Forum adverts like this one are shown to any user who is not logged in. Join us by filling out a tiny 3 field form and you will get your own, free, dakka user account which gives a good range of benefits to you: No adverts like this in the forums anymore. Times and dates in your local timezone. Full tracking of what you have read so you can skip to your first unread post, easily see what has changed since you last logged in, and easily see what is new at a glance. Email notifications for threads you want to watch closely. Being a part of the oldest wargaming community on the net. If you are already a member then feel free to login now.

Just been reading this story from the guardian. What the hell SNP?! Good job you didn't get independence!

Public sector debt in Scotland has mushroomed to record levels after an SNP government spending spree funded by billions of pounds’ worth of borrowing from pension funds, international banks and the Treasury.


An investigation by the Guardian has found that total borrowing to build schools, roads, railway stations, colleges and hospitals under the devolved government could reach £50bn by the end of the decade, putting a heavy strain on the public finances.

The scale of the debt, which dwarfs Holyrood’s annual budget of £30bn, has never been set out by ministers or investigated by the Scottish parliament. It has led to calls by Scotland’s auditor general, Caroline Gardner, and opposition parties for greater openness over public finances.

Full story here

http://www.theguardian.com/politics/2015/dec/15/scotland-debt-mountain-holyrood-borrowing-could-hit-50bn-by-2020

Scotland's 'debt' is completely blown out of the water by the UK's debt of around a trillion and a half pounds

But I suppose the UK's debt is 'good' debt.

 Do_I_Not_Like_That wrote:
Scotland's 'debt' is completely blown out of the water by the UK's debt of around a trillion and a half pounds

But I suppose the UK's debt is 'good' debt.

I guess everything's fine then

Scotland's income vs RoUK is pretty similar right?

Carry on spending!

 Do_I_Not_Like_That wrote:
Scotland's 'debt' is completely blown out of the water by the UK's debt of around a trillion and a half pounds

But I suppose the UK's debt is 'good' debt.

The UK's debt, which of course incorporates Scotland's, certainly is regarded as good. The UK has never defaulted on its public debts.

 obsidianaura wrote:

 Do_I_Not_Like_That wrote:
Scotland's 'debt' is completely blown out of the water by the UK's debt of around a trillion and a half pounds

But I suppose the UK's debt is 'good' debt.

I guess everything's fine then

Scotland's income vs RoUK is pretty similar right?

Carry on spending!

The article fails to mention the fact that a lot of the debt was racked up by previous administrations, so it's hardly the SNP's fault, but seeing as the guy who wrote the article is friends with certain people in Scottish Labour...




Automatically Appended Next Post:

 Kilkrazy wrote:

 Do_I_Not_Like_That wrote:
Scotland's 'debt' is completely blown out of the water by the UK's debt of around a trillion and a half pounds

But I suppose the UK's debt is 'good' debt.

The UK's debt, which of course incorporates Scotland's, certainly is regarded as good. The UK has never defaulted on its public debts.

Double standards though, Kilkrazy. Every country racks up debt, but if Scotland does it, it's the end of the world. That's what annoys people like me.

 Do_I_Not_Like_That wrote:

 obsidianaura wrote:

 Do_I_Not_Like_That wrote:
Scotland's 'debt' is completely blown out of the water by the UK's debt of around a trillion and a half pounds

But I suppose the UK's debt is 'good' debt.

I guess everything's fine then

Scotland's income vs RoUK is pretty similar right?

Carry on spending!

The article fails to mention the fact that a lot of the debt was racked up by previous administrations, so it's hardly the SNP's fault, but seeing as the guy who wrote the article is friends with certain people in Scottish Labour...

Can you explain?



UK appears to have a budget deficit of 5% and according to what I just Googled Scotland's is 40% higher than that

 obsidianaura wrote:

 Do_I_Not_Like_That wrote:

 obsidianaura wrote:

 Do_I_Not_Like_That wrote:
Scotland's 'debt' is completely blown out of the water by the UK's debt of around a trillion and a half pounds

But I suppose the UK's debt is 'good' debt.

I guess everything's fine then

Scotland's income vs RoUK is pretty similar right?

Carry on spending!

The article fails to mention the fact that a lot of the debt was racked up by previous administrations, so it's hardly the SNP's fault, but seeing as the guy who wrote the article is friends with certain people in Scottish Labour...

Can you explain?

Sure, a lot of the debt is PFI initiatives racked up by previous Labour administrations. PFI, first introduced by the Conservatives in the 1990s, is probably one of the greatest instances of daylight robbery that the British taxpayer ever suffered!

