Audit Scotland report

Unspent Covid funds ‘could help hard hit firms’

shop closed in Covid
Firms were helped during lockdown, but money remains in the fund (pic: Terry Murden)

Businesses are asking for unspent funds from the Covid-19 support programmes to be used to help firms struggling with the current rises in energy costs and taxes.

A new new joint report from Audit Scotland and the Accounts Commission found the Scottish Government worked with a number of public bodies to direct billions of Covid-19 funding in difficult circumstances.

However, “they were not prepared for the scale or speed of the response required”, says the report, and there was some confusion over funding decisions.

The Scottish Government “managed its budget effectively over the last two years, but some Covid-19 funding remains unspent,” it said.

At the end of 2020/21 over £2 billion was added to reserves by the Scottish Government, councils and integration authorities – but it is not possible to say how much of that is from Covid-19 funding. 

Andrew McRae, Scotland policy chair for the Federation of Small Businesses, has now called for any leftover cash to be reallocated to help firms get through the current squeeze of finance.

Andrew McRae
Andrew McRae: repurposing funding could help businesses cut their bills

“Repurposed grant funding could help businesses make investments to reduce both their bills and their carbon emissions,” he said.

“Nine in ten Scottish businesses are warning their overheads are on the rise. New financial help for firms to tackle rising energy costs could help businesses that survived the covid crisis thrive in the future.”

Stephen Boyle, Auditor General for Scotland, said:  “The Scottish Government and public bodies worked well together to distribute money during the pandemic, but lessons should be learned to improve planning for any future large-scale disruptions.

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“It is vital for transparency and financial planning that the Scottish Government and other public bodies are clear about how one-off Covid-19 funding is being spent, including money in reserves.  

“More work is also needed by the Scottish Government to collect the data that will allow it to understand the difference its interventions have made and plan the country’s recovery from Covid.”  

Finance Secretary Kate Forbes said: “The COVID-19 pandemic created challenges on a scale our economy and people have faced in living memory.

“At every stage, the Scottish Government worked to safeguard lives, businesses, jobs and livelihoods, acting as quickly and efficiently as possible to support people and businesses.

Kate Forbes
Kate Forbes: worked collaboratively

“Despite the impacts of the pandemic, many of which are still being acutely felt, we worked collaboratively with all sectors of the economy to identify those most in need and then with local authorities and partners to utilise existing systems to ensure financial support was delivered swiftly and effectively.

“We also set up a number of new support streams, to make sure businesses were being paid as quickly as possible. My thanks go to all of our partners who worked with us to deliver support at pace.

“It is important to remember the severity of the pandemic and that decisions were taken at pace as we considered how best to allocate funding to support business and people through the necessary public health restrictions.

“We will now carefully consider the Audit Scotland report and engage with relevant sectors to ensure that future decision making is as informed as possible and best supports the people of Scotland.”

Scottish Labour Covid Recovery spokesperson Jackie Baillie said:  “This report lays bare the secrecy and mismanagement at the heart of this SNP government.

“Getting this lifeline funding to all those who needed it was a matter of urgency, but that shouldn’t have come at the expense of transparency.

“The SNP’s economic mismanagement has left public finances in total chaos, but even as they forge ahead to cut services to the bone we still don’t know what happened to billions of pounds of Covid money.

“Some agencies, such as Health & Social Care Partnerships are sitting on millions of pounds of unspent Covid money that should have been directed to helping people rather than swelling their coffers in reserves.

“The public deserve to know exactly what happened to these extraordinary sums of public money, so we can have confidence it reached the right people and delivered what it needed to.”



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