Auditor General calls for urgent action across the public sector

An Audit Scotland report, Scotland’s public finances: preparing for the future, looks at the country’s financial situation and at how the Scottish budget is scrutinised and decided.

The Auditor General, Robert Black, said.

“The first ten years of devolution was a period of significant growth for the Scottish public sector. That picture is changing fast. There are serious financial pressures ahead and the whole of the public sector must quickly find ways of making informed decisions about competing priorities.”

The report describes the growing financial pressures caused by a smaller budget at the same time as an ageing population, the rising costs of free public services, the backlog of maintenance and repair of buildings, roads and other assets, and the extra pressures on public services as unemployment rises during the recession.

By 2013/14, the gap between planned Scottish Government spending and the money available could be between £1.2 and £2.9 billion. The Scottish Government’s budget for 2009/10 is around £30 billion.

Mr Black questioned whether the gap could be filled by the Scottish Government’s efficiency programme, which is planned to deliver two per cent annual cash savings by the end of 2010/11.

“The Scottish Government’s efficiency programme is reporting significant savings, but the reductions required over the next few years will not be met just by the two per cent efficiency savings, and difficult decisions will be needed on other ways to reduce public spending,” he said.

The report says that the Scottish public sector needs much better information that links its spending with actual service delivery, costs and performance.

Mr Black said:

“Most of the public sector needs to get much better at measuring and improving its productivity, but all too often we find that the basic information is not there.”

Mr Black said that better information would support the Scottish Parliament in scrutinising the budget.

“I welcome the progress being made by the Finance Committee to strengthen the budget scrutiny process. The Committee would be greatly helped by better information on costs, activities and service performance across most of the public sector.”

The report suggests that the Parliament’s Finance Committee and the Public Audit Committee should organise wide-ranging performance reviews of major service areas.