Spending on Scotland’s public sector has soared – but the system is now in danger of collapsing, argues Tom Harris

Political generosity has given public sector workers an economic advantage over staff in private industry and an advantage over workers doing the same jobs south of the Border. Which is fine – but only if it is affordable.

Devolution was never going to result in a leaner, more efficient public sector.

Just cast a glance back at the main proponents of the devolution project in the 1980s and 1990s: trade unionists (representing far more public than private sector workers), churches, charities and a whole range of politicians from the Left-wing parties, many of whom, astonishingly, ended up being elected as MSPs themselves.

The campaign was energised by the Thatcher government’s financial discipline.

Asking local authorities and Whitehall departments to constrain the growth in public funding was anathema to those on the Left.

Scotland needed its own parliament in order to produce ‘Scottish solutions to Scottish problems’ – code for ‘more spending than the UK Government will allow’.

And so it has proved. Scotland is addicted to public spending, public jobs and public services for which we shouldn’t have to pay.

Take a look at Ms Robison’s Budget as a fine example of the ‘something for nothing’ principle that dominates Scottish political discourse.

She wants the two-child benefit cap in Scotland to be abolished (though not until the beginning of 2026) and wealthier pensioners will hold on to their winter heating allowance, unlike in England.

There was even some mild relief for Scotland’s taxpayers – some of them, at least, who will be marginally better off once thresholds on lower income tax bands have been shifted slightly upwards.

It’s time Scotland started cutting its coat according to the cloth we can actually afford, Tom Harris argues

But the Scottish Government’s own figures suggest that the number paying the higher rate of tax (42 per cent) will rocket from 60,000 to 554,000, while the number of advanced rate taxpayers who pay 45 per cent is forecast to soar by 14,000 to 128,000.

Wealthy Scots are regarded by our political classes like the private sector: only there to provide a ready stream of cash to fund the public sector. Exactly how well spent is that money raked in from business and individuals?

Glasgow City Council, which has some of the worst areas of financial deprivation in the country, recently hired a new chief executive at a cost of £200,000 a year.

Salaries must be competitive with the private sector to attract the best candidates, we are told.

But the new incumbent, Susanne Miller, like almost all her predecessors, is another veteran of the public sector.

Caroline Lamb, who’s in charge of our struggling NHS, received a pay rise earlier this year, taking her own salary up to £200,000.

Meanwhile, Audit Scotland raised concerns about ‘unacceptable use of public funds’ at the Water Industry Commission for Scotland.

These included spending £77,350 of taxpayers’ cash sending the chief operating officer of former boss Alan Sutherland business-class to an extended MBA course at Harvard and £402.41 on a dinner for two at a luxury hotel.

And let’s not forget Ken Thomson, the former senior civil servant with the Scottish Government, who told a group WhatsApp chat during the Covid pandemic: ‘Just to remind you (seriously) this is discoverable under FOI. Know where the “clear chat” button is.’

He also said ‘plausible deniability’ were his middle names.

Mr Thomson retired from the civil service in November 2023 with a CBE and a pension pot worth £1.4million.

It’s not just exorbitant salaries but ill-judged policy decisions that put pressure on government budgets.

The disastrous debacle over ferry procurement by the Scottish Government has seen costs spiral from less than £100million to more than £350million, on vessels that are now more than seven years late.

Had a private company embarked on such a slipshod, incompetent process to secure two new boats, it would either have gone bust or its shareholders would have stepped in.

But in Scotland, the public purse is regarded as bottomless, so long as politicians are spending the cash on the ‘right’ things.

Before she was forced out of her job as Secretary of State for Transport, Louise Haigh awarded an inflation-busting pay rise to train drivers without asking for workplace reform in return.

That approach is writ large in Edinburgh, where the answer to every political problem is always more cash.

In years gone by, it was generally accepted that public sector pay, on average, was a bit lower than what the private sector could afford, due to the greater efficiency and profit-making mindset of the latter. But health and local government workers were compensated with better pensions and the prospect that their retirement, when it came, would be more comfortable than if they had paid into a private pot.

That is another assumption that has been upended. The public sector now leads the private in both salary and pensions. It’s little wonder that demand for work in the public sector is growing while the private sector faces serious skill shortages and unfilled vacancies.

