Tag: public spending

Spending Review: £ Billions to back Scottish jobs

UK Government’s Plan for Change delivers record settlement for Scottish Government with an extra £9.1 billion over the SR period to deliver public services

Working people across Scotland will benefit from significant investment in clean energy and innovation, creating thousands of high-skilled jobs and strengthening Scotland’s position as the home of the United Kingdom’s clean energy revolution.  

The UK Government has confirmed £8.3 billion in funding for GB Energy-Nuclear and GB Energy in Aberdeen. This is alongside an increased commitment to the Acorn Carbon Capture, Usage and Storage project, which will receive development funding.

The Spending Review, outlined yesterday, Wednesday 11 June, announces targeted investment in Scotland’s most promising sectors to grow the economy and put more money in working people’s pockets.  It delivers an extra £9.1 billion over Phase 2 of the Spending Review, through the Barnett formula.

The government also confirmed £25 million for the Inverness and Cromarty Firth Freeport.   

These investments are part of a wider package, with funding for hydrogen production projects at Cromarty and Whitelee.

Secretary of State for Scotland, Ian Murray, said:  “Putting more money in the pockets of working Scots by investing in the country’s renewal is at the heart of this Spending Review and our Plan for Change.

“The Chancellor has unleashed a new era of growth for Scotland, confirming billions of pounds of investment in clean energy – including new development funding for Acorn – creating thousands of high-skilled jobs.

“Scotland’s leading role at the heart of UK defence policy has been strengthened and there is also significant investment in our trailblazing innovation, research and development sectors.

“And the Scotland Office will work with local partners to ensure hundreds of millions of pounds of new targeted support for Scottish communities and businesses goes to projects that matter to local people. This means that the UK Government is now investing almost £1.7 billion in dozens of important growth schemes across Scotland over 10 years.

“To maximise the benefit of recent trade deals with India, US and the EU we are continuing the Brand Scotland programme to promote inward investment opportunities boosting Scottish exports of our globally celebrated products.

“And we are delivering a record real-terms funding settlement for the Scottish Government with an extra £9.1 billion over the Spending Review period through the Barnett formula. That’s more money than ever before for them to invest in Scottish public services like our NHS, police, housing and schools.

“This is a historic Spending Review for Scotland that chooses investment over decline and delivers on the promise that there would be no return to austerity.”

Investment in Scotland to strengthen UK defence  

Speaking in the House of Commons yesterday, the Chancellor reaffirmed the government’s commitment to increase defence spending to 2.6% of GDP by April 2027, backing our Armed Forces, creating British jobs in British industries, and prioritising the security of Britain when it is most needed.  

The long-term future of the Clyde is secured through an initial £250 million investment over three years which will begin a multi-decade, multi-billion pound redevelopment of HM Naval Base Clyde through the ‘Clyde 2070’ programme.   

Investing in innovation and R&D  

Scotland will also become home to the UK’s largest and most powerful supercomputer, with up to £750 million committed to its development at Edinburgh University. This world-class facility will give scientists across all UK universities access to extraordinary computer power, further strengthening Scotland’s research and innovation capability.   

The UK Government is backing Scottish industry with a share of increased UK-wide R&D spending set to grow from £20.4 billion in 2025-26 to over £22.6 billion per year by 2029-30. Scotland will also benefit from a £410 million UK-wide Local Innovation Partnerships Fund.  

Targeted support for Scottish communities   

The government is also investing £160 million over 10 years for Investment Zones in the North East of Scotland and in Glasgow City Region, and confirming £452 million over four years for City and Growth Deals across Scotland.  

A £100 million joint investment for the Falkirk and Grangemouth Growth deal with the Scottish Government (£50 million from UK Government and £50 million from Scottish Government), demonstrating the UK Government’s continued commitment to the Grangemouth industrial area.  

A new local growth fund, and investments in up to 350 deprived communities across the UK, will maintain the same cash level as in 2025-26 under the Shared Prosperity Fund. The Ministry of Housing, Communities and Local Government and the Scotland Office, will work with local partners and the Scottish Government, to ensure money goes to projects that matter to local people. This investment will help drive growth and improve communities across Scotland.  

Supporting Scottish businesses  

The National Wealth Fund (NWF) is trialling a Strategic Partnership with Glasgow City Region to provide enhanced, hands-on support to help it develop and finance long term investment opportunities. The NWF has already made its first investment in Scotland with £43.5 million in direct equity for a sustainable packaging company, which is to build its first commercial-scale manufacturing facility near Glasgow.  

