Auditors warn of £2.9bn spending gap for Scotland

6 Nov 09
The Scottish Government faces a spending ‘black hole’ of up to £2.9bn, an Audit Scotland report has warned
By David Scott in Edinburgh

6 November 2009

The Scottish Government faces a spending ‘black hole’ of up to £2.9bn, an Audit Scotland report has warned.

According to the watchdog, the government, Parliament and wider public sector must urgently make decisions about competing priorities and how best to spend tighter budgets.

In the report, Scotland’s public finances: preparing for the future, published on November 5, Audit Scotland said the public sector was under the greatest financial pressure since devolution ten years ago.

Auditor general Bob Black said: ‘The first ten years of devolution was a period of significant growth for the Scottish public sector.

‘The picture is changing fast. There are serious financial pressures ahead and the whole of the public sector must quickly find ways of making informed decisions about competing priorities.’

The growing financial pressures were described in the report as being caused by the budget shrinking while the population was ageing; the costs of free public services were rising; and the backlog of maintenance and repair of buildings, roads and other assets was growing.

Other factors included extra pressures on public services as unemployment rose during the recession.

The analysis disclosed that, by 2013/14, the gap between planned Scottish Government spending and the money available could be between £1.2bn and £2.9bn. The Scottish Government’s budget for 2009/10 is around £30bn.

Black questioned whether the gap could be filled by the government’s efficiency programme, which is planned to produce 2% annual savings by the end of 2010/11.

He said: ‘The Scottish Government’s efficiency programme is reporting significant savings, but the reductions required over the next few years will not be met just by the 2%.’

Difficult decisions would be needed on other ways to reduce public spending, Black stated.

The report said the Scottish public sector needed much better information, which linked its spending with actual service provision, costs and performance.

Did you enjoy this article?