Written by Harry Johnson for the Telegraph
After the Conservative government has regained progressive support Scotland once again finds itself facing a large deficit. There is much debate of potential tax raises ,but perhaps cutting waste may be the better solution. To understand why it may be worth taking a look as to where Scottish taxpayers may not be getting value for their money and where savings can be made.
The sports subsidy for instance is a well-intentioned misfire.. A US federal reserve study found that for every 1 dollar of federal aid allocated to students the colleges would simply raise the prices by 60cents, netting the prospective student a meager 40 cents in relief. That is certainly far from a one to one comparison but shows us just how wasteful these government subsidies truly are.
The same problems arise when examining other expenditure proposals such as the pupil premium, which according to Ofsted has resulted in millions being wasted on chasing unrealistic targets and hiring overpaid teaching assistants. Neither of which have been shown to have a major impact on student attainment.
Comparatively speaking however these projects are relatively benign compared to arguably the biggest long-term drain on our coffers – the Scottish pensions agency. Combined the public sector pensions represent over 6.4 billion or roughly 15% of the budget. This is in contrast to Westminster, where pension schemes overall represent less than 3% of the overall budget.
Infrastructure is another area where major savings can be made with examples of this are the Green Infrastructure Strategy in Scotland . In this case over 5 billion pounds are to be diverted from the Treasury coffers in exchange for the prospect of some long-term benefit. Yet as time goes on these benefits get smaller and smaller until we are making a net loss. To see how one only has to look south of the border.
Initially, the HS2 project was supposed to bring in 2.40 pounds for every pound spent. In 2013 that figure was revised to 1.80. Currently, experts like Lord Berkeley estimate the railway to bring 0.66 pounds for every pound spent. A net loss of 34 pounds for the privilege of literally railroading communities out of existence and the destruction of ancient woodlands.
Yet the same principle holds true for virtually every single such government program. The supposedly infallible National Health Service keeps lagging in survivability and placing far behind its marketised European counterparts in rankings despite unprecedented investment and cross-party support. In England, universal child care was a similar story with even the Conservative Party rightly recognizing its utter failure and replacing it with a much smaller, yet more effective help to pay model expected to cost only a sixth of the original bonanza.
There is undeniably room for government spending and intervention in a modern economy. A strong national defense and judiciary must exist to stop bad actors and uphold contracts just like some sort of a safety net must exist to protect the least fortunate from slipping through the cracks, but ultimately this is not the subject of this debate. What the taxpayers are being asked to do in Scotland is to foot the bill for a white elephant.
That’s why you the taxpayer should not ask yourself how much is being spent, but rather what percentage of this funding will benefit you and the society at large because every time you will know how to spend that money better.