Through its Nations and Regions Investment programme the British Business Bank is delivering £150 million across Scotland to break down access to finance barriers and drive economic growth.  

The settlement also allocates £0.75 million each year to champion our ‘Brand Scotland’ trade missions to promote Scotland’s goods and services on the world stage and to encourage further growth and investment.

A record settlement for Scottish public services   

The Government has been clear that local decision-making against local priorities is central to delivering growth.   

The Scottish Government will receive the largest real terms settlement since devolution began in 1998, with an average £50.9 billion per year between 2026-27 and 2028-29, enabling the Scottish Government to deliver for working people in Scotland.  This includes £2.9 billion per year on average through the operation of the Barnett formula, with £2.4 billion resource between 2026-27 and 2028-29 and £510 million capital between 2026-27 and 2029-30. 

This investment and record settlement is made possible by the ‘tough but necessary’ decisions taken in the October Budget.

Edinburgh North and Leith Labour MP Tracy Gilbert has welcomed the statement. She said: “The Comprehensive Spending Review is good for Scotland’s economy and public Services.

“After several meetings with the Secretary of States for Science, Innovation and Technology and Scotland I’m so pleased to see the announcement of funding for the new Supercomputer to be based at EdinburghUniversity.

“This major investment in Edinburgh positions us at the forefront of computing, and technological innovation, not just in the UK, but globally.”

Not unsurprisingly, the Holyrood SNP Government has a number of issues with the likely impact of the Spending Review on Scotland. Post to follow …

Spending Review: Biggest boost to social and affordable housing investment in a generation

The Chancellor is today [WEDNESDAY 11 JUNE] expected to announce the biggest boost to social and affordable housing investment in a generation. 

As part of the Spending Review Rachel Reeves is expected to confirm £39 billion for a new Affordable Homes Programme over 10 years.  This will turbocharge the Plan for Change commitment to get Britain building and deliver the 1.5 million homes this country needs. 

This investment will be significantly higher than what the previous government spent on affordable housing. The last five year 2021-26 programme was only £11.5bn, averaging £2.3bn per year. 

This means the government will be spending almost double this on affordable housing investment by the end of this Parliament (£4bn in 2029/30). 

This is the first time in living memory that the government has set out a programme that provides ten years of certainty. This provides the sector with the confidence to deliver for now and the future, making it easier for those on low incomes to access a safe, high-quality home. 

This comes on top of a ten-year social rent settlement that will set a rent policy for social housing from 2026 that enables providers to borrow and invest in new and existing homes, while also protecting social housing tenants. This ten year settlement will see rents rise at CPI+1% from 2026, alongside a consultation to follow shortly on how to implement social rent convergence.  

It also builds on ambitious reforms to the planning system that the Government has already announced, which were judged by the OBR to add £6.8bn to the economy and boost housebuilding to its highest level in 40 years by 2029/30. 

A government spokesperson said:  “The Government is investing in Britain’s renewal, so working people are better off.

“We’re turning the tide against the unacceptable housing crisis in this country with the biggest boost to social and affordable housing investment in a generation, delivering on our Plan for Change commitment to get Britain building.” 

RACHEL REEVES: “WE ARE INVESTING IN BRITAIN’S RENEWAL”

  • Chancellor vows to ‘invest in Britain’s renewal’ as she lays out the Government’s Spending Review.
  • Reeves to announce the Government’s plans to invest in Britain’s security, health and economy to make working people better off. 
  • Billions of pounds of new capital investment will boost British business and create British jobs to kickstart economic growth and drive up living standards in line with the Plan for Change, including the biggest ever local transport investment in England’s city regions outside of London and the South East.

The Chancellor will today publish the Government’s Spending Review to ‘invest in Britain’s renewal’ as she vows to make all parts of the country better off.

Rachel Reeves will announce plans for billions of pounds of investment in projects across the United Kingdom that will create jobs, prosperity, and put more money in people’s pockets.

The Chancellor will say detailed spending plans come after the Autumn Budget and Spring Statement fixed the foundations of our economy to deliver stability, outlining: “The choices in this Spending Review are possible only because of the stability I have introduced and the choices I took in the Autumn.”

