Auditor warns of ‘complex’ challenges as Scotland takes on new fiscal powers

28 Mar 18

The Scottish Government faces a “huge and highly complex” challenge as it prepares to take on new financial and social security powers, auditors have warned.

A report from the auditor general highlights the difficulty of recruiting staff with the appropriate financial, IT and economic skills in time to meet the demands of the new fiscal powers, which will see around half of Scottish spending raised in Scotland by 2020.

A number of new responsibilities, including £3bn in annual social security payments, are also being devolved to Holyrood.

However, the report, released today, warns that setting up a social security agency and delivering the first wave of devolved benefits by 2019 will be challenging.

It also found that the Scottish Government had not clearly estimated the cost of putting the new powers into practice or by how much it would exceed the £200m contribution of the UK government.

However, implementation of the social security powers alone is expected to cost £308m over the next four years.

In addition, the Scottish budget would be subject to greater uncertainty and volatility than it had been when the majority of Scotland’s funding had been relatively fixed in the form of a block grant from Westminster.

The new powers brought far greater budgetary risks, as well as opportunities, as a result of the greater emphasis put on the performance of the Scottish economy.

“Putting the Scottish Parliament’s new financial powers and social security responsibilities into action is a huge and highly complex piece of work,” said auditor general Caroline Gardner.

“More detailed workforce analysis and a much more transparent picture around overall costs are needed to ensure the right people and infrastructure are in place in time.

“Good early progress has been made on the government’s social security plans but they are now at a critical point.”

However, a Scottish Government spokesperson said efforts were being made to ensure the necessary skills were in place.

“Our workforce planning is geared to ensuring we have the people we need to deliver on our responsibilities now and in the future and uses a number of established mechanisms to recruit specialist skills into key areas,” they said.

“Suggestions that we have not estimated implementation costs do not recognise that these costs are only one element of a large and complex Scottish budget. All spending pressures, whether from implementation of the Scotland Acts or any other commitment, are considered when setting budgets.”

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