So taking this step-by-step;
The Scottish Draft Budget 2017-18 has just been published. Chapter 1 (which sets the financial context) includes just two tables of figures:
- Why is 2010-11 there but not the other years prior to 2015-16?
- Why are there no year-on-year percentage changes shown, only cumulative?
- Why are 2010-11 and 2015-16 chosen as the base years for the cumulative percentages?
The accompanying text referring to "UK Austerity" states:
"The UK Government’s approach to public spending is having a significant detrimental effect in Scotland. Between 2010-11 and 2019-20, the Scottish Government’s Fiscal Departmental Expenditure Limit (DEL) from HM Treasury will fall by over nine per cent in real terms"We can see the -9.2% in the last column of Table 1.02 above. This is clearly the number they want us to focus on, because one of Nicola Sturgeon's special advisors took to Twitter last night (of which more later) to drive the point home
So let's unpack what's going on here.@kevverage @FraserWhyte81 For year-on-year DEL totals you only have to go as far as 2nd table. Notice the 9.2% RT cut from W'min by 2019/20? pic.twitter.com/m2v5Ws14ja— Colin McAllister (@McAllister1973) December 16, 2016
First of all we have to understand the various different DEL (Departmental Expenditure Limits) figures quoted. I created the table below by just taking the key figures in table 1.01 above and showing how the various totals and sub-totals relate
The "Total Discretionary Spending Limits" row is what is used in table 1.02, where these figures are simply adjusted to real 2016-17 cash terms (i,e. adjusted for inflation). So when the budget text states "the Scottish Government’s Fiscal Departmental Expenditure Limit (DEL) from HM Treasury will fall by over nine per cent in real terms" they are referring to Total Discretionary Spending Limits, where these are defined as:
- Total DEL
- Capital borrowing (i.e. devolved borrowing powers)
- Net DEL adjustments (i.e. impact of devolved fiscal powers)
- Financial transactions (i.e. effectively borrowing1)
- Non-cash DEL (i.e. depreciation charges2)
- Total Discretionary Spending Limits
When Sturgeon's SpAd referred to Discretionary Spending Limits as "DEL totals" in that tweet above, it was in direct response to this tweet highlighting the fact that "Total DEL" was not shown in real terms and there were no year-on-year percentages shown (both undeniably true).
It was late, maybe Colin was just tired - but you'd think if you're Sturgeon's SpAd you'd be careful not to wade in without understanding the figures or reading what was being said.good to see @FraserWhyte81 finding time to look at the figures - a valuable public service for which he'll likely get more abuse than thanks pic.twitter.com/L6baIVp3lA— Kevin Hague (@kevverage) December 16, 2016
So now we know what we're looking at, how do we understand and interpret the trends? As Fraser Whyte quite reasonably pointed out on Twitter, it's kind of weird that there are only cumulative percentages and no year-on-year figures. Surely the Scottish Government isn't trying to avoid showing something that doesn't fit their preferred narrative?
Well let's see.
I went back to the 2015-16 Budget to be able to fill in the intervening years and put all figures in the same real 2016-17 terms as used in table 1.02. In doing so I recreated the percentages used in table 1.02, highlighted below in yellow.
If you're struggling to read that, here it is again just from 2014-15 which is really all we need to see
So what did the Scottish Government achieve by not showing 2014-15 as a relevant comparison year? Well firstly they avoided showing that Total Discretionary Spending Limit increased in real terms by 0.4% in 2015-16.
The table above also shows us that the Total DEL Settlement from HMT actually went up 1.7% in real terms in 2015-16 and our Total DEL went up by 2.7%. I can't think why they would have chosen to present the data in such a way as to avoid this being clear.
Note also that in 2017-18 our total DEL will increase by 1.1% in real terms and cumulatively from 2014-15 to 2019-20 will increase by 1.4% in real terms.
Look at the figures in green showing the year-on-year and cumulative from 2014-15 trend in Total DEL - tells quite a different story from the "over 9% real terms reduction" doesn't it?
The yellow highlighted figures presented by the Scottish Government are true - but they offer at best a partial and at worst a cynically skewed picture of how the capacity for Scottish Departmental Spending is impacted by the HM Treasury settlement.
Is it too much to ask that our Government stops treating us as fools and just presents a fuller, clearer picture?
[I've dug a little deeper, it gets worse > Spinning the Scottish Budget: Part II]
1. Financial Transactions are allocated by HM Treasury to the Scottish Government and can only be used for the provision of loans or equity investment beyond the public sector. Financial Transactions facilities have to be repaid to HMT in future years.
2. depreciation or impairment costs associated with the ownership of assets. HM Treasury rules mean that this element of the overall DEL budget cannot be used to fund pay or procurement costs and as such this budget does not represent spending power for the Scottish Government.