CBI Scotland urges more capital spending despite cutbacks

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Business lobbying group CBI Scotland has urged Scottish Ministers to inject more money towards capital spending projects even if the UK Treasury refuses to relax spending constraints.

The group has called on the Scottish Government to cut funds to services and plough the cash into infrastructure projects.

CBI Scotland called for more private involvement in providing services and urged Ministers to consider more private finance involvement.

The lobbying organisation, whose parent company is based in London, also called for public services to be opened up to private tender.  Some of the suggestions, which included hospital cleaning and catering and GP practices, mirrored moves in England where areas of the English NHS have been subject to controversial reform.

It also demanded that local authorities allow private firms to be able to tender bids for services such as roads maintenance and contact centres.

Iain McMillan, the controversial director of CBI Scotland, who has been outspoken in his Unionist views, said: “Despite the fiscal stringency which will be required from the public purse over the next few years, there remains a pressing need for the devolved government to sustain investment in and support for the economy.

“The Scottish Government should put economic growth at the very centre of its upcoming spending plans.

“A bolder approach to making savings and promoting competition is needed in order to keep business taxes down and protect important GDP-enhancing investments in infrastructure, skills development, and export support.”

The calls for more capital spending echo similar requests from the Scottish government who have consistently urged UK Chancellor George Osborne to target infrastructure.  However CBI Scotland backed the Chancellor’s priority of cutting the UK deficit and continue with the austerity measures.

A Scottish government spokesman responded to the CBI’s calls, and said: “The Scottish government and our agencies are doing all we can within our current powers to strengthen the economy, to create and bring jobs to Scotland, to stimulate growth, and to sustain the most supportive environment for business in the UK.

“The latest Ernst and Young report showed that, for the second year in a row, Scotland is the top performing location in the UK for securing inward investment jobs – with Scottish Development International widely recognised as one of the most successful agencies in the world for landing overseas investment.”

The spokesman went on: “We also remain firmly committed to our flagship policies supporting Scottish households, such as the council tax freeze, the abolition of prescription charges, free higher education and free personal care, while driving forward our programmes of public service reform and efficiency.”