A LEADING think tank has said it is “commendable” a new economic blueprint did not “duck” difficult conclusions over public spending in a newly independent Scotland.

The Institute for Fiscal Studies (IFS) praised the report’s emphasis on increasing productivity, labour force participation and the size of the working-age population, as well as “sensible suggestions” on immigration, and concluded it was “an important contribution to the debate” on Scottish independence.

But it warned financial challenges such as those arising from an ageing population and weak productivity growth would continue to be an issue in the early days of the new state.

It said: “Last month, the SNP’s Sustainable Growth Commission published proposals for how an independent Scotland could tackle these sorts of issues.

“Commendably, rather than duck the issue, the commission accepted that the public finance picture would be even more challenging in the first decade of independence – and set out a plan to significantly reduce the budget deficit an independent Scotland would likely start life with.

“This observation looks at these plans. It finds that they imply at least another decade of the sort of restraint on public spending that Scotland is currently experiencing. If current policy is austerity, then austerity would continue under the commission’s proposals.”

The commission’s recommendations include cutting the country’s deficit from an “anticipated starting point” of 5.9% at the time of independence to less than 3%. by the end of the first decade.

IFS said: “Their proposals imply another decade of the sort of restraint on public spending that Scotland is currently experiencing. If this is austerity, then austerity would be extended under the commission’s proposals.”

It continued: “The commission claims their proposals do not amount to austerity as public spending would be increasing in real terms. But their plans would mean spending on public services and benefits falling by 4% of GDP over the course of a decade.

“That’s on top of the reductions delivered and planned by the UK government for the decade from 2010 to 2020, and the commission’s proposals for immediate cuts to defence and other spending currently undertaken by the UK government.

“The ageing of the population – which adds to pressures on the health, social care and state pension budgets – means that keeping to an overall spending increase of just 0.5% a year would likely require cuts to many other public services.”

The analysis said it was “inconsistent” to claim the plans do not amount to austerity while the UK government’s current policy does.

The report has sparked a debate over the economics of independence, with figures on the left of the Yes movement critical of its conclusions.

But First Minister Nicola Sturgeon has defended its findings saying they set out alternatives to Westminster’s “austerity” and “Brexit spiral”.

Among its recommendations were for an independent Scotland to keep the pound, but without a formal currency union. The report argued that under independence Scotland could match the economic performance of the world’s 12 most successful small nations. The SNP will discuss the report in meetings this summer.