Scottish Government faces devolution challenges, says watchdog

24 Mar 17

The Scottish Government faces major funding and staffing challenges in the next stage of financial devolution, Audit Scotland has warned.

Holyrood may struggle to hire enough people with the right skills as it prepares to take on "game-changing" financial powers, the Scottish public spending watchdog said in a report released yesterday.

An estimated £22bn will be raised in Scotland by 2020 – up five-fold from the £4bn raised before the 2012 and 2016 Scotland Act, Managing new financial powers points out.

The study noted the progress made by the Scottish Government in updating its structures for overseeing the new powers but stressed it needed to develop plans on how it will address the challenges of greater financial control.

It is estimated 52% of Scotland’s budget will be raised north of the border by 2020, compared to just 10% in 2014/15.

The report stated the government was “well-organised to deliver game-changing new tax and spending powers, but more work is needed to build a clearer picture of what the changes will cost and how staffing challenges will be addressed in the next stage of financial devolution”.

Caroline Gardner, auditor general for Scotland, said: "Implementing and managing the new financial powers will transform the work of the Scottish Government on an historic scale.

"It's made some good progress by getting the foundations in place for managing the new powers but the major funding and staffing implications of the next stage of financial devolution must be planned for and managed in an open and transparent way."

Derek Mackay, Scotland’s finance secretary, said: “Establishing arrangements for the transfer of financial powers is truly a transformative piece of work for Scotland and I am confident we have robust plans in place to ensure smooth delivery of the service."

He added the Scottish Government is currently recruiting the necessary staff and they had invested £18.5m to implement the new powers.

In April 2017, the Scottish Parliament will have the power to set the rates and bands of income tax on non-savings and non-dividend income.

Half the share of VAT receipts in Scotland being assigned to the Scottish Government's budget.

It will also have power over Air Passenger Duty and Aggregates Levy.

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