Over £half a billion Swinney cash underspend in three years

[Updated 24 June on budget exchange mechanism] In 2012-13, Scotland’s Finance Secretary and Deputy First Minister, John Swinney, underspent – in cash – by £179 Million.

In 2013-14 Mr Swinney underspent – in cash [amount below DEL – departmental expenditure limit] – by £145 Million.

In 2014 – 15, despite two successive years of starving Scotland;s key and failing public services, Mr Swinney underspent again and by the greatest amount yet – £192 Million.

That amounts to a half a billion pounds [£516Million] cut from Scotland’s spending over three years.

In the past year where the underspend has been the greatest, the near-crisis education system lost £84 Million; and Health £12 Million. The party that really cares is also reported to have underspent by £41 Million on Social Justice.

The recurring excuse has been that it’s prudent to keep funds back to buffer against the cuts that the nasty Westminster is bound to inflict on poor Scotland – so poor in fact, that we can afford to do without half a billion pounds?

There is a cut from Westminster this year – £107 Million – which will hardly be noticed against the flush reserves Mr Swinney has built up- but the cries of ‘unfair’ still come.

The reality is that either Scotland does not need the money the Finance Secretary has underspent in each of the past three years; or it does need that money  – which was there to be spent – and has not had it.

Either way, this is not effective financial management.

It is curious to note that Mr Swinney was not always so stingy.

In 2008-09 he underspent by £42 Million.

We have been unable to locate the Financial Outtturn figures for 2009-10 but from an Audit of budgetary performance in that year, there appears to have been a cash underspened of £136 Million..

In 2010-11 the Finance Secretary returned to a better deployment of cash resources, underspending by only £12 Million.

In 2011-12 he underspent by £179 Million – which included a planned £100 Million underspend to be carried over [for what?]; and an additional £79 Million underspend.

Is it cynical to note that the heavier underspends, which have continued steadily since,  began to occur in 2o11-12, in the period of the run up to indyref 1? Following the SNP’s achievement of an unprecedented overall majority in the 2011 Scottish Elections, former First Minister, Alex Salmond, immediately announced that an independence referendum would take place within that term of office.

Mr Swinney underspent by £42 Million in his first year as Finance Secretary, 2007-08. If he was at once capable of financial management to underspend as relatively modestly as £42 Million [and throughout his first term his annual underspends were tight], it is curious that in the years from 2011-12 onwards, his second and more experienced term of office, he has been heavily underspending year on year – a total of £695 Million in this term of office to date.

His entire first term  – of four years, which allows a direct comparison with his second term performance to date –  had a total underspend of £232 Million. This shows that the first four years of this five year term have together seen a three times greater underspend.

In his budget for 2011-12 Mr Swinney announced a three year plan of carryover underspends – which would coincidentally have taken us to 2013-14.

Do we know what happened to each of the underspends?

The Scottish Government initially had the facility to carry forward any unspent budget to future years – through a process known as ‘end-year flexibility’. This facility was abolished as part of the 2010 United Kingdom spending review. However what is knows as the ‘budget exchange mechanism’ for the devolved administrations allows the Scottish Government limited flexibility to carry forward, from one financial year to the next, a cash underspend of up to 0.6 per cent of its resource DEL budget and 1.5 per cent of its capital DEL budget.

From our calculations, Mr Swinney’s annual second term underspends have stayed below that level in each instance, meaning that he has effectively been able to engage in strategic measured stockpiling for political advantage.

In his budget address to the Scottish Parliament on 19th June 2013, Mr Swinney said: ‘In 2011-12, we carried forward £179 million fiscal DEL in the budget exchange mechanism for use in 2012-13. This year, we will carry forward the same amount—£179 million—to be utilised in 2013-14. In our budget for 2013-14, we had factored into our plans a carry-forward from 2012-13 of £158 million, which was made up of £150 million resource DEL and £8 million capital DEL. We have delivered that plan. Accordingly, I am pleased to inform Parliament that the balance of the fiscal DEL underspend—£21 million in capital DEL—will be carried forward in full to augment existing spending plans in 2013-14.’

He has also announced that his recent hefty underspend has been carried over and will  be spent in this financial year – which coincidentally takes us up to the Scottish Election in 2016.

Local Labour MSP and Shadow Finance Secretary, Jackie Baillie, points out that, in 2008, Mr Swinney boasted that the days of hundreds of millions in underspends were over. His performance in the past four years gives the lie to that boast. In fact, at that time, Mr Swinney castigated previous adminstrations for underspends of £135 and £139 – each of which he has exceeded in each of the past four years; and exceeded too in 2009-10.

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Related Articles & Comments

  • And it appears that a child has died because her mother was denied access to health services. Something is terribly wrong.

    Hot debate. What do you think? Thumb up 31 Thumb down 3

    Lowry June 23, 2015 11:25 pm Reply
    • You don’t understand much about how budgets work, do you Lowry.

      In fact, you don’t seem to understand much at all. Children die in shocking circumstances every day, and guess what – it isn’t all the SNP’s fault. In the case of Erin Sutherland and her daughter Chloe it was nothing to do with money.

