The Scottish Government quickly addressed short-term financial challenges in 2022/23, but reform of the public sector is needed to deal with longer-term financial pressures.

The Scottish Government needs to work with its partners to clearly set out how the design and delivery of public services will need to change. Understanding the overall assets and liabilities within the Scottish public sector would support this. But the Scottish Government has made no progress on developing a devolved public sector account, despite this being a commitment since 2016.

South Ayrshire Council manages its money well and some services are improving, but the pace of change has been too slow.

In a new report, the Accounts Commission raises a range of concerns about South Ayrshire Council. The council must move faster to transform how it manages itself and services for local people. It must also improve the information it provides to the public about its performance.

The Commission says the council also needs to:

The Scottish Government needs to act quickly to deliver services differently. But it needs to support its workforce to manage this change, rather than simply doing more with less.

The Scottish budget and workforce numbers have grown significantly since devolution. But Scottish Government projections suggest it cannot afford to pay for public services in their current form.

In addition, pay deals agreed for 2022/23 and 2023/24 were £1.7 billion more than initially planned and these pay rises are locked into future budgets.

Derek Yule is a retired Depute Chief Executive and Director of Corporate Resources at Highland Council. He is a qualified accountant (CIPFA), who trained in the NHS and held several posts in the NHS and local government. He has been a member of several boards and working groups relative to local government at UK and Scottish level. He was awarded CIPFA Scotland Public Finance Professional of the year in 2019.

Mike Neilson is a retired career civil servant who has worked at the UK Treasury, the European Commission, and the Scottish Government, with more than 15 years as a Director. He has in-depth experience of leading public service improvement and restructuring in a range of roles in Scottish Government, including in relation to digital services, housing, homelessness and public utilities.

Angela Leitch has worked at a senior level in local authorities for over two decades and has a thorough understanding of the context within which councils continue to operate. After eight years as Chief Executive of East Lothian Council she was appointed as Chief Executive to the newly formed Public Health Scotland in November 2019 which gave her a deeper insight and experience of working of NHS in Scotland. Angela stepped down from this role in March 2023. She is Convenor of the Scottish Local Authority Remuneration Committee which will report to Ministers in November 2023.

Carol Evans has over 20 years’ experience of education, stakeholder engagement and strategic leadership, driving organisational and culture change in organisations in the private, public and third sector. She has worked at a senior level in AstraZeneca, Kellogg’s and PepsiCo and the Royal Pharmaceutical Society. She is a non-executive director of Skills Development Scotland, Food Standards Scotland, Chair of Friends of Cedarbank Charity and previously a member of other regulatory boards, committees and UK Department of Health advisory groups.

The Scottish Government no longer expects to have enough money to deliver all its planned £26 billion investment in public sector infrastructure.

Growing the economy and delivering high quality public services relies on infrastructure like roads, railways, hospitals and other buildings. But a combination of reduced capital budgets, higher costs and increased maintenance requirements have left ministers with difficult decisions to make on prioritising capital spending. This includes stopping or pausing planned projects.