Finance committee ‘deeply concerned’ over Scottish Government’s approach to public finances

The Scottish Parliament’s Finance and Public Administration Committee has said it is “deeply concerned” about the Scottish Government’s strategic approach to public finances.   

Publishing its pre-budget scrutiny report, the committee warned there is “little evidence” that medium and long-term financial planning is taking place.   

In September, finance secretary Shona Robison announced up to £500m worth of cuts to public services to balance the books.   

Last month, Audit Scotland warned the Scottish Government will have to make “difficult decisions” if it is to secure the future of public services and accused it of short-term thinking.  

Robison is due to set out the Scottish Budget on 4 December.  

She told parliament in September the country is facing "enormous and growing" financial pressure, including additional costs of £800m this financial year. While she described the chancellor’s Budget as “a step in the right direction” the finance secretary said it “still leaves us facing enormous cost pressures going forward”.  

Despite making critical conclusions, the finance committee’s report does welcome recent progress on the Scottish Government’s public service reform programme, saying it is encouraged by the focus on preventative and early intervention approaches.   

It has also welcomed the commitment made by Robison to consider what more can be done to support research and development within Scotland’s universities, in terms of boosting innovation and economic growth.  

Gibson said: “Our committee is deeply concerned about the Scottish Government’s lack of strategic approach to managing Scotland’s public finances. There is little evidence of medium and long-term financial planning. Year-on-year budgeting has become increasingly challenging, with significant emergency controls being required in each of the last three years.  

“We recognise devolved governments have fewer flexibilities to deal with ‘shocks’. However, many issues impacting the 2024-25 Budget – such as higher-than-anticipated pay settlements and increasing social security payments - could have been foreseen and mitigated when the Budget was set, last December.  

“At the very least, scenario plans could have been put in place to allow spending commitments to be ‘flexed’ to adapt to fiscal strain.  

“We also believe that if key strategy documents looking beyond the year - such as the Medium-Term Financial Strategy, Infrastructure Investment Plan pipeline reset, Tax Strategy, and multi-year plans - had been published when originally committed to, they would have ensured the Scottish Government was considering the medium to longer-term approach as part of its budget planning.  

“Repeated delays to key financial strategies have led to a perception of the government being in a state of indecision.  

“Taken as a package, the recommendations in our report are designed to support the Scottish Government in achieving a much more strategic and coherent approach to managing Scotland’s finances. We urge the government to adopt these in full, placing our finances on a much more stable and sustainable footing.”