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The State of the State in Scotland

Powering ahead

Scotland’s government has now been led by the Scottish National Party for three consecutive terms in office. In those eleven years, the administration has taken forward the possibilities of devolution to shape a Scottish public sector landscape that now differs substantially from the rest of the UK – in its public finances, it policy priorities and its ethos.

The independence referendum in 2014 may have kept Scotland within the union but it accelerated further devolution of borrowing, tax and welfare powers. In this year’s State of the State interviews, leaders in government and the public services told us how those powers have fundamentally altered Scotland’s fiscal environment and created a clear connection between the country economy, its taxpayers and its budget for public spending.

The Scottish Government has achieved a significant upskilling in its capabilities to deal with those new financial responsibilities. As one senior figure explained, no other part of the UK has the same scale and complicity as Scotland’s fiscal arrangement.

The connection between Scotland’s economy and its ability to fund public services is not just felt in its central government, but across its local public services. Local authority chief executives told us that tier central challenge was to support growth, but crucially, to make sure that growth was inclusive. 
Local public sector leaders recognise that their finances are likely to be more strained in the future, and they see greater collaboration, along with a shift towards greater personal reasonability for citizens, as important levers for change.

Our interviews this year made clear that the ethos of Scotland’s public sector is unique within the UK. Many described a political outlook that manifests itself as a collective, national desire to address inequalities that play out as life chances. Some were clear that Scotland could be shifting to a more Scandinavian model of more extensive, better funded public sector interventions paid for by higher tax rates.

Several interviewees also told us that the public sector workforce feels more valued by central government than their counterparts in England, which to some extent makes senior roles in Scotland more attractive then they might be south of the border – but not quite enough to alleviate talent shortages being felt across the sector.

Led by Scottish Government policy, Scotland public sector does not work with the private sector to the same extent as elsewhere in the UK. Leaders across the local public services largely felt that this put them at a disadvantage.

Brexit is of course a significant pre-occupation in the Scottish Government, but in common with the rest of the UK, leaders in the local public services have seen little impact to date. Most of our interviewees aired concerns that the Scottish Government has not been able to influence negotiations as much as they would like, and one expressed doubt that EU funding for agricultural and regional development would continue to be matched by the UK government in the long term. 

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