Call Over Public Finance Reporting

The case for comprehensive and transparent reporting of public finances in Scotland has never been stronger, according to a new report from the public spending watchdog.

Audit Scotland has published an update on the Scottish Government's progress to develop its financial reporting ahead of new devolved taxes and borrowing powers coming into force in April.

Further powers will also come to Holyrood as a result of the Smith Commission, which has recommended that the Scottish Parliament should look to expand and strengthen the independent scrutiny of public finances.

Auditors found that the Government has a good record of financial management and has continued to improve and develop its financial reporting framework since Audit Scotland's last report in the area in July 2013.

In 2014 the Scottish Government set up an independent body, the Scottish Fiscal Commission, to scrutinise and report on tax forecasts included in its draft budget for 2015/16.

It intends to establish the commission on a statutory basis by bringing forward legislation in 2015/16.

The Government has previously indicated the commission could perform a broader role similar to that of the Office for Budget Responsibility (OBR), which provides independent tax forecasts for the UK Government.

Caroline Gardner, Auditor General for Scotland, said: Scotland's public finances are on the cusp of significant change, at a time when services are facing considerable pressures from falling budgets and increasing demand.

A transparent financial reporting framework to support these changes is more important than ever to safeguard public confidence and ensure accountability.

This position was echoed by the Smith Commission in its recommendation that the Scottish Parliament should expand and strengthen independent financial scrutiny to support further devolution.

It's encouraging that the Scottish Government has recognised the benefits of having a full picture of the public sector's financial position and we welcome their efforts to build upon good practice to continue developing their financial reporting.

The next step for the Scottish Government should be setting out details of how it proposes to improve and enhance its financial reporting.''

Holyrood's Public Audit Committee convener Paul Martin said: This report confirms that the accountability role of the Scottish Parliament needs to keep pace with further devolution of powers.

The committee is currently asking for views on the Parliament's scrutiny role in relation to further devolution but we will want to explore with the Auditor General for Scotland how the Scottish Government is ensuring that the financial information it provides is comprehensive, reliable and open to proper parliamentary scrutiny.''

A Scottish Government spokesman said: We welcome the Auditor General's acknowledgement that the Scottish Government, and the Scottish public sector generally, have a good track record in financial management and reporting, and a strong platform from which further development can take place.

The Scottish Government is committed to maintaining the highest standards of financial reporting.

This update paper explains the programme of work that is in progress, working with the Scottish Parliament, to implement the financial provisions in the Scotland Act, with initial steps already reflected in the financial information produced for the financial year 2015-16.

As the report highlights, the Deputy First Minister has asked officials to develop proposals to improve and enhance financial reporting.

This will include consideration of consolidated public accounts and, as is proper, the SG will consult with the Parliament before proceeding.

The Scottish Government produces a range of information on public-sector finances, including Government Expenditure and Revenue Scotland (GERS), published 11 March.

This estimates the amount of revenue raised in Scotland and expenditure for the good of the people of Scotland.

This publication produces figures which are designed to be comparable to the UK Public Sector Finances.

Quarterly Revenue estimates are also included in the Quarterly National Accounts Scotland (QNAS) publication.''