can generate employment in areas outside the

public services. Briefly, you were sceptical about the claims the

Government makes about bringing forward capital expenditure with

dramatic effect in construction. Yes, I think the best information

we have on employment output is that at best it has increased

employment but has not increased output so there are additional jobs.

You're talking about construction. Yes, it is difficult to understand

the timing of the increase in employment and the acceleration of

the capital spend, so there is lack of clarity around some of the basic

information to understand if this stimulus has been real. We need to

leave it there. Thank you. Now, the penultimate

film in our series looking at the cost of care we have already looked

at the ethics of care and he deserves it and to does not, as

well as the burgeoning cost of all of these and the increasingly

elderly population. But who cares for the carers? The figures are

eye-opening, almost 650,000 people in Scotland look after people,

almost full time. It is estimated that over the �7 billion in

Scotland alone has spent on care. Claire and her partner have to care

for their four-year-old daughter 24 hours a day and seven days a week.

I am thick carer, the nurse, the doctor, the physiotherapist, and

everything else except Clare. Clare Do you have enough room? As soon as

the twins were born 12 weeks premature, Katie had a tough time

from the start. We would just get your pump now. Get your feet are

ready. There be Co, give you your milk. There is one of 700,000

unpaid carers in Scotland, and without her, the whole system would

collapse. But to cares for the carers? KT cannot walk or talk or

swallow, so she is fed through her tummy. She cannot sleep, she has

naps on and off. She is not a great sleeper. They have lost the little

bit of support the use to get from the local council. I am not sure

what is worse, the fact that I have had the time taken off me, or the

fact I spent so long worrying about when it would happen. I think

people would like a purple face. don't think they would! We want

them to put their money where their mouth is. For people living in

rural areas, it is not just about recognition. It is about getting

access to services and being able to afford to pay for them. Chris

had to suspend his career as a rural photographer to become his

mother's care when she became seriously ill. You don't get out,

you don't see people, you get as isolated as the people you care for.

You get days when you don't care and you want to walk away. As a

carer, who cares for the carers? truth, nobody, you're just a face

as commodity to be used up, instead of taking money from the public

purse to provide proper trained carers, I am looking for the next

problem, trained to deal with it. It is like being hypervigilant,

looking round corners, because you know that people are looking for

you to be there, but they are not. Rural poverty is a big issue,

people are asset rich but do not have a great deal of money,

particularly if you're on benefits. For a carer to have a break in this

situation, if you're isolated, this can be a problem. Dumfries is a

centre of a large area with a growing elderly population and this

can present a challenge as for carers. Bill is a forum in member

of this carer centre in Dumfries. He has been an main carer of his

wife for many years after she developed MS. Do people ask how

you're getting on as well as asking how your wife is getting on? It is

more how your wife is, very few people ask how you are? Does it

hurt? Sometimes it does. Do you feel invisible sometimes? Yes, yes,

yes. I put it face-up like a lot of carers do, they say everything is

OK. A lot of people do walk away. A lot of people find they cannot cope

and partnerships and marriages to break up and at the end of the day,

that cost a lot more to the system. There is an awareness by government

of the kind of care that Bill, Chris and care deliver. By this

December, the Scottish government would produce a charter for carers

in partnership with local authorities, of boards and the

voluntary sector. We need to get better at thinking of things for

the carers and the users has put back to have -- the user's

perspective. They save us at least �7.6 billion a year here in

Scotland. If we put to the individuals, that is the users of

services, and the carers, which is what we're talking about in the

middle, and think about what it is like for them, we belies they don't

care if we are a social worker or a nurse or a physiotherapist or an

occupational therapist. What they want to know is, can I get the

information and services that I need? Clear and Derek could have

many years of caring head of them. It is estimated by 2030 we could

require as many as 1 million unpaid carers in Scotland. The chances are,

most, if not all of us, we have a caring role at some stage in our

lives. A quick look at the papers,

starting with the Scotsman, they have taken what we were speaking

about, the council is furious with about, the council is furious with

the �220 million to man from John Swinney proposing that councils

should borrow money to cover some of the spending that would be taken