The Chancellor will confirm the Government’s commitment to delivering for every part of Britain, by announcing reforms that will guarantee towns and cities outside London and the South East can benefit from new investment. This will include the biggest ever local transport infrastructure investment in England’s city regions, which will truly connect people to opportunities that improve their quality of life, a key objective of the Government’s Plan for Change.

Ms Reeves is also expected to spell out the Government’s plans to invest in the British people’s priorities of security, health and economy.

The Spending Review comes on the back of the Government’s announcements in recent days to invest £15.6 billion in local transport projects, £86 billion to boost science and technology, and create ten thousand jobs by building Sizewell C Nuclear Power Station – which will drive forward Britain’s status as a clean energy superpower, as outlined in the Plan for Change. 

Speaking in the House of Commons, the Chancellor is expected to say: “This Government is renewing Britain. But I know too many people in too many parts of the country are yet to feel it. 

“This Government’s task – my task – and the purpose of this Spending Review – is to change that. To ensure that renewal is felt in people’s everyday lives, their jobs, their communities. 

“So that people can see a doctor when when they need one. Know that they are secure at work. And feel safe on their local high street.

“The priorities in this Spending Review are the priorities of working people. To invest in our country’s security, health and economy so working people all over our country are better off. That is what this Spending Review will deliver.”

She will add: “I have made my choices. In place of chaos, I choose stability. In place of decline, I choose investment. In place of retreat, I choose national renewal. 

“These are my choices. These are this Government’s choices. These are the British people’s choices.”

Audit Scotland: NHS governance must be strengthened

NHS Scotland’s governance arrangements need to be strengthened to deliver the scale of reform needed across the health service.

NHS Scotland comprises 22 NHS boards, with oversight provided by the Scottish Government. A range of governance groups are in place across NHS Scotland but there are weaknesses within the scrutiny and assurance processes at the Scottish Government level. This risk could be reduced by making greater use of non-executive directors to provide more challenge.

The planning and governance of healthcare in Scotland is becoming more complex, and this limits NHS boards’ ability to drive reform. The mix of local, regional, and national partners makes decision making and accountability difficult.

A new planning framework has been introduced by the Scottish Government and new national strategies for reform are due in 2025. Dealing with this change will be challenging for boards, but it should give them more clarity and help them to work more collaboratively to deliver reform.

NHS boards use a blueprint for good governance that was produced in partnership with the Scottish Government. The blueprint has been well received but there is scope for it to be strengthened to more clearly set out how board governance should be adapted to deliver reform.

Stephen Boyle, Auditor General for Scotland, said: “The delivery of NHS services must be reformed for Scotland’s health service to remain affordable and sustainable.

“NHS Scotland’s governance arrangements are key to delivering that reform, but they need to be strengthened.

“The planning of healthcare in Scotland is becoming more complex and the Scottish
Government needs to ensure lines of accountability and decision-making are clear.”

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Tax Justice: A Matter of Life and Death

CATASTROPHIC: Tax justice or austerity-induced declines in life expectancy?

Tax Justice Scotland is seeking to promote a better conversation on tax policy. As such, the views expressed in this blog are those of the author and do not necessarily reflect the views of Tax Justice Scotland and its diverse supporters.

UK-wide austerity has caused average life expectancy to stagnate since 2012, and to decrease in the most disadvantaged areas (write GERRY McCARTNEY and DAVID WALSH) . With more UK-wide public spending cuts looming, the Scottish Government should use fairer taxation to ​combat​​ the impacts of austerity – and avoid additional cuts. 

Austerity Kills 

Since 2010, a range of austerity measures have been implemented across the UK. Although most areas of public spending have suffered to some degree, the largest cuts have been directed at social security and local government, with brief interruptions in this broad approach only seen during the pandemic.  

Our analyses show that the effects of austerity policies have been catastrophic.  

Life expectancy, which had on average increased uninterrupted across the UK since 1945 suddenly stopped improving after 2012. Even worse, for people living in the 20-30% most disadvantaged areas, life expectancy started to decline.

Let that sink in: despite medical advances, people in our least well-off households have seen their lives get shorter. 

‘Healthy life expectancy’ is also in decline, meaning that people are living for a shorter time in good health. The evidence that these dreadful health and life expectancy trends are due to austerity is now overwhelming, as summarised in our book Social Murder: austerity and life expectancy in the UK.   

Austerity continuing under Keir Starmer’s Labour 

Make no mistake: austerity is not going away.  

