The Scottish Government wants to cut revenue to local authorities to support borrowing costs, in order to pay for the replacement £1.7bn-2.3bn Forth crossing.
The SNP Scottish finance secretary, John Swinney, has rejected a Treasury offer of new ‘flexibilities’ to take forward the replacement Forth Crossing project, planned because corrosion in the Forth Road Bridge’s cables may require weight restrictions from 2013.
Swinney said that Treasury chief secretary Yvette Cooper’s suggestions would ‘simply transfer pressure to other parts of the Scottish budget’. He dismissed Cooper’s promise of a one-off payment of around £500M for Scotland to match the extra money being spent on the London Crossrail project. Under the Barnett formula, increases in public spending in England lead to proportionate increases in grant to devolved areas.
Swinney claimed that, depending on when the Crossrail money was spent, and on the size of future Scottish budgets – which the SNP claims is facing significant reductions following the pre-Budget report – ‘the net effect may be small or non-existent’.
Similarly, he claimed Cooper’s offer to allow the Scottish Government to transfer unspent money from other years, from efficiency savings, or by transferring revenue to capital budgets, would mean ‘cutting funding to other programmes’.
The SNP, which has few other options after opposing private-finance initiative funding and bridges tolling, has now proposed reducing councils’ revenue support explicitly to meet borrowing costs. This could raise £300M annually, depending on ‘the amount by which it would be reasonable to reduce the level of supported borrowing’. Swinney also asked for VAT on the project to be recycled back into the Scottish Government’s budget.
A spokesman said the Scottish Government needed borrowing powers. ‘If we have responsibility for funding the biggest capital project in Scotland’s history, then it makes sense for us to have the financial responsibilities to match.’ But the Treasury said that its ‘constructive suggestion to fund the crossing remains on the table’.
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