Scottish independence: CIPFA aims to lift fog on figures

26 Jun 14
CIPFA Scotland’s long-awaited referendum ‘balance sheet’ will be published shortly, accompanied by a plea for more transparent reporting of Scottish public finances, regardless of the outcome of the independence vote on September 18.

By Keith Aitken in Edinburgh | 26 June 2014

CIPFA Scotland’s long-awaited referendum ‘balance sheet’ will be published shortly, accompanied by a plea for more transparent reporting of Scottish public finances, regardless of the outcome of the independence vote on September 18.

As Public Finance went to press, the 30-page paper, with the working title Scotland’s future: in the balance, is expected to offer itself to Scots with the express aim of giving them a reliable tool to help assess the increasingly sweeping financial claims and counter-claims peppering the independence debate.

Don Peebles, head of CIPFA Scotland, told PF: ‘There’s so much financial information flying around, and it must be so complex for people that I think they’re just not getting it, so what we’re trying to do is give them a “you are here” sign.

‘Once you’ve got that, then you can start to frame questions and put the answers into context.’

The Yes campaign says independence would leave Scots £1,000 a year each better off, while the No side claims they would be worse off to the tune of £1,400.

Peebles made clear his scepticism about such figures: ‘The accountants’ viewpoint is that we want to use our financial skills to think in terms of what the assets and liabilities are, rather than gallop into a conclusion about what might be statistically based figures,’ he said.

‘The information we have produced is from independently verified and audited financial statements. It seems likely that the figures that are producing single costs on whether we would be better or worse off might be based on statistics rather than audited figures.’

Such figures also made assumptions about the policy choices an independent Scotland might make, and the outcome of the negotiations to disentangle Scotland from the rest of the UK in the event of a Yes vote.

They ignored the absence of any standard or agreed formula foralculating Scotland’s share of UK assets or liabilities, or projecting future tax inflows or public expenditure.

‘What we’re definitely not going to be doing is taking one political side or the other. We don’t see it as our job to do that,’ Peebles said.

‘We’re doing it because this is frankly the biggest public finance and public services issue that most of us have ever faced in our careers. It’s not an option not to say something about it.’

Pulling the paper together has taken the best part of a year. Peebles said that Dr Ellie Ray, on secondment from the Welsh Assembly, had read hundreds of papers to find out where the relevant and reliable information was, while Gareth Davies, CIPFA Scotland’s policy and technology officer, crunched the numbers.

The paper will recommend that Scotland develops more transparent reporting systems, regardless of whether an independent or a devolved polity emerges from the referendum. ‘If, as accountants, we were asked our opinion, what we would do is ask to look at the books,’ Peebles said.

‘The problem is that Scotland doesn’t have books: whole-Scotland accounts. The UK does.

‘Much of the fog that surrounds the financial information comes because we’re so intertwined as part of the UK financial reporting framework.’

Peebles acknowledged the political risks of wading in to such a febrile political debate, but added: ‘What we want to do is to act in the public interest by recognising that much of the information is complex, and we have genuinely tried to simplify that down so that it’s easy to understand.’


This article was first published in the July/August edition of Public Finance magazine

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