In short, a hospital that cost 1 billion to build under normal conditions, would usually cost 2 billion to build under PFI!

A lot of vested interests like PFI as it gives them the opportunity to line their pockets at the taxpayers' expense.

Labour also loved it, inflicting billions of PFI debt on not only Scotland, but the rest of the UK, when they were in power from 1997-2010...

But hasn't SNP done the same thing only faster putting £9bn into more PFI

“What the Scottish government is doing to add to public sector debt is like PFI on steroids. It is essential with the new powers coming to the Scottish parliament on tax, spending and borrowing that we have complete transparency on the nation’s finances.”

Scottish public authorities and ministers are committed to spending at least £9bn on dozens of privately financed projects overseen by the Scottish Futures Trust (SFT) – the arm’s-length body overseeing infrastructure investment. That is in addition to £22bn-worth of historic private finance initiative (PFI) debts still to be paid off.

Looking at this it seems that Scottish debt exploded as soon as the SNP came in. They've spent more than ever in the previous years.

 obsidianaura wrote:
But hasn't SNP done the same thing only faster putting £9bn into more PFI

“What the Scottish government is doing to add to public sector debt is like PFI on steroids. It is essential with the new powers coming to the Scottish parliament on tax, spending and borrowing that we have complete transparency on the nation’s finances.”

Scottish public authorities and ministers are committed to spending at least £9bn on dozens of privately financed projects overseen by the Scottish Futures Trust (SFT) – the arm’s-length body overseeing infrastructure investment. That is in addition to £22bn-worth of historic private finance initiative (PFI) debts still to be paid off.

Looking at this it seems that Scottish debt exploded as soon as the SNP came in. They've spent more than ever in the previous years.

That article in the Guardian is the biggest load of horsegak I've read in months!

A lot of Scotland's debt was racked up by Scotland's local councils. The SNP only have a majority in 2 out of 32 of Scotland's councils.

Most Scottish councils are controlled by the Labour party, and have been for decades. The SNP can't be blamed for Labour's financial mismanagement.

 Do_I_Not_Like_That wrote:

 obsidianaura wrote:
But hasn't SNP done the same thing only faster putting £9bn into more PFI

“What the Scottish government is doing to add to public sector debt is like PFI on steroids. It is essential with the new powers coming to the Scottish parliament on tax, spending and borrowing that we have complete transparency on the nation’s finances.”

Scottish public authorities and ministers are committed to spending at least £9bn on dozens of privately financed projects overseen by the Scottish Futures Trust (SFT) – the arm’s-length body overseeing infrastructure investment. That is in addition to £22bn-worth of historic private finance initiative (PFI) debts still to be paid off.

Looking at this it seems that Scottish debt exploded as soon as the SNP came in. They've spent more than ever in the previous years.

That article in the Guardian is the biggest load of horsegak I've read in months!

A lot of Scotland's debt was racked up by Scotland's local councils. The SNP only have a majority in 2 out of 32 of Scotland's councils.

Most Scottish councils are controlled by the Labour party, and have been for decades. The SNP can't be blamed for Labour's financial mismanagement.

If only they'd consulted an expert on it like you!

Foolish Guardian

Anybody with even a hint of how things work in Scotland, or the UK for that matter, could demolish that article in no time.

£50 billion debt?

By the beard of Zeus, the Scottish government is capped at borrowing a maximum of 2.5 billion a year!

It's borrowing powers increase slightly next year to 3 billion, but given that the SNP have only been in charge for 8 years, 8 times 2.5 billion does NOT EQUAL 50 billion!

Plus, as I mentioned above, the SNP were saddled with Labour's PFI debt, plus Labour controlled local councils have been wracking up debt.

Like I said, the newspaper article is complete and utter horsegak!

Something that doesn't make sense to me from the article.


it says "borrowing could hit £50bn by 2020"

and also

"set to dwarf Scottish parliament’s annual £30bn"

£30bn multiplied by 5 is £150bn so it sounds fine. Spend more.

 obsidianaura wrote:
Something that doesn't make sense to me from the article.


it says "borrowing could hit £50bn by 2020"

and also

"set to dwarf Scottish parliament’s annual £30bn"

£30bn multiplied by 5 is £150bn so it sounds fine. Spend more.

That 30 billion is not borrowing - it's the budget the parliament gets from Westminster!