      You really need to grow up a bit.

      Hot debate. What do you think? Thumb up 2 Thumb down 40

      Longshanks June 23, 2015 11:59 pm Reply
  • Newsroom, according to you in previous witterings there was an underspend of £444 million in 2014 alone.

    With an whopping £444 million underspend to use up

    You seem to have changed your tune.

    Hot debate. What do you think? Thumb up 2 Thumb down 35

    Longshanks June 23, 2015 11:51 pm Reply
    • Not at all – we are standardising these figures on the actual hard cash underspends across the years.
      The actual underspend in 2014-15 was £376 Million, as it was £444 Million in 2013-14 – but, as Mr Swinney pointed out, some of this is technical.
      The figiures given above are John Swinney’s own figures for the hard cash underspends in each of the years quoted.

      Hot debate. What do you think? Thumb up 31 Thumb down 4

      newsroom June 24, 2015 1:30 am Reply
      • Glad to see you acept Swinney’s explanation now, but you were frothing righteously about the sum of £444 million just a month ago and refused to reply to those who pointed out that the real figure was much less.

        Hot debate. What do you think? Thumb up 2 Thumb down 32

        Longshanks June 24, 2015 8:30 am Reply
  • Scandalous. The SNP and Swinney should be ashamed of themselves. Total mismanagement.

    Hot debate. What do you think? Thumb up 33 Thumb down 4

    Sceptic1 June 24, 2015 12:20 am Reply
    • What pompous drivel, what faux-outrage, what shocking hypocrisy ‘Sceptic1’.

      The underspends under the Labour and Lab/Lib administrations were far larger.

      Hot debate. What do you think? Thumb up 3 Thumb down 31

      Longshanks June 24, 2015 8:29 am Reply
      • Well that’s alright then Longshanks! As long as Labour did it too, that justifies it entirely! Glad you cleared that one up so easily.

        Hot debate. What do you think? Thumb up 31 Thumb down 3

        JB June 24, 2015 8:32 am Reply
        • I think it probably shows that a certain amount of underspend is inevitable in an administration with a fixed budget and no borrowing powers. I can just imagine your frothing vituperation if there had been an overspend.

          You and your fellow pouters on here are just cogs in a broken, out of control outrage machine, sheeplike with your endless SNP Baaaaaaaad bleatings.

          Hot debate. What do you think? Thumb up 5 Thumb down 30

          Longshanks June 24, 2015 9:22 am Reply
          • An SNP supporter accusing others of being part of an ‘out of control outrage machine’. And ‘sheeplike’.

            I love the sense of humour!

            I mean, it was only this week that Nicola Sturgeon described the Conservative announcement to deliver what their manifesto said as ‘outrageous’. heehee!

            Hot debate. What do you think? Thumb up 21 Thumb down 1

            JB June 24, 2015 3:54 pm
  • Longshanks, obviously you and Mr Swinney agree that the Barnett Formula is over generous and Scotland really doesn’t have any problems, or is this money to be squandered on politics?

    Hot debate. What do you think? Thumb up 28 Thumb down 3

    richard June 24, 2015 9:01 am Reply
    • Dicky boy,

      Are you on a fixed income?

      If so, do you spend every penny you have in your sporran the day before payday, or do you keep a wee bit aside just in case?

      Just asking.

      Hot debate. What do you think? Thumb up 5 Thumb down 25

      Longshanks June 24, 2015 9:29 am Reply
      • Of course he keeps a wee bit aside “for a rainy day”, just like Swinney has done for election year!

        “Fixed income” should make it easier to budget because you know exactly what you’re getting. The underspend might be acceptable if it IS spent EARLY in the next year, it’s quite normal for jobs to fall behind but Newsie is alleging deliberate stockpiling of cash for political purposes, like election year.

        We need to be reassured that isn’t so while health and education services are failing,mat least, partly due to lack of funds.

        Hot debate. What do you think? Thumb up 23 Thumb down 1

        Andrew Argyle June 24, 2015 12:30 pm Reply
  • Not heard anything from the 2 other trolls on here. (NCH and Macmillan) Has Longshanks frightened them away?

    Just asking…

    Hot debate. What do you think? Thumb up 26 Thumb down 3

    John Smith June 24, 2015 9:39 am Reply
    • I might not be here but the real disgrace is that CARMICHAEL’s still THERE!!

      Hot debate. What do you think? Thumb up 1 Thumb down 21

      Machmaolain June 24, 2015 7:12 pm Reply
  • John Smith the troll. Me frightened away, no.
    Just online thanks. Glad you miss me.

    For Argyll in comparison to other web sites is poor.
    I prefer to seek my national news elsewhere and from different political sources. I dip in to see if there is any real news from Argyll and Bute bad sadly the answer is no. It is an anti-snp site full of ukippy tory trolls with maybe one or two from outwith Scotland but like to run down Scotland at every turn.

    As for the budget issue. Any underspend is used up. Unlike the uk overspend which is paid for by the poor and weak.
    So John can I say your beer is bitter- now where have I heard that term before.

