The Scottish Government moved at pace with its partners to respond financially to the pandemic – but public sector leaders need to be clearer about how one-off Covid-19 funding is being spent and what impact it has had, according to a new report by public spending watchdog Audit Scotland.
The Scottish Government worked with councils, NHS boards and other public sector bodies to direct billions of Covid-19 funding in difficult circumstances. However, they were not prepared for the scale or speed of the response required and lessons need to be learned.
Spending decisions were recorded differently across government departments, and it was not always clear how data was used to inform funding allocations. Decisions were not centrally collated, making it hard to see how some financial decisions were reached. So far, there has also been limited evaluation of the difference the financial response to the pandemic has made to people’s lives.
The Scottish Government managed its budget effectively over the last two years, but some Covid-19 funding remains unspent. At the end of 2020/21 over £2 billion was added to reserves by the Scottish Government, councils and integration authorities – but it is not possible to say how much of that is from Covid-19 funding.
Stephen Boyle, Auditor General for Scotland, said: “The Scottish Government and public bodies worked well together to distribute money during the pandemic, but lessons should be learned to improve planning for any future large-scale disruptions.
“It is vital for transparency and financial planning that the Scottish Government and other public bodies are clear about how one-off Covid-19 funding is being spent, including money in reserves.
“More work is also needed by the Scottish Government to collect the data that will allow it to understand the difference its interventions have made and plan the country’s recovery from Covid.”
William Moyes, Chair of the Accounts Commission, said: “Councils played an important role in the financial response to Covid-19 because of their local knowledge and the systems they had in place to distribute money.
“Pandemic spending largely protected councils and other public bodies over the last two years. But the financial challenges they were facing pre-Covid remain, and council budgets are particularly under pressure.
“Many services relied on one-off Covid-19 funding to remain sustainable, and it’s important that there is clarity about how they will be paid for in the future.”
Evaluating the financial response to the Covid-19 pandemic – which saw the Scottish Government allocate £15.5 billion between 2020-2022 – the report highlights the significant challenges faced across the country.
The report acknowledges that despite these extraordinary difficulties:
- existing Scottish Government systems were utilised efficiently to help deliver financial support as quickly as possible, whilst developing new, streamlined processes that minimised the risk of fraud
- the Scottish Government maintained a balanced budget
- short notice UK Government funding was directed quickly by the Scottish Government to tackle the wide ranging impacts of the pandemic
- over £5 billion was allocated for health and social care to support vital services and public health infrastructure for testing and vaccinations programmes
- more than £4.7 billion was allocated to businesses in lifeline support
- local authorities were allocated £1.8 billion to fund vital general and targeted services, including £200 million to cover councils’ lost income
Finance Secretary Kate Forbes said: “The COVID-19 pandemic created challenges on a scale our economy and people have never faced in living memory. At every stage, the Scottish Government worked to safeguard lives, businesses, jobs and livelihoods, acting as quickly and efficiently as possible to support people and businesses.
“Despite the impacts of the pandemic, many of which are still being acutely felt, we worked collaboratively with all sectors of the economy to identify those most in need and then with local authorities and partners to utilise existing systems to ensure financial support was delivered swiftly and effectively.
“We also set up a number of new support streams, to make sure businesses were being paid as quickly as possible. My thanks go to all of our partners who worked with us to deliver support at pace.
“It is important to remember the severity of the pandemic and that decisions were taken at pace as we considered how best to allocate funding to support business and people through the necessary public health restrictions.
“We will now carefully consider the Audit Scotland report and engage with relevant sectors to ensure that future decision making is as informed as possible and best supports the people of Scotland.”
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