Review group urges radical reform of Scotland’s budget process

7 Jul 17

The group set up to review Scotland’s budget process has urged radical reform to reflect that increased proportions of money will now be raised in the country.

In the Budget Process Review Group’s final report it said the Scottish Parliament should have greater influence on the government’s budget proposals, transparency should be improved and new fiscal and policy challenges should be responded to effectively. 

From 2017-18 approximately 40% of the money which the Scottish Government spends would come from taxation raised in Scotland, the report pointed out, with further taxes due to be devolved.

Control over some £2.8bn of social security is also to be handed over to the Scottish Government.

New fiscal powers are being handed to Holyrood through 2012 and 2016 Scotland Acts, which will give the Scottish Government full control of Income tax from 2017.

Dame Sue Bruce, member of the review group, on the release of the report at the end of last month, said: “By necessity, the new financial powers and fiscal framework require a substantial change to Scotland’s budget process, and that’s what our report maps out.”

Scrutiny at the moment took a ‘short-term’ approach, she said, “with an over-emphasis on ‘winners and losers’ year on year”.

Caroline Gardner, auditor general for Scotland, and fellow group member, said: “Parliament’s extensive new financial powers reinforce the pressing need for scrutiny to become more focused on outputs and outcomes, with an emphasis on what budgets have achieved or aim to achieve.”

The report said the current process took insufficient account of the interaction of the UK and Scottish budget timetables and “parliamentary influence on the formulation of the budget has been limited”.

The group called for a ‘full year approach’ under which parliamentary committees could incorporate budget scrutiny into their work prior to firm and detailed spending proposals being made.

Budget scrutiny should be continuous, it said, and should have an emphasis on what budgets have achieved and aim to achieve over the long-term.

This scrutiny should develop a long term outlook and focus on priorities, the impact of increasing demand for public services; and the independent nature of many of the policies involved, the group said.

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