Graeme Roy: Crucial to scrutinise costs of politicians’ election promises

Promises to extend free school meals, to double the new child payment or to introduce an NHS spending escalator are all worthy pledges. What is there not to like?

But presented as they often are by each party – more money for the NHS, more money for schools or tax cuts for the economy – such manifesto commitments only ever offer a partial picture of the policy challenges facing whoever forms the new government after May 6.

The reality, in a world of tight budgets and increased demand on public services, is that such promises necessarily mean savings elsewhere, or taxes need to rise.

This is not to argue that such “new” commitments are not a good idea, or that higher taxes for better quality public services are not a good idea either. But to fully appreciate the consequences of election promises we need to look just as much at the costs – and crucially the “opportunity cost” of what the money could be otherwise used for – as we do at the apparent benefits.

Take the Conservatives’ announcement of an NHS escalator. This is a commitment to increase the NHS Budget by two per cent above inflation or the UK Government Barnett consequential figure, whichever is bigger.

More money for the NHS is understandably a clear priority for most voters. But should the Barnett figure be the lower of the two, this policy commits to the diverting of money from other devolved areas to make up any difference. So, where in the budget will we see this come from?

Similarly, the Institute for Fiscal Studies has also pointed out that some SNP commitments use up temporary Covid funding support and that “paying for such policies may be more difficult in 2022/23 and beyond”. So how will these be paid for?

To be fair, costing manifesto commitments isn’t helped by the fact that the outlook for the Scottish budget is so uncertain.

Whilst the tax powers of the Scottish Parliament have increased in recent years, Holyrood’s overall spending envelope remains anchored to the block grant from Westminster.

What Chancellor Rishi Sunak chooses to do next will have huge implications for any manifesto pledges this election. Now, most commentators see a return to the austerity of the early 2010s as unlikely. But equally, the UK public sector is on track to borrow over half a trillion pounds over the course of 2020 and 2021 to pay for Covid-19, with the tax burden to reach its highest share of our economy since the late 1960s.

It would be a brave politician, therefore, who banked upon a dramatic real-terms increase in UK public spending over the next five years to pay for new manifesto pledges. Indeed, we know that non-protected budgets in England are facing cuts in 2022/23 relative to pre-Covid plans.

The costing of manifestos is always high risk for politicians. As a result, parties often seek to publish the minimum of detail.

The downside, however, is that little debate is given to how to manage – or support structural change in – areas that are less of a priority. We can see the impact of this in local government, where a decade of tough budget settlements, the result of commitments to protect other policy areas, has led to the scaling-back of many valued council services.

A further concern is that by focusing upon simple – albeit popular – policy initiatives, debates over the complex reforms required to Scotland’s public services are crowded out.

This year marks the 10th anniversary of the Christie Report which, amongst other reforms, implored the public sector to shift to a model of preventative spend. That is, to invest in tackling the underlying causes of poor health, social and economic outcomes rather than focusing upon how much we spend dealing with the consequences of these poor outcomes.

But a decade on, and with some notable exceptions, progress has been slow. Only a limited number of the long-run reforms required to protect NHS budgets or to tackle inequalities, for example, have been implemented. All this time, the scale of the challenge has increased.

Surprisingly, since the start of devolution there has been little effort to evaluate what policies have genuinely worked, to understand why some have been less successful, or to reflect upon whether some of the promises set out each election have been delivered. The result is policy inertia and pledges from across the political spectrum that drift seamlessly between elections with, at the most, minor changes around the edges.

An obvious question is what to do about this?

On the one hand, election debates in Scotland appear to be no different from many other countries. Perhaps it is naïve to expect detailed policy debates in the run-up to and during a highly charged campaign, particularly given the political and constitutional context overshadowing this year’s election.

But there are changes that could make things better.

We need to invest in ways to develop new policy ideas. Our think-tank community needs to be better supported to grow from its current small base to help the generation of new ideas necessary to tackle the challenges that lie ahead. At the moment, very few receive public funds, creating a huge imbalance between the resources available to the incumbent party in government with its army of civil servants, and the opposition.

We also need to continue to find better ways to link up the latest academic research with the policy development process. There is understandable nervousness on both sides of that relationship, but there is huge untapped potential within our universities to better inform all areas of policy.

Citizens’ assemblies too can play a constructive role in shaping priorities and bringing forward ideas.

We can also provide voters with better information on what is being proposed by political parties, how these stack up against previous commitment and actions, and what the implications of these are.

It’s notable that in some countries, such as the Netherlands, the manifesto policies of all major parties are reviewed and costed by an independent body.

It is good to see institutions like the Institute for Fiscal Studies engaging in analysing party manifestos this time around, but might political parties be more open about the costs and benefits of their policy proposals if such detailed scrutiny was to become a more regular feature in future elections?

Of course, ultimately it remains to individual voters to scrutinise the commitments made. And the Scottish electorate won’t be easily fooled by promises that seem too good to be true.

But whatever your politics, improving the breadth and quality of the policy debate in Scotland after this election will be something that we’ll all benefit from.

Graeme Roy is professor of economics at the University of Glasgow’s Adam Smith Business School