The UK Labour Government’s self-imposed ‘fiscal rules’, which limit public spending, are triggering a new round of spending reviews across departments, with cuts again on the cards. Ahead of the Chancellor’s Spring Statement on 26 March, we’re now seeing reports of looming cuts to social security, with those on benefits further stigmatised.  

Elsewhere, local government spending has been squeezed in real-terms per person by 18% in England (2010 to 2023/24), and 7% in Scotland (2009/10 to 2022/23). We have also just seen the ​     ​​international aid budge​t slashed to fund defence spending.  

These cuts are a choice: after all, there is no shortage of fair tax options to raise more resources at UK level. Tax Justice UK and the Patriotic Millionaires suggest over £60 billion more could be raised per year through tax reforms and the closure of tax loopholes. 

What can be done in Scotland?  

In the absence of tax justice at UK level, the Scottish Government isn’t powerless. 

It’s true that the devolution settlement dictates that it has to run a balanced budget, with the bulk of its revenues coming from the block grant, and a smaller proportion from devolved taxes.

This has meant that as budgets were squeezed in real-terms between 2010 and 2019 the Scottish Government has either had to pass on those cuts to Scottish public services, or raise taxes to protect budgets. Subsequent increases to deal with the pandemic have been eroded away​     ​.  

Positively, the Scottish Government has chosen to raise some additional tax revenues; for example, the relatively small, but progressive adjustments in the Income Tax bands and rates. However, the scale of these changes has been wholly insufficient to compensate for the cuts in the block grant up to 2020.  

Implementing a ​​more comprehensive tax justice programme in Scotland​ is therefore the obvious option to protect the health of the Scottish population from further austerity.  

Many tax options are available 

Generating more revenue from Income Tax by increasing taxes for people on higher incomes would be a fair first step, particularly given that it is likely that most Scottish high earners work in the public sector and therefore cannot move that income elsewhere (the postholder could leave, but the job – and the tax paid on the income from it – would remain in Scotland).  

But taxing earned income from employment isn’t the only way to raise more revenues to combat austerity; we must find ways to better tax wealth too.  

Changes to how property wealth is taxed are long-overdue. Right now, the Council Tax is patently unfair because it taxes poorer households more than richer households as a percentage of their income​ a​​nd property value​​​​​.

The Scottish Government has powers to make it fairer, or to replace it entirely, something that has been (unimplemented) SNP policy for many years. While the Cabinet Secretary for Finance says she’s “seeking a consensus on a local taxation system that is fairer, financially sustainable and fits a modern Scotland”, we’ve heard similar promises too many times to count. 

Wealth takes many forms – including ownership of land, shares and savings, as well as pensions, and other assets. Devolved powers to better tax all of these forms of wealth are limited, but options like a land tax, perhaps administered locally, could be considered. Doing so would not only raise more revenues to fund services but also ​combat​​ the damaging impact of wealth inequality on the economy.​

Wealth ​​i​​​​nequality fuels other inequalities, like those related to gender and ​​ethnicity​​​​. But most importantly, a growing wealth gap between those who have wealth and those who don’t – locks some of us into a life of precarity and poverty, and others into one of privilege and opportunity.

This not only concentrates advantage, opportunity and power in fewer hands, but also limits social mobility for the majority, undermines the social contract, and can ultimately threaten social cohesion and democratic politics​​​.​​​     ​ 

With a recent report for the STUC indicating that a combination of tax justice reforms in Scotland could raise an additional £3.7bn per year, we must see faster progress.   

Reject austerity and deliver tax justice 

So, in the absence of action at UK level, if the Scottish Government really wants to protect the health of the Scottish population, fighting back against austerity will be necessary. The only real option in the current context is to increase taxes in a fair way so that the rich pay more.  

Tax justice for Scotland, and the rest of the UK, really is a matter of life and death. 

This blog was written by Gerry McCartney, Professor of Wellbeing Economy, University of Glasgow and David Walsh, Senior Lecturer in Health Inequalities, University of Glasgow.

David and Gerry’s book, Social Murder: austerity and life expectancy in the UK, is available now from https://policy.bristoluniversitypress.co.uk/social-murder

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Fraser of Allander: Scotland’s Budget

Budget Deals, Budget Revisions, and Budget Pressures

There was a lot of focus this week on the Budget deal struck by the Scottish Government, which will allow the Budget to be supported by the Scottish Green Party and the Scottish Liberal Democrats (write Fraser of Allander Institute’s MAIRI SPOWAGE and SANJAM SURI).

