Green light for Scottish Government accounts

29 Sep 17

Scotland’s auditor general has given the Scottish Government a clean bill of health for the accounting and management of its £34bn budget in 2016-17, but warned ministers that they will need stronger controls as Holyrood’s fiscal responsibilities increase.

In her annual report on the Scottish Government’s consolidated accounts, Caroline Gardner found that performance last year continued the Scottish Government’s “good record” of financial management and reporting. 

The year ended with an £85m underspend on the £33.96bn budget, more than covering a £38m shortfall against projection in revenues from the devolved property transaction and landfill taxes. The resource budget was underspent by £28m and the capital budget by £57m.

But Gardner stepped up previous warnings that greater powers would require better controls.

“The arrival of substantial new financial powers and potential changes arising from Brexit mean it is critical that [the Scottish Government] continues to strengthen its approach to public financial management and reporting,” she said.

Gardner has suggested a number of future reforms, notably a much more expansive set of consolidated accounts that cover the entire public sector in Scotland and allow public scrutiny of total assets, liabilities, borrowing and investment.

She also recommended that ministers prepare a five-year medium-term financial strategy setting out their future spending plans, and that they firm up policies for managing new powers over borrowing and reserves devolved to Holyrood by recent Scotland Acts. Ministers are currently reviewing their financial governance systems in readiness for the new powers.

The report also noted that the Scottish Government stands liable to repay £31m to the EU Commission for project underspends under the now-completed Structural Funds programme, and that it overpaid project sponsors a further £16m which it may not be able to recover.

  • Keith Aitken
    Keith Aitken

    covers Scottish affairs for Public Finance from Edinburgh. He was formerly economics editor and chief leader writer on The Scotsman and now has a busy freelance career as a writer, broadcaster and event chair.

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