Like I said, the article is pure horsegak

Any, I'm off, back tomorrow.

 Do_I_Not_Like_That wrote:

 obsidianaura wrote:
Something that doesn't make sense to me from the article.


it says "borrowing could hit £50bn by 2020"

and also

"set to dwarf Scottish parliament’s annual £30bn"

£30bn multiplied by 5 is £150bn so it sounds fine. Spend more.

That 30 billion is not borrowing - it's the budget the parliament gets from Westminster!

Like I said, the article is pure horsegak

Any, I'm off, back tomorrow.

That's what I mean, if my expenses were £50k over 5 years and I got paid £30K each year, I'd be pretty happy.

http://wingsoverscotland.com/the-pish-gallop/#more-79935

In short, most of it comes from PFIs inherited from previous Labour governments or is related to specific councils.

Around £15 billion could be laid at the SNPs door. As it is £50 billion is around 30% of Scotland's GDP, the UK as a whole has debts to around 90% of GDP.

PFI is one of the worst bits of financial shenanigans ever inflicted on the UK public by a government.

 Kilkrazy wrote:
PFI is one of the worst bits of financial shenanigans ever inflicted on the UK public by a government.

It must have made the people responsible an absolute fething fortune though. I still can't believe anyone could have been stupid enough to agree with it.

To follow on from the earlier description, it works something like this: Instead of funding a project (say a school or a hospital) directly, the government gets a private company to do the investment and rents it back to the government for a set period. At the end of the period I think the government gets the chance to buy it (having already paid at least double what it'd have cost them to build) or re-negotiate a rental.

It's a masterpiece in stupidity; our local school is a PFI, and it's nice and all, but the contract only allows them use from like normal school hours. They have to pay additional rent to use it out of hours. So the council needs to pay a private company an hourly rate to run a fething parents night, or anything extra.

The only benefit is that it makes the balances sheets look good for a few years whilst the pigfethers getting the backhanders on it can retire to let someone else clean up their gak.


As you can tell, I'm not particularly enthusiastic about it.

Yes, that is the gist of it.

It makes the current borrowing figures look better, at the expense of spending more actual money.

In other words, instead of the goverment borrowing £100M at 3%, an ongoing cost of £3M a year, it pays a private company perhaps £5M a year to build the project and rent it back to the goverment. (I made up the figures for the sake of illustration.)

Many NHS trusts are getting into serious financial difficulty because thir hospitals have been built under PFI schemes.

 Kilkrazy wrote:
Yes, that is the gist of it.

It makes the current borrowing figures look better, at the expense of spending more actual money.

In other words, instead of the goverment borrowing £100M at 3%, an ongoing cost of £3M a year, it pays a private company perhaps £5M a year to build the project and rent it back to the goverment. (I made up the figures for the sake of illustration.)

Many NHS trusts are getting into serious financial difficulty because thir hospitals have been built under PFI schemes.

Yep, the chickens are well and truly coming home to roost for PFI.

On the subject of the SNP's 'debt,' if the article's calculations are too be believed (and quite frankly they're horsegak IMO)

then Scotland's debt to GDP ration is 30% and the UK's is 90%...

and yet, Scotland has the debt problem

It's a terrible article - no like-for-like comparisons, no attempt to put the numbers in any kind of UK-wide context. Just DEBT!!!!!OMGOMGOMGBIGNUMBERS!!!!

Actually, if I'd noticed it was a Severin Carrell piece, I wouldn't even have wasted ten minutes reading it. These days, the Graun has just a handful of really good journos worth reading.

PFI is the ultimate "kick the can down the road and hope nobody notices". For every £1 the government would have paid "cash in hand", the estimates are that it would have cost £2 in borrowing; PFI works out at £5-7...

For all that they claim to have learned lessons, the current government's PFI 2 is looking just as bad.

Of course the flip side of PFi is that it allowed new facilities to be built that would otherwise have not been built which would return to public ownership on completion of the initial contract.

Having built them I have never found any desire from those that use them for refurbished buildings. The real scandal is Govt procurement efficiency vs private and the hoards of feckless consultants that must be used.

As for Scottish debt, a three fold increase since 2007 (on top od council debt) and a projection of it increasing does speak of the SNPs desire to govern without any austerity to indicate somewhat pie in the sky economics. I think the Blair/Brown govts show us how well that turns out.

What's all this talk about the market not providing a good solution? Sounds like communism to me!

