"Scottish ministers had been planning for two years to hold a spending review in late 2006. The chancellor was due to issue figures next June for the annual Scottish block grant up to 2010. But that plan was derailed on Tuesday, when Mr Brown postponed the Westminster spending review until mid-2007, leaving the Scottish Executive without any figures on which to set its long-term budgets next year.The executive confirmed last night that the chancellor's decision had been unexpected.Ministers are now expected to cancel their next spending review – to have been known as SR06 – as there would be no point proceeding without knowing the size of the Scottish block grant.The change means the next executive spending review is likely to be in late 2007. SR06 was intended to cover the financial years 2007-08, 2008-09 and 2009-10. "
This should make the 2007 elections to the Scottish Parliament rather interesting: they will need to be conducted in ignorance of the level of resources which will be available to the Executive from April 2008 onwards. This in turn will make it difficult for parties to make promises involving decisions on expenditure. For example, how can the Tories commit themselves to reductions in the tartan tax if they don't know what the future budget will be? But the problem is not exclusive to the Tories: all parties will have difficulties in compiling their manifestos. At the very least, promises to do anything will need to be contingent upon whether the resources will be available.
I appreciate that elections always involve an amount of uncertainty about the future availability of resources but most governments have some wiggle room to take corrective action eg by increasing taxes. The Scottish Executive, however, has little influence over future availability of resources, as this is a virtually automatic consequence of decisions made in 11 Downing Street.
Fun and games for the manifesto writers!
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