As finance secretary in the Scottish government, John Swinney has reduced public spending more slowly than the UK as a whole – with positive results

From no compulsory redundancies among the 280,000 staff under the direct control of the Scottish government to no marketisation in the NHS (as well as free prescriptions) and the continuation of the education maintenance allowance, Scotland's divergence from Westminster appears to be increasing by the week.

While house-building in England has fallen to its lowest level since the 1920s, Scotland's supply is meeting demand under a regime that generally dictates better design standards. Equally remarkable on the social housing front, the country's local authorities are now building as many council houses annually – 1,000 – as its southern neighbour 10 times larger, following the relaxation of controls restricting borrowing.

As a senior minister with a wider portfolio than any comparable Whitehall department – chancellor, industry, energy and local government supremo rolled into one – John Swinney happily produces statistics to show how his leftish leanings have so far helped Scotland withstand the worst excesses of George Osborne's savage spending squeeze.

While Osborne began slashing last year, Swinney took a noticeably more cautious path, which has helped boost housing and other activity.

"I decided not to reduce public spending as fast as it was done in the UK," he says proudly. "What's the upshot of that? UK construction employment has fallen by about 2% over the year – construction employment in Scotland has grown by about 11%. My point is well evidenced … more people are [therefore] paying taxes, have spending power in the shops and all the rest of it, as a consequence of us taking those steps."

But payback time is finally emerging. "I've had to confront some of the consequences of that now [and am] having to reduce public spending to take account of that," Swinney confesses as he prepares an extremely tough budget this month that will finally acknowledge the reality of the Osborne axe.

For the past eight years, capital spending in Scotland has been running at around £3.5bn annually. Now he has to cut that by a third, leaving the country – as he tactfully puts it – "£1bn adrift". The seemingly unflappable Swinney displays a little uneasiness.

Officially known as cabinet secretary for finance and sustainable development in a Scottish National party (SNP) government, Swinney has two deputy ministers, covering business and energy, and local government and planning respectively.

A former strategic planner with a large Edinburgh insurer and, subsequently, a business and economic development consultant, Swinney, in his mid 40s, is proof that there is political life after leadership. He led the SNP for four years, until 2004 – replacing Alex Salmond – only to stand down for Salmond's second-coming.

As finance secretary, he is the principle link between the Scottish and UK government. He describes his relationship with the Treasury as "courteous" and "professional" and, particularly, its chief secretary – fellow Scot Danny Alexander – who he meets regularly. The ideological divide between Alexander, Liberal Democrat MP for Inverness, Nairn, Badenoch and Strathspey, and Swinney, MSP for Perthshire North – and happy to be labelled a social democrat – is profound. "I deal with him a lot," Swinney volunteers. "Sometimes we reach agreement, sometimes we can't [but] I find the political approach he's taking extraordinary given his political roots. Any time I looked at the Liberals in my political life they were the radical Highland party."

Now, he laments, they are partners in an ideologically-driven rightwing government, pursuing a deficit-reduction strategy hitting the weakest hardest – and, finally, forcing the Scottish executive to accept a cuts package against its better judgment.

Politicians and local councils across the border, in north-east England, might look in wonder at Scotland's ability so far to withstand the worst excesses of the Osborne/Alexander cutbacks – thanks, in part, to a relatively generous Westminster funding settlement of £28bn-plus a year. But Swinney undoubtedly speaks for many in England when he questions the Treasury's balance between slashing spending on the one hand and encouraging growth on the other. "The danger for the UK government, running the economy for the past 16 months, is that they've tipped the balance too hard in favour of consolidation when, with a modest realignment of capital spending, they could be motivating a higher level of growth," he insists.

Which takes us back to the limited options for capital spending available for Swinney to keep people in work and to encourage that growth. How can he maintain some demand in the Scottish economy? First, he insists, it's about jobs. "Take, for example, some of our approaches to public sector employment," he responds. "I've said it is going to fall over the course of the next few years, but I'm trying to sustain as much as I can because I think it's a contributor towards the economy ... to give an assurance to public sector workers, to give them a bit more confidence about their living standards and lifestyles, that the government will not go down the route of compulsory redundancies. You can opt to be redundant – voluntary severance – but you won't have that compulsion."

That is one of the subjects he has just been discussing with several council leaders at St Andrew's House, the administrative headquarters of the Scottish executive in Edinburgh. While Swinney cannot directly control Scotland's 32 councils – although they are in the fourth year of a centrally-influenced council tax "freeze" – he is encouraging them to follow suit. Collectively, Scottish councils have a 200,000-plus workforce and he is pleased to say one of them – the Scottish borders council – has taken his lead. "They've come to the same agreement with the trade unions … and got some flexibilities from them in exchange for the agreement. That's a sensible way forward."

Swinney rejects criticism surrounding what some see as the ultimate irony of Scottish home rule; namely, that the SNP government has centralist instincts at odds with local democracy. The SNP's plan for a national Scottish police service, abolishing eight forces in the process, is put forward as a case in point. The body representing councils, the Convention of Scottish Local Authorities, is deeply uneasy, accusing the government of riding roughshod over local democracy.

Over-centralist? "No, I don't agree with that," counters Swinney. "When we came into government in 2007 [as a minority administration initially] you had a relationship between national and local government that I would best describe as prescriptive. We pursued an approach to give local government more discretion … and in so doing we came to a 'concordat', removing many of the constraints on local authority funding."

The other contentious area is an over-enthusiasm for major road schemes – notably a big extension of the M74 motorway ploughing through the East End of Glasgow – at the expense of public transport. Similarly, plans for a new Forth Road bridge, costing £1.4bn, on which work is due to start later this year, are proving controversial, with critics arguing the money would be better spent on public transport.

That said, the Scottish government's commitment to a fully-regulated planning system – embracing a national framework for the whole country – contrasts starkly with the deregulated, market-led regime being pursued in England and now alarming groups from the National Trust to amenity societies and large councils fearful of a developer free-for-all.

Swinney's passionate advocacy of planning might be music to the ears of the National Trust. Of the Scottish system, he explains: "Essentially, it's structured around having a clear idea at national level of what is acceptable. We put that into a national planning framework – big picture stuff about what the country is going to look like, a spatial plan. It gives people a clarity – 'don't come along to this part of the country and try to build, say, a major industrial plant because it's not going to happen. Business wants certainty, whether it's a 'yes' or 'no'."

And, from Swinney's perspective, people want economic certainty. Scottish cities did not experience England's wave of urban disorder last month. Swinney finds it all unfathomable. But he adds passionately: "If I step aside from that, what am I trying to do as a government minister in Scotland? I'm trying to create a society that gives opportunity and hope to the citizens of our country and if that contributes to creating social cohesion in our communities then I think that's a job well done." He adds: "We spend a lot of our time trying to make sure that young people have the opportunity to gain access to some form of education, training and fulfilling a purpose."

But with the UK government largely determining funding, while broadly setting economic policy, it will be no easy task for Scotland to maintain a distinctly different course from a Westminster government in the years ahead.

• The Guardian's Public Services Summit Scotland is on 22 September in Edinburgh. theguardian.com/summit-scotland-2011