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John Swinney
Scottish finance secretary John Swinney arrives for the budget debate at the Scottish parliament in Edinburgh. Photograph: David Cheskin/Press Association
Scottish finance secretary John Swinney arrives for the budget debate at the Scottish parliament in Edinburgh. Photograph: David Cheskin/Press Association

Scottish public sector workers to get first pay rise in three years

This article is more than 11 years old
Angry union leaders say below-inflation 1% offer to hundreds of thousands of workers is still a pay cut in real terms

John Swinney, the Scottish finance secretary, has offered hundreds of thousands of public sector workers a "modest" rise in pay for the first time in three years in his draft budget.

Scottish trade unions said the 1% across the board wage increase, to come into effect next April, was too mean. They accused him of copying George Osborne's pay restraint policies "almost to the letter".

With local councils offered no new money, the pay rise would mean other services would need to be cut.

Grahame Smith, general secretary of the Scottish TUC, said UK government spending cuts had put Swinney in a very difficult position, leaving the Scottish government with the tightest budget in recent times – about £28bn.

Smith added: "However, it is disappointing that Mr Swinney has followed George Osborne's public sector pay policy almost to the letter.

"A third year of significant real-terms wage cuts for hundreds of thousands of workers puts Mr Swinney's attempts at stimulus into perspective."

Chris Keates, general secretary of the NASUWT teaching union, said she was furious. She said the pay rise, which is less than inflation, was so slight it was effectively another freeze.

It would, she said, hit morale again in the profession and increase teachers' resentment following repeated attacks on their pensions, conditions and pay.

"Teachers and other public servants are being made to foot the bill for the economic downturn at a time when their pensions are also being attacked and the cost of living is accelerating," Keates said.

"This budget will do little to alleviate this frustration and risks jeopardising the progress which has been made in recent years to raise educational standards and develop a world-class teaching profession."

Swinney admitted that the 1% increase, which will exclude public employees earning over £80,000 and see slightly higher rises for those on less than £21,000, would have to be funded from existing budgets for local councils and public sector bodies.

Despite their frustration with the settlement, Scottish union leaders are unlikely to back proposals for the general strike suggested at the TUC annual conference earlier this month.

Sources said the unions were more concerned about protecting jobs at this stage: Swinney again promised there would be no public sector compulsory redundancies despite the cuts.

Swinney's draft budget for 2013/14 is the second year of a three-year spending plan. It has not deviated significantly from his original proposals but does include minor changes designed to improve economic growth.

He said there would be £40m in accelerated spending on affordable homes, £17m more for colleges and student support, a £15m fund to support 10,000 new jobs for young people – which needs match funding from European structural funds and employers – and £80m in accelerated spending on new and refurbished schools.

The total package was worth £180m but will be funded through cuts in other areas: the legal aid budget will be heavily affected, down from a peak of £220m in 2010 to £149m next year.

Swinney has also taken £45m away from publicly-owned utility Scottish Water and will allow it to raise water charges for the first time in several years. At present, Scottish consumers' water bills are on average £52 lower than English people's.

Historic Scotland, the ancient monuments agency, will get funding of £44m – £5m less than 2010. Its funding for 2014 will be cut further to £35m. The Scottish Court Service funding will be cut from £93m in 2010 to £73m next year.

Kevin Keenan, a councillor and the finance spokesman for the Convention of Scottish Local Authorities – the umbrella body for 32 councils – said the sector faced continuing challenges and warned the heaviest impact would come once the UK government's welfare reforms hit fully in 2014.

"As part of the settlement discussions with government, we have highlighted that whilst 2013/14 will present challenges for us all, the 2014/15 settlement will require further talks between ourselves and government as the full extent of issues like welfare reform hit local government," he said.

Dan Barlow, head of policy at the environment group WWF Scotland, said Swinney's green investments were too modest and limited to have a significant impact on climate and fuel poverty.

Swinney was still focusing heavily on major road-building projects and spending too little on energy efficiency.

"Although there were warm words on cycling, the transport budget is still massively dominated by large road schemes," Barlow said.

"The balance of transport spend needs to shift very significantly in favour of active travel and public transport if we are to deliver a healthy and low-carbon transport system."

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