    For Argyll has got worse over the past few years end of story.

    Hot debate. What do you think? Thumb up 4 Thumb down 35

    No Cheese Here June 24, 2015 10:14 am Reply
  • Longshanks, tell that to the people most effected!

    Hot debate. What do you think? Thumb up 25 Thumb down 3

    richard June 24, 2015 10:26 am Reply
  • Swinney is practicing the SNP politics of division, stash the cash and blame Westminster for everything.

    Hot debate. What do you think? Thumb up 32 Thumb down 3

    Nodrog June 24, 2015 1:29 pm Reply
    • Gordon,your economic skill set is as potent as your namesake Broon.

      Hot debate. What do you think? Thumb up 3 Thumb down 18

      Machmaolain June 24, 2015 7:13 pm Reply
      • And you Sir have been reading too many comic books, away on the corner and sit on yer bucket, so help ma Boab.

        Hot debate. What do you think? Thumb up 15 Thumb down 3

        Nodrog June 24, 2015 8:08 pm Reply
  • JB, in line with Full Fiscal Shambles,

    Hot debate. What do you think? Thumb up 21 Thumb down 3

    Rchard June 24, 2015 4:44 pm Reply
  • In my opinion Swinney is underspending to build up a war chest for the 2016 Scottish Elections.
    When the Scottish Budget is announced next year there will all sorts of sweeteners(bribes) to try to remain in power.

    Hot debate. What do you think? Thumb up 22 Thumb down 4

    Treble T June 24, 2015 6:29 pm Reply
    • And meanwhile people in Scotland die because services are under~resourced and our young people are receiving a substandard education.

      Hot debate. What do you think? Thumb up 17 Thumb down 2

      Lowry June 24, 2015 10:38 pm Reply
      • Any proof, or are these just more unsubstantiated allegations?

        Hot debate. What do you think? Thumb up 1 Thumb down 20

        Longshanks June 25, 2015 12:51 am Reply
        • Oh please! You can bury your head in the sand if you wish but the rest of us live in the real world. Open your eyes LS and look all around you.

          Like or Dislike: Thumb up 13 Thumb down 1

          Lowry June 25, 2015 9:15 am Reply
          • And by the way, where was the so called child’s “guardian” when s/he was needed?

            The SNP has introduced new legislation that some people may support, but surely even they expect it to work. Or is it all bluff and bluster – allowing at risk children to still to slip through the net?

            Like or Dislike: Thumb up 6 Thumb down 1

            Lowry June 25, 2015 7:02 pm
  • Newsie,

    can you show me where you got those underspend figures for education (£84m), Health (£12M) and Social Justice (£41M)?

    Like or Dislike: Thumb up 2 Thumb down 0

    jake June 25, 2015 3:09 am Reply
  • NCH, It seems you’ve been caught out, does Nicola follow you on twitter?

    Hot debate. What do you think? Thumb up 13 Thumb down 2

    richard June 25, 2015 8:53 am Reply
    • Don’t do twitter. So haven’t been caught out by anyone. More lies from Ricketty Richard supported by at least 8 neo anglo brits.
      If you guys had some brains you could be dangerous!!

      Like or Dislike: Thumb up 0 Thumb down 7

      No Cheese Here June 26, 2015 12:25 am Reply
  • Shouldn’t an underspend be hailed as responsible? The problem we’ve had for far too long is the irresponsible shifting of funds from one pot to the other merely to spend the money due to an underspend. If budgets and projects are under then they shouldn’t be merely shifted to another budget for the sake of it. Too much of that goes on already within Local Government already – ‘it’s year end so we better spend money for the sake of it’ when really it should be handed back. Are you saying it is better if it was an overspend?

    Like or Dislike: Thumb up 4 Thumb down 1

    Hughie June 25, 2015 10:44 am Reply
  • If the Scottish Government is having an annual underspend then the Scottish Government is receiving too much money from the Barnett Formula.

    Like or Dislike: Thumb up 6 Thumb down 1

    Treble T June 25, 2015 5:56 pm Reply
    • too much?

      Treble T prefers the money to rebuild the Westminster stye.
      There is a wee hoose up the Mall could be used. 2 old pensioners live in it I believe. They have a wee 2nd home at Balmoral where the natives are very nice!

      Like or Dislike: Thumb up 0 Thumb down 6

      No Cheese Here June 26, 2015 12:28 am Reply
      • NCH.
        It is obvious that the Scottish Government is receiving too much money from the Barnett Formula and despite some of the SNP run Scottish Government’s mad cap schemes Swinney cannot spend all of his budget every year.
        If you are such an expert what would you spend the annual underspend on.

        Like or Dislike: Thumb up 2 Thumb down 0

        Treble T June 27, 2015 12:09 am Reply
  • oops and another one at Windsor, engerlund and another……Also used to have a big boat too –now at Leith. Having to live on handouts from the Arabs and other Middle east states to keep their horses running. oh and the corgi’s

    Like or Dislike: Thumb up 0 Thumb down 7

    No Cheese Here June 26, 2015 12:31 am Reply

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