A sticking plaster approach to the budget?

One of our policy officers mistakenly wrote down that the Finance Secretary had allocated £32.5m extra funds in his Budget announcement this week to the third sector. It was actually £2.5m, but it really got us all going for a while. What could the sector do with a cash injection of £32.5m? Tempting, isn’t it? Our sector will make £2.5m go far and it’s welcome, but it was never about the extra money. For many third sector organisations, our agenda is about supporting the most vulnerable people in our communities. Better to spend big budgets wisely, than to announce small budgets to patch over the shortcomings of big budgets spent badly. It’s clear that the budget announced for 2014/15 is largely a continuation of allocations made previously. Highlights for the third sector include a renewal of the ’change’ funds for reshaping care for older people, early years intervention and reducing re-offending. There’s a £20m response to Shelter Scotland’s call to backfill the bedroom tax for vulnerable householders, and a redirection of £68m per annum towards welfare advice and mitigation. However, the bigger agenda here is to begin tackling the root causes that the small budgets above are attempting to plaster over.

However, the bigger agenda here is to begin tackling the root causes that the small budgets above are attempting to plaster over.

Key here is the economy. Change funds, welfare funds, cash for bedroom tax, affordable housing – all can be reduced if we get this underlying basis of the economy right. Ministers will point to their lack of control over the levers of power over tax and the economy. They will point to a 11% cut in real terms over five years and capital spending by over 26%, but they have enough power and they can make a difference now. For political reasons they need to protect the NHS and local authority budgets. These both make up a third of the budget each, but even this leaves a third of the budget still to play for. We need a reformed approach to public services that values the role of frontline third sector activity to rebuild people and their communities. We also need a more socially responsible approach to Scotland’s £9bn public procurement budget to encourage third parties to enrich their local economies. Government needs to think carefully here about what it can do to rebuild the economy from bottom up. Think here about the role of co-operatives, credit unions and community-led projects that build on the existing social, human and physical assets of communities. The onset of the independence referendum which appears to stifle any genuinely radical reform of the budget is paradoxically the opportunity and the excuse to change the terms of the debate on the economy. This is our chance to think about Scotland’s future differently.