In early January, Anas Sarwar announced that Scottish Labour would abstain on the Budget as the Scottish Government were likely to secure support from the budget from one or other of these parties. Of course, this meant that the Scottish Government did not need to secure support from other parties to ensure that the budget would pass.

However, no doubt John Swinney will be pleased that he can demonstrate working across the chamber, and particularly constitutional boundaries, to come to a deal.

On the face of it, the price paid for the support of these parties seems pretty cheap (in the scheme of the SG Budget!), totalling £16.7m.

With the Scottish Liberal Democrats (TOTAL £7.7m):

  • Increase Drugs and Neonatal Service Investment. +£2.5m
  • Strengthen support for Hospices. Increase the funding from £4m to £5m. +£1m
  • Invest in targeted support for the College sector. +£3.5m in creating an Offshore Wind Skills Programme and College Care Skill Programme.
  • Support the continuation of Corseford College. + 0.7m
  • Offer flexibility to Orkney Island Council in terms of capital and resource funding.

With the Scottish Greens (~£9m):

  • Establish a £2 bus fare cap pilot in a regional transport partnership area. +£3m in 25-26 (£10m in total)
  • Increase Nature Restoration funding. increase from £23 million to £26 million. +£3m
  • Extend free school meal eligibility in S1-S3 in 8 local authority areas – covering pupils in an urban, rural, semi-urban and island authorities in receipt of Scottish Child Payment. +£3m (although it looks like most costs will fall in 2026/27, so not sure about the exact cost in 2025-26)

The Scottish Government say that this will be funded by another draw down from the Scotwind fund (more on Scotwind below) of £3 million to support the capital spending on nature restoration, and the remaining amendments are funded through debt servicing costs which they expect will be lower than they expected at the Draft Budget in early December.

The Spring Budget Revision changes the picture for 2024-25 considerably

Getting less coverage this week is the Spring Budget Revision, which was laid before parliament on Thursday. This is a pretty technical document, with the “supporting notes” document running to 146 pages. This is for the current year, and now reflects the additional Barnett consequentials which were announced through the UK Budget for 2024-25

[By way of background, these revisions happen twice a year, once in the Autumn and once in the Spring, to update the parliament to changes in the funding positions for the current fiscal year. The Budget bill will normally be passed by late February. The ABR comes in roughly Oct/Nov, then the Spring one in Jan/Feb]

The Government did not include any of these announcements in the baseline comparisons for the Budget in December. When asked about the uplifts for 2024-25 in the wake of the UK Budget, they said that the £1.4bn extra in resource funding for 2024-25 was “in line with internal planning assumptions”. This was in the context of the clear budgetary pressures earlier in the financial year, which lead to the emergency budget announcements in September 2024.

The Scottish Fiscal Commission were not please with this, saying “This is a material limitation to information available to the Scottish Parliament for its scrutiny of the Budget and in the spending analysis we can do.”

The SBR published yesterday shows how this money has been allocated in the current year.

The highlights for us are:

  • The £338m resource borrowing that had been planned to cover for a forecast error reconciliation will not be necessary (so they had planned that borrowing into the 2024-25 budget due to this negative reconciliation from previous years, and now do not need to use it because of the funding received)
  • That the planned £424m drawdown for the Scotwind licencing fund will all now be returned (they had already announced that they would reduce this drawdown by £300m at the Budget but now they are returning all of it because of the funding received)
  • That £103m more than planned will be put into the Scotland reserve.

Two things are demonstrated by where the money has gone – first, that it does not seem credible that it was in line with “internal planning assumptions”, in the context of emergency budget measures prior to the UK Budget followed by cancelling of already planned borrowing. Second, it would have helped scrutiny for the 2025-26 Budget if this had been included in the baseline presented at the Scottish Budget, given the SFC role in assessing borrowing and use of the reserve and the role of the Finance and Public Administration Committee.

The restoration of the Scotwind fund is welcome – let’s hope now it will be exclusively committed to capital/infrastructure spending to support the energy transition. It would be good if this could be formally done so the money cannot be used in this way in the future.

Employer NICs likely to cause more budget pressures

We’ve covered the impacts that the employer NICS rises could cause to public services in Scotland.

As a reminder, the Chancellor increased both the rate of employer NICS (from 13.8% to 15%) and lowered the threshold at which employers have to start paying NICS (from £9,100 to £5,000). At the time of the Budget, the Treasury said that public sector employers will be compensated – but no amounts were confirmed, which caused the Scottish Government to (quite rightly) raise concerns about the uncertainty that this would cause.