 Do_I_Not_Like_That wrote:

 Kilkrazy wrote:

 Do_I_Not_Like_That wrote:
Scotland's 'debt' is completely blown out of the water by the UK's debt of around a trillion and a half pounds

But I suppose the UK's debt is 'good' debt.

The UK's debt, which of course incorporates Scotland's, certainly is regarded as good. The UK has never defaulted on its public debts.

Double standards though, Kilkrazy. Every country racks up debt, but if Scotland does it, it's the end of the world. That's what annoys people like me.

You misinterpret what people have been saying to you.

1. The iScotland spending plan during the independence campaign didnt add up, and would only be workable by borrowing huge amounts of money compared to GDP and using the UK as guarantor.
Salmond promised maximised benefits lox taxes (for the working class) and a strong economy. Using the magick word oil as a cover-all without reference to the true status of North Sea stocks.
Essentially he would have Africanised the economy, a bonanza for two terms post indepdenence then massive unrecoverable debt.

2. Holyrood can borrow but only in proportion to the rest of the UK, which add limits. People are alarmed because Sturgeon is quickly borrowing up to those limits in record time. £50Bn for Scotland alone on what is a boost to the welfare budget is a lot, as this has happened only since the purse strings were loosened which wasn't that long ago.

It all boils down to one inescapable truth: The SNP is all about borrow now, squander now and think about the consequences later, if at all; preferably trying to make England pay the bill by joint currency. The main parties and HM Treasury are wise to this.

There is the ancillary problem that Gordon Brown mismanaged the economy so badly in 2008-10 that the UK's own debt has spiralled and it has been very difficult for subsequent governments to put a lid on it. While the UK can be blamed for that we must remember that Scotland was behind New Labour and Gordon Brown is himself Scottish and voted in by a Scottish constituency.

The potential problem of the Holyrood debt is that it is on top of Scotland's share of the UK's national debt.

If the UK's national debt is 90% of GDP, and Holyrood's is 30% of Scotland's GDP, then it can be estimated that Scotland's national debt (if it had one as a separate economy) would be 120% of its GDP.

This is not necessarily a problem in itself. Japan's national debt is 200% of GDP and it is the world's third largest economy. No-one thinks Japan is going to default.

As for PFI financing of hospitals, without PFI it could have been done the old-fashioned way, by central government spending, or it could have been done the new-fashioned way, by issuing local goverment bonds. It could even have been done by allowing private companies to build hospitals at their own risk, and allowing NHS trusts to refuse them. The UK managed to build infrastructure before PFI. Most of the railways were built with private capital.

PFI was preferred by the government because it kept power centralised at Westminster while allowing the government to kick the can of the financial consequences down the road at the same time as doshing out big sums to private industry.

 Orlanth wrote:
£50Bn for Scotland alone on what is a boost to the welfare budget is a lot, as this has happened only since the purse strings were loosened which wasn't that long ago.

You evidently haven't actually read this thread have you? Not a single penny of that £50bn has anything to do with welfare (unless you count infrastructure as welfare) and only around £15bn has anything to do with the SNP and that is due to its capacity as the current Scottish government..

While the UK can be blamed for that we must remember that Scotland was behind New Labour and Gordon Brown is himself Scottish and voted in by a Scottish constituency.

And? Scotland can't vote in any government on its own, if they could the UK could be run by the SNP now.

 Kilkrazy wrote:

If the UK's national debt is 90% of GDP, and Holyrood's is 30% of Scotland's GDP, then it can be estimated that Scotland's national debt (if it had one as a separate economy) would be 120% of its GDP.

I very much doubt that an independent Scotland would inherit the full UK debt without some significant concessions first.

The full debt? No. However, Scotland's proportional share of the debt would still be the same percentage, more or less, of its own GDP.

 AndrewGPaul wrote:
The full debt? No. However, Scotland's proportional share of the debt would still be the same percentage, more or less, of its own GDP.

Which won't automatically be transferred to an independent Scotland, it would be something that would need to be negotiated.

There would be a negotiation, and the proportion of UK debt to be assigned to Scotland would not be zero. The Holyrood debt would be added to that.

 Kilkrazy wrote:
There would be a negotiation, and the proportion of UK debt to be assigned to Scotland would not be zero. The Holyrood debt would be added to that.

It's always been assumed that as Scotland is 10% of the UK, it would get 10% of the UK's debt in the event of independence, which is fair enough.

Other ideas have been explored, such as leasing the nuclear subs base back to the UK, in exchange for debt write off, so there is room for negotiation.

It would all be up for negotiation.