Economy report

Auditor attacks lack of political leadership and targets

Stephen Boyle
Stephen Boyle: government needs to understand cost and affordability

Scotland’s Finance Secretary Shona Robison will today defend her Budget and the government’s economic record in the face of a new report claiming there is a lack of political leadership and clear targets.

Audit Scotland says it is not clear how different parts of the government are working together to agree funding priorities.

It says many “measures lack a target” and the government has not set out how much investment is needed to deliver its economic strategy.

“This creates a risk to financial management and public accountability,” it says.

Audit Scotland’s report takes particular issue with a failure to establish a key leadership group to help steer the National Strategy for Economic Transformation which was launched by Mr Robison’s predecessor Kate Forbes in March 2022..

“Without it, there is no dedicated route for the NSET delivery board to escalate major concerns,” says the report.

Stephen Boyle, Auditor General for Scotland, adds: “The government needs to better understand the cost and affordability of its plans so it can prioritise spending decisions. “

Audit Scotland’s concerns follow a damning report earlier this week from the Institute for Fiscal Studies which said the Budget had given a “misleading impression” of the funding available for the health service, councils, and many other services.

The IFS said the government had failed to include additional spending in its calculations which meant a number of funding proposals were over-stated.

Ms Robison will today tell MSPs during a Holyrood debate on the budget that it delivers funding “to tackle poverty and support public services in the face of a deeply challenging financial situation”

Shona Robison
Shona Robison delivering her budget in December

Business leaders are concerned by the plans to raise income tax and to impose a surtax on retailers, and believe the government has now become more, not less, hostile towards business under First Minister Humza Yousaf.

The Road Haulage Association has added its name to 16 trade groups who wrote to the Finance Secretary earlier this week urging a rethink of the tax proposal.

In a letter they said the plan contradicts the government’s New Deal for Business commitment to a more competitive and less complex business rates system.

“It also reinforces the perception that Ministers view rates more as a revenue generator and less as a means to stimulate much needed commercial investment and growth,” said the signatories.

There is continuing pressure, particularly from the hospitality sector, for the Scottish government to adopt a Westminster business rates relief measure, arguing that it would significantly ease costs.

In a statement ahead of today’s Holyrood session, Ms Robison said the draft Budget includes a £6.3 billion investment in social security, £13.2 billion for frontline health boards, and increased funding for frontline police and fire services.

The draft Budget also includes a record £14 billion for local government, including £144 million to fund a freeze in Council Tax for next year.

“I have been clear about the fiscal challenge that we face after the UK Government’s Autumn Statement delivered the worst case scenario for Scotland’s finances and failed to invest in public services,” she said.

“In these circumstances, I have presented a budget rooted in fairness and the social contract we have built with the Scottish people.

“This is a budget which puts our values into action, invests in the future, and will improve the lives of people across Scotland.

Opposition parties have joined the business community to condemn the budget for failing to support public services and the economy.

Scottish Labour Finance spokesperson Michael Marra said “17 years of SNP incompetence and chaos has left public finances in dire straits and public services at breaking point. 

“In this budget the SNP-Green government is asking Scots to pay more for less and using dodgy accounting to hide swingeing cuts.”

Commenting on the Audit Scotland report, Scottish Labour Economy spokesperson Daniel Johnson said “The SNP has built a low growth, low pay economy that has left us all poorer – and they still have no plan to fix it.

Daniel Johnson
Daniel Johnson: strategy cannot be empty promises

“This economic strategy was a missed opportunity to deliver the transformational change our economy and our country needs, and this scathing report lays bare a litany of flaws. 

“It is essential that this strategy isn’t just another set of empty promises from the SNP – the government must listen to these warnings and show the political leadership needed to deliver a stronger, fairer economy.”

The Scottish Liberal Democrats have said they will vote against the budget bill because of the government’s programme of cuts to key areas such as energy efficiency, local government and mental health.

LibDem leader Alex Cole-Hamilton said: “Our party has always approached budget negotiations in good faith. In the past, we have backed budgets in exchange for progress on issues we care about, like support for mental health and inter-island ferry services.

“We are also realistic that we will not get 100% of everything we want.

“However, on this occasion, we cannot vote for a budget that impoverishes councils and deals a hammer blow to everyone waiting for healthcare. Astonishingly, this is a budget that delivers a housing cut in the midst of a housing crisis and will starve us of the skills and green jobs needed to kickstart growth.”

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