MSPs: Heard Budget statement

The Scottish Executive has set out its budget for the period to 2008 with a promise to extend "enterprise, opportunity and fairness".

The Holyrood finance minister Andy Kerr announced higher investment in capital infrastructure, which will increase by almost 40 per cent over the three years to more than £3 billion.

He also pledged £650 million of annual efficiency savings by 2007/08 - exceeding the target of £500 million.

He also detailed a 30 per cent increase in spending on further and higher education by 2007/08.

Transport was another key winner - securing an annual increase of 14 per cent.

That cash will kickstart public transport projects such as train links to Edinburgh and Glasgow airports, new rail routes, trams in Edinburgh and progress on completion of the central Scotland motorway network.

Health spending will rise by 8.5 per cent a year to "reduce waiting times and to continue to invest in health promotion".

"This is a Budget for enterprise, opportunity and fairness and a Budget that locks in sound financial management for the longer term," Kerr told MSPs.

"By 2008, our spending plans - and the rigorous way in which we press for value for money in all we spend - will see additional growth of more than five per cent in frontline services.

"Increased productivity in our public sector and increased innovation and enterprise in our private sector.

"Devolution is working for Scotland - but we need to do more. We need to make better use of our resources and we have allocated enough funding to each department to allow them to meet their partnership agreement commitments.

"We need to drive harder and faster for economic growth, for achievement in education and science, for faster and better health care and for safer communities."

Dismissed

The coalition's political opponents dismissed Kerr's statement as a series of rehashed announcements and vague pledges.

The SNP's Alasdair Morgan said: "Far from being a real budget, all Andy Kerr is doing is spending the pocket-money Gordon Brown gives Scotland after the chancellor has taken our oil revenue and tax receipts.

"To me, a Budget is a grown up political strategy that sets the personal tax rates and macro-economic direction for the nation.

"Andy Kerr by contrast can tell us that school kids will get water coolers in the classroom but can’t tell us what our inflation target should be. It was an exercise just about as far from a real budget as it is possible to be.

"Even on the few specifics he did announce – such as the welcome increase in university funding - he was so vague it left people wondering whether he was unwilling or actually unable to give us details.

"He couldn’t tell us when the transport plans would be completed; how much the foster carers allowance would be or even to what extent the executive hope to increase economic growth."

Shortfall

Kerr's announcement also comes amid growing fears that flagship executive plans could run substantially over budget.

Data released on Tuesday revealed a projected overspend on free long-term care for the elderly.

The policy was expected to cost £250 million in its first two years.

But following increased take up it has already cost £126 million in its first nine months - which could lead to a £100 million overspend.

The Federation of Small Businesses in Scotland also expressed concern at the "lack of detail" on how the spending announcement would help business and boost economic growth.