It is important to note that there are many benefits of capital expenditure especially when it comes to the same being applied in regard to infrastructure. The benefits in this case include but are not in any way limited to creation of jobs which can instead scale up the disposable incomes thus bringing about a more vibrant economy. Hence with that said, the slight dip on the capital budgets available for the Scottish government could affect the economy in one way or the other.
Though there is also a dip in other expenditure, a greater effect could largely be caused by a noose diving capital budgets because of their importance when it comes to funding long-term projects. Hence in that regard, the government of Scotland should ensure that borrowing is sustained at a certain level while taking into consideration the existing challenges in as far as converting revenue flows to capital. However, one area that must receive a mention in this scenario is Scottish water.
In a bid to enhance revenue streams for capital expenditure, a drive to privatize Scottish water is largely understandable. However, it is important to keep in mind the fact that there is a significant public interest in this matter and this might not auger well for the privatization bid. In the light of that, it can be noted that there still exists more avenues which the Scottish government can pursue so as to enhance its revenue streams which shall go a long way to fund capital projects.
Hence in that regard, the Scottish government must scout for other projects and earmark them for possible privatization in a way that will maintain the appetite of privatization while still ensuring that the public benefits through surplus funds (The Budget of Scotland, 2009).
A review of the U.S recent capital expenditure
A significant amount of capital expenditure in the recent past seems to be directed in IT support with agencies seen to be investing heavily in information technology. In my opinion, technology is increasingly becoming the driver of efficiency and hence the only way to enhance government operations is to invest significant amounts in technology. Indeed, it is noted that e-government is increasingly becoming an important component not only in the delivery of services but also in availing information to users in a cost effective and timely manner.
Though the over-reliance of technology has been regarded as a key aspect informing the loss of jobs as individuals in government become redundant, the benefits that can be reaped in terms of cost savings for the government cannot be overlooked. The cost saving component can indeed be looked at as a greater social good given that current capital expenditures shall enhance the revenue streams of the coming days and years; something which shall allow the government to make investments in capital projects for the greater good of the populace.
There are also other identified capital needs including but not I any way limited to the enhancement of the overseas agencies security posture. This is an urgent need hat needs attention in the current plan of things as there is strengthened ability of the government to critically look into the existing financing needs of foreign missions (Budget of the United States Government, 2010).
The Budget of Scotland. Sourced from
http://www.scotland.gov.uk/Publications/2009/06/18101733/0 on 29th March 2011
The Budget of the United States Government. Sourced from
http://www.gpoaccess.gov/usbudget/fy10/pdf/budget.pdf on 29th March 2011