This mindset is not confined to Scotland and pre-dates devolution – even if devolution has given local politicians more freedom to feather the public sector nest.

In the 1980s, when local authorities lost much of their housing stock to people who exercised their right to buy, it might have been expected that housing departments, with significantly fewer properties, would shrink or even go out of existence.

Instead many of them grew in size! More staff were hired to do less and less work.

Of course, it doesn’t have to be this way. But change would take two qualities that are sadly lacking in our political institutions – leadership and courage.

No Scottish politician ever lost votes by saying they wanted to expand the tentacles of the state ever further.

No MSP ever failed to win a round of applause by demanding that, however tough a local government spending round, there must be no reduction in any local authority’s workforce.

Labour, with its close ties to the unions, is particularly vulnerable to political pressure to maintain support for profligacy in the public sector.

Unions themselves have reflected that cultural shift from private to public in the last four decades.

In the 1970s, they dominated the workplace, ordering bosses around by threat of industrial action that could be triggered with no more than a show of hands at a meeting hastily convened in a nearby car park.

Following legislation introduced to regulate the unions, membership has dwindled to about 22 per cent of the workforce. And only 12 per cent of members are employed in the private sector.

So it’s logical that when unions organise for better wages, more job security and more jobs for their members, they’re doing so overwhelmingly on behalf of the public sector.

And Labour, funded largely by those trade unions, knows which side its bread is buttered on.

The SNP also likes to preen itself as a left-wing party and has, while in charge of the Scottish Government, extended its relationships within Scotland’s trade unions.

The Scottish Trade Union Congress, once the exclusive domain of the Labour Party, has developed positive relations with SNP ministers.

There is little prospect of tighter financial discipline in public institutions when the country’s two biggest political parties are in thrall to the unions and to the public sector workers they represent.

The gravy train that is so generous to senior council, health service and quango officials isn’t about to be derailed so long as either the SNP or Labour hold the financial reins at Holyrood.

But opinion polls make bleak reading for the prospects of the Scottish Conservatives – at least for those ambitious Tory MSPs who might hope for a ministerial job one day.

And it remains to be seen what disruption will be caused when the first cohort of Reform MSPs arrive in May 2026, as the polls suggest they will.

Whichever party grasps this particular nettle, doing nothing to restrain the disastrous growth of the public sector is no longer an option.

We’ve all heard the joke about the three schoolkids arguing in the playground about which of their dads is the fastest.

One says his is a racing car driver, so is the fastest. The second boasts that his is an airline pilot and therefore the swiftest. But the third boy says his dad works for Glasgow City Council and must be the fastest because although he finishes work at five, he’s always home by four-thirty.

As a former local government employee I’ve seen the waste and inefficiencies that have become ingrained in the system.

The fiercely-defended ‘flexitime’ system was designed to allow those with particularly large workloads to accumulate extra hours that they could ‘bank’ and use for extra time off later.

But it became an entitlement that was regularly abused by staff, who would arrive early in the day and sit at their desks reading newspapers, or wait in the office doing the same at the end of the day, just to add to their total of accumulated time off.

Woe betide any manager who threatened to reform or even scrap the system. Up to two whole days a month could be wrangled if you knew how to exploit it efficiently enough. And many did.

It is just one of the countless ‘Spanish practices’ that still hobble the public sector, and that’s before we even look at the extraordinary cost to the public purse of employing ‘agency’ (private, freelance) healthcare staff on our hospital wards in lieu of proper full-time nurses.

Meanwhile, private sector workers struggle on with their lot: lower pay, more hours, less job security. Private firms must sink or swim, depending on their own efficiency and ability to innovate, not to mention the hard work of their workforce.

Yet the public sector is guaranteed, from one year to the next, that it will keep going, no matter what.

Scotland desperately needs that spirit of efficiency and innovation in every part of our economy.

Those who genuinely care about the future and quality of our vital services must understand that they are doing them no favours by allowing inefficiencies and costs to spiral.

If the current situation is, as Audit Scotland has warned, unsustainable, that means action must be taken and taken soon.

For the sake of our public services and those many Scots who depend upon them, it’s time to start cutting our coat according to the cloth we can actually afford.