More work needed on public finance reporting amid tax powers move, study says
The Scottish Government has taken action to strengthen the transparency of public finances but more work should be done as new tax-raising powers are introduced, the Auditor General has said.
The Scottish Government has taken action to strengthen the transparency of public finances but more work should be done as new tax-raising powers are introduced, the Auditor General has said.
Clarity over the Government's budget and spending decisions is also needed at a time of economic uncertainty caused by the Brexit vote, Caroline Gardner said.
In her latest report on the SNP administration's consolidated accounts for 2015/16, she said progress has been made to improve reporting of public spending.
But she also identified a number of areas for improvement to support the Scottish Parliament's scrutiny of the draft budget and new powers.
These include making it clearer what spending aims to achieve and how this contributes to the Scottish Government's overall strategy.
Ms Gardner said: "The construction and management of the Scottish budget is becoming increasingly complex and the Scottish Government has established a strong base to address the substantial changes and uncertainty affecting public finances.
"While recent developments show the Scottish Government is heading in the right direction, there's much still to do to ensure that the Scottish Parliament, and the public, have the information they need to fully understand and scrutinise the implementation of the new powers, especially the new tax and spending choices."
The consolidated accounts cover about 90% of the spending approved by Holyrood.
The Audit Scotland report found total spending in 2015/16 was £33,308 million, £392 million less than budgeted. The resource budget was underspent by £357 million and capital by £35 million.
Ms Gardner gave an unqualified independent audit opinion on the accounts.
She highlighted the "continuing risks" in the delivery of the Common Agricultural Policy Futures Programme, established to implement reforms and deliver financial support to farmers and rural businesses.
Her report also underlined the need to ensure management of European Structural Funds - which provide financial assistance in areas such as transport links and business growth - comply fully with European Commission requirements.
During 2015/16, three of the four programmes managed by the Scottish Government were suspended by the commission.
While the Scottish Government has taken action to have the suspensions lifted, the accounts show it may not be able to recover an estimated £14 million in grant funding.
Responding to the report, Finance Secretary Derek Mackay said: "This is the 11th consecutive year Audit Scotland has given the consolidated accounts a clean, unqualified audit and once again demonstrates our firm grip on Scotland's public finances.
"We recognise that Scotland's budget process needs to evolve to take account of the complexities and opportunities associated with the new powers, notably those relating to fiscal policy.
"That is why I have agreed a fundamental review of the budgetary process to ensure we develop a process that balances the time required for proportionate and effective parliamentary scrutiny with the need to ensure the information is based on the most up-to-date forecasts."
Underspend will be taken forward into 2016/17, Mr Mackay said.