THE SNP government will this week order a one-year pay freeze for 250,000 public sector workers.
Finance secretary John Swinney will announce the hammer blow when he
presents his Budget at Holyrood on Wednesday. The Scottish government
have £1.3billion less cash next financial year as a result of Con-Dem
The wage freeze - which will apply to all workers in the devolved
public sector earning more than £21,000 - will save £300million.
Swinney, who claimed it would protect 10,000 jobs, will try to soften the blow by announcing a council tax freeze for next year.
But local authorites have said government cash offered in return for
pegging bills is not enough to protect have said government cash
offered in return for pegging bills is not enough to protect services. A
number - led by Glasgow - have hinted they may reject the plan.
Swinney said the announcement was "the most challenging budget in the history of devolution".
He added: "No one is under any illusions about the scale of the cuts which are being imposed on us by the UK Government.
"Hard choices will need to be made - but it can be easier for all
who live here and cohesion maintained with in our communities by
developing a 'social contract' with the people of Scotland.
"Thanks to our partnership with local councils, that freeze has now
been del ivered for three years running - and has brought much-needed
relief to households in every part of the country.
"If that help with household bills was a welcome boost in better
times, it has become absolutely essential in the current economic
As part of his "social contract" he will also end prescription charges and keep free care for the elderly.
Government sources said public sector staff earning over £21,000 who
the freeze would apply to made up about half the 500,000 total.
The Scots Tories yesterday backed the plan. Labour also accepted the
need for pay restraint - but they said the council tax freeze would
"rob funds from vital services".
And they accused the Nats of producing a one-year "elect ion budget"
ahead of next May's poll that ducked tough spending decisions. Finance
spokesman Andy Kerr said: "Swinney's talk of a social contract is
nothing more than a smokescreen for cuts that will hit children and
"He is also creating uncertainty throughout the public sector by refusing to set a three-year budget.
"Ministers have been told how much money they have for the next
three years, so they should give local councils, schools and the NHS the
The row erupted as Lib Dem Scots Secretary Michael Moore confirmed
plans to make Holyrood responsible for setting a portion of income tax.
The move will see MSPs dutybound to raise about 35 per cent of taxation in Scotland, up from 15 per cent now.