We’ve heard from the Scottish Government that the expected impact is expected to
range anywhere between £550m (for public sector workers), and £750m (including indirect employees such as childcare, higher education, social care).  We estimated around £500 for the direct public sector. The rumoured amount on the table from the Treasury is £280-300m. Our blog explains the reasons behind these different amounts.

[But, in short, the difference between the SG and the Treasury is what “compensating” the public sector means – the actual cost, or the actual cost if the size and pay bill of the public sector in Scotland was proportionately the same as the UK.]

Whatever the final amount, it is unlikely the whole cost to the public sector will be covered. We said at the time of the Budget that the Scottish Government hadn’t budgeted for this likely shortfall.

Kate Forbes said this week that the public sector in Scotland will have to “absorb” the shortfall- which basically means that the public sector would have to find savings or efficiencies elsewhere to absorb the budgetary impacts of higher NICS.

The confirmation of the compensation will not come until the Supplementary Estimates are published (which might be as late as the end of February). This means that bodies like councils, who are currently trying to set their budgets, will likely have to plan on the basis of absorbing maybe 40-70% of this additional cost until they get confirmation.

Given the scale of financial challenges councils face, this may well impact on the proposed council tax changes they have to consider.

Spending watchdog disclaims UK Government’s accounts for the first time

  • The disclaimed audit opinion from the Comptroller and Auditor General (C&AG), Gareth Davies, on the Whole of Government Accounts (WGA) 2022-23 is the first ever.
  • The cause is the severe backlogs in English local authority audits, with the consequence that there is inadequate assurance over material amounts throughout the WGA.
  • The WGA is a vital tool in the management and scrutiny of public spending, as it brings together all public sector assets and liabilities. It is essential that the steps being taken by Government to restore timely and robust local authority audited accounts are effective.  
  • The PAC Chair’s statement can be found here PAC Chair’s statement – WGA.pdf. The link to the WGA 22/23 can be found in the notes to editors. 

Backlogs in firms’ audits of England’s 426 local authorities have led to the National Audit Office (NAO) disclaiming the 2022-23 WGA for the first time.

As well as local authority accounts, the WGA combines the accounts of over 10,000 public bodies, such as central government departments, devolved administrations, the NHS, academy schools and public corporations.

Within his audit report, the NAO’s head, Gareth Davies, said he had been “unable to obtain sufficient, appropriate evidence upon which to form an opinion”.

Just over 10% (43) of England’s 426 local authorities submitted reliable data to the WGA.

Of the near 90% of local authorities that failed to submit reliable data, 46% (196) submitted information that hasn’t been audited, and 44% (187) did not submit any data at all.

The Government is taking steps to address the backlog in audited accounts for English local authorities, including the use of fixed dates by which each year’s audits must be completed.

This process is unlikely to allow the disclaimer on WGA to be removed for 2023-24, but it does offer a medium-term solution to the problem.

The WGA is a vital tool in the management and scrutiny of public spending, as it brings together all public sector assets, liabilities, income and expenditure. This means that long-term costs to the public purse such as clinical negligence and nuclear decommissioning are visible to policy makers and Parliamentarians.

Gareth Davies, head of the NAO said: “It is clearly not acceptable that delays in audited accounts for English local authorities have made it impossible for me to provide assurance on the Whole of Government Accounts for 2022-23.

“It is essential that the steps being taken by Government to restore timely and robust local authority audited accounts are effective”.

  • The disclaiming of the WGA is in relation to local authority audit omissions and unaudited returns. The impact of this impact is so large and pervasive that the Comptroller and Auditor General is unable to give any opinion on the WGA at all. The C&AG continues to provide assurance over all central government departments via their statutory departmental accounts on an annual basis, and the disclaimer of the WGA does not impact upon the opinions he gives on those accounts.
  • The 22/23 accounts can be found here: WGA_2022-23_final_accounts.pdf 
  • Page 279 includes the audit certificate from the Comptroller and Auditor General. 

Transparency needed on spending risks and plans for public services

Public services will come under further threat if the Scottish Government does not set out and deliver a clear and costed vision for public service reform, says Scotland’s spending watchdog Audit Scotland.

Spending pressures have become more acute in recent years and are forecast to grow. But ministers have continued to rely on short-term decