'Difficult' Budget passes first hurdle

STV

The Scottish Government`s £35billion Budget was passed at Parliament with a warning that "difficult choices" lie ahead for public finances.

High earning public sector employees also came under the spotlight with the Government pledging to support Liberal Democrat calls to slash salaries. Top civil servants and all ministers will also have their pay frozen this year.

The SNP`s spending plans for next year secured the support of the Tories to clear their first Parliamentary hurdle.

Labour voted against the Budget and a Government concession on high earners in the public sector was not enough to secure the backing of the Liberal Democrats, who abstained.

Finance Secretary John Swinney said that the "outlook for public finances appears bleak in the coming years".

He added: "The budget reductions we face mean we must also make some difficult choices about where to reduce planned spending."

Mr Swinney pledged to consider Lib Dem proposals to cut the pay bill for high earners in the public sector.

But party finance spokesman Jeremy Purvis said this did not "go far enough" because of the absence of support measures for young people and manufacturing.

"We will continue discussions with the Government," he added.

Mr Swinney also agreed to look into Tory calls for "independent external analysis" of public spending to deal with the looming financial constraints.

He added: "I will give consideration to those points which have been articulated in this debate to determine if they will contribute to forward planning in public spending in Scotland."

Tory finance spokesman Derek Brownlee had earlier said that "greater transparency" was needed over how public money is spent.

"Publishing online details of government spending would be a powerful force for spending restraint," he added.

The Budget was passed at its first Parliamentary stage by 64-46, with the Lib Dems and Greens abstaining. The final Budget will be voted on at stage 3 on February 3.

Mr Swinney pledged to work with MSPs to secure agreement after last year`s Budget was initially voted down at stage 3 last year, before later being passed.

The Government will have £29.3billion at its disposal in 2010/11, with a further £5.4billion for areas of fixed costs such as public pensions.

Ministers have cut £14million - more than 5% - from its administration budget, Mr Swinney said, and reduced the amount it spends on communications and marketing by 50%. Top civil servants and ministers will have their pay frozen this year.

Frontline services will be protected under next year`s spending plans. Health will see an average 2.7% rise for NHS boards compared to 2009-10. The freeze in the "unfair" Council Tax will also be maintained, Mr Swinney said.

The bulk of the Government's £35billion Budget goes to health, which gets £12billion, and local councils, which receive £10billion.

Labour`s former finance minister Andy Kerr said the Budget for 2010/11 was going up £943million from this year but claimed it was delivering SNP "vanity projects" like the independence referendum.

He said: "In this time of economic crisis, it cuts spending on enterprise, tourism, building homes and regeneration."

Labour's call for the Glasgow Airport Rail Link (GARL) to be restored in the Government`s spending plans was again renewed by Mr Kerr. It was the biggest victim of the Budget when it was first announced last year, with Mr Swinney claiming it will save £170million over three years.

Mr Kerr said: "The Glasgow Airport Rail Link is not a project for Labour, it`s not a project for Glasgow, it`s a project for the whole of Scotland."

The pledge of £10million towards marine renewables was branded a "step in the right direction" by Green co-leader Patrick Harvie. He said further discussions will take place with the Government on the issue and Green calls for more home insulation measures.