SNP denies 'nobbling' Fiscal Commission's oversight powers

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Scotland’s finance secretary has been accused of killing off proposals in Holyrood to give a financial watchdog far greater powers to scrutinise his spending and borrowing plans.

Labour and Conservative members of Holyrood’s finance committee said they were stunned after the Scottish National party’s MSPs on the committee suddenly rejected proposals they had helped draft to give the Scottish Fiscal Commission more independence and authority to review John Swinney’s budgets.

Jackie Baillie, a Labour MSP on the committee, said Swinney was trying to “strangle the Fiscal Commission at birth”, adding: “It’s a huge disappointment that a committee which has spent two years doing an incredibly detailed and valuable piece of work divides on party lines at the very last minute.”

The committee, chaired by SNP MSP Kenny Gibson, had late last year backed calls from some of Scotland’s most influential financial bodies for the Fiscal Commission to be able to investigate public spending as a whole, test affordability and the wider financial risks of greater borrowing.

With Scotland on the cusp of controlling £11bn in income tax and £2.2bn in extra government borrowing, bodies including the Chartered Institute for Public Finance and Accountability, and the auditor general for Scotland, Caroline Gardner, had urged Holyrood to increase the independent scrutiny of public spending.

The Guardian disclosed in December that Scottish public borrowing for privately financed projects such as schools, hospitals and roads; on upgrading the rail network; and on council capital spending, was set to hit roughly £50bn by the end of the decade.

In addition, Scottish households are forecast to owe £6bn for student loans by 2021, despite university tuition being free in Scotland. Public-sector charges to repay private finance borrowing and leasing costs are due to hit £1.3bn a year in 10 years, with hundreds of millions in extra annual charges likely to be added to that.

The Scottish government refused to comment on allegations about Swinney’s role in the committee’s final vote, but said it had increased transparency on the commission’s dealings with ministers.

Its approach with the Fiscal Commission was “consistent with international best practice, maximises transparency and delivers public value by offering the strongest safeguard over the robustness of the forecasts which underpin the Scottish budget,” a spokesman added.

Gibson defended his change of stance, insisting that Labour’s proposals would have damaged the Scottish government’s efforts to secure the right deal on future Treasury funding for Holyrood through the fiscal framework talks.

He said there were technical reasons why the Tory proposals would not work, but said Swinney had offered to discuss alternative options at a later stage in the process. Gibson added that Labour was in no position to attack the SNP after it had carried out U-turns on supporting the Scottish government on a Scottish rate of income tax and on the fiscal framework.

“SNP members – three out of seven committee members – were not ‘nobbled’ and we did not even have a pre-meeting to discuss how we would vote prior to committee,” he said.

Gavin Brown, the Scottish Conservative finance spokesman, said his measures to increase the commission’s transparency, making it far closer to the independent Office for Budget Responsibility, which advises the UK government, were blocked by SNP members.

Economists had recently questioned the accuracy of Scottish government forecasting, particularly on Scottish GDP and growth in the construction sector, he said.

The latest Scottish GDP quarterly figures, published on Wednesday, showed Scotland’s economy grew by just 0.1% in the third quarter of last year – well below the growth rate of the UK overall in this period, he added.

“Last month [SNP members] agreed that the Scottish OBR, known as the Scottish Fiscal Commission, should produce the official tax forecasts and report on the long term sustainability of the public finances,” Brown said.

“Today, they rejected amendments designed to achieve those ends. The stark contrast between what the finance committee agreed in its report and what certain members argued today is staggering.”

Powered by Guardian.co.ukThis article was written by Severin Carrell Scotland editor, for theguardian.com on Thursday 11th February 2016 07.00 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010