02 July 2004
Scottish Finance Minister Andy Kerr is to include financial management in senior civil servants' personal performance targets in an effort to tackle underspending by the Executive and public bodies.
In a statement to the Scottish Parliament, Kerr voiced disappointment at the level of underspending, which rose to £421m for Executive departments in the past financial year. This compares with £332m for 2002/03.
He made the disclosure when he set out details of the Executive's efficient government initiative, which aims to save £500m by 2007/08 and £1bn by 2009/10 across the public sector.
The minister said targets for efficiency gains would be set for all government departments, health boards and public agencies.
However, he admitted that the Executive needed to get its own house in order first. Delays in spending were delays in improving public services, he said.
Announcing that he was taking action to ensure that future spending came closer to budget, Kerr said he had agreed with permanent secretary John Elvidge that appropriate indicators on financial management would be included in the performance targets of all senior civil servants with responsibility for budgets.
The unspent money will be redistributed among other services for use in the current financial year.
Arm's-length bodies in Scotland were responsible for additional underspending of £220m in 2002/03 — much of it unused borrowing by Scottish Water.
The Executive is now planning to use money allocated to the agency to pay off a £90m debt owed by the former Scottish Homes housing agency.
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