Critics question £1billion bill for devolution

THE cost of setting up and running devolved government in Scotland will pass the £1 billion mark in just three months' time, The Scotsman has learned.

The soaring costs of MSP salaries and their expenses has joined the rising civil service bill and the £431 million cost of the new Scottish Parliament building to present a cumulative bill of £1.03 billion.

Under the rules of devolution, the bill - which is growing at an average of 18 per cent a year - is taken straight off the budget for public services in Scotland.

The Scotsman has obtained figures showing the cost of MPs' salaries up 52 per cent, their expenses up 22 per cent and the cost of parliamentary staff up 96 per cent since 1999-2000. Some £600 million has been cumulatively spent on the new staff, MSP salaries and expenses and the running costs of both the Scottish Parliament and the expansion of the Executive.

Critics said they accepted that devolution was always going to bring extra costs in its wake but insisted a £1 billion bill seemed astonishingly high and demanded to know whether the Executive was making sure it got value for money.

The £1 billion sum would have been enough for five large hospitals or 40 secondary schools.

The Scottish Parliament cost £35.1 million to operate in 1999-2000 - its first full year in operation. The bill has now almost doubled - and is forecast by Holyrood authorities to come in at £66 million for the current financial year.

There are more than 1,100 people working in the parliament. But other costs include the commissioners, or "tsars" employed by the parliament.

The extra bill for running the Scottish Executive was £211 million until April 2004 - over and above the costs of running the previous government structure, the Scottish Office, before devolution.

Another £64 million is expected to be spent on administration in the 2004-5 financial year, taking the total bill for the extra costs incurred by the Executive since devolution to £275 million.

These costs have grown from a relatively low base in the first year of devolution to much higher levels today.

In 1999-2000, it only cost £11 million more to run the Scottish Executive than it did in 1998-9, the year before devolution.

By 2001-2, this premium had more than trebled to £38 million and by 2003-4 it soared to £56 million. For this financial year, the bill is £64 million - money which is siphoned from the allocation intended for public services.

Much has also been used to pay hundreds of extra staff, including civil servants, special advisers and press officers, whose numbers have grown substantially since devolution. The total civil service workforce has jumped from 41,100 before devolution to 48,000 today. One in three employed Scots work for government in one form or another.

A similar pattern can be seen with the running costs of the parliament, which started at a modest £25 million in 1999-2000 but hit £59 million this year.

The £1 billion price-tag for government is just 4 per cent of Scotland's overall block grant from the Treasury of about £25 billion a year, but critics warned that some of that money could have been better spent elsewhere.

Murdo Fraser, the deputy leader of the Scottish Tories, said: "The biggest growth industry in post-devolution Scotland has been in government itself.

"Little wonder that the Scottish economy is struggling to keep up with the UK as a whole when government here has grown to such an extent.

"All these costs have, at the end of the day, got to be picked up by individuals and businesses in Scotland. Surely if the Executive is serious about its efficient government agenda, it should be setting an example to the rest of the public sector."

John Swinney, for the SNP, declined to comment on the figures. But a Scottish Parliament spokesman said the money is a worthwhile investment. "The parliament's running costs include provision for supporting the work of each MSP, his or her local office and staff. It also covers all ministerial salaries, parliamentary staff salaries and the cost of all chamber and committee business," he said.

He added that the £1 billion figure contained one-off costs of starting up - including the expense of running the temporary chamber on the Mound while the Holyrood building was being built.

"The figures over the period reflect the parliament getting up and running, the cost associated with running two sites, relocating from the Mound, the creation of five new commissioners and their offices, and the higher cost of running Holyrood - a landmark building with more than half a million visitors."

A Scottish Executive spokeswoman insisted that devolution had brought better government.

She said: "Devolution has delivered more open and transparent government which is closer to the people it represents. We have delivered a wide range of achievements across all our areas of responsibility - helping to build a better Scotland. We also have more responsibilities, scrutiny and accountability now than we did before devolution.

"Investing taxpayers' money wisely is our priority. Our Efficient Government initiative and our wider work on reforming public services aims to ensure we and other public bodies are as efficient and effective as possible.

"As a percentage of our total expenditure, our administration costs are already at least 25 per cent below the comparable percentage figure for UK government. And the Executive's own core administration resource budget will also be flat in cash terms over the period of the spending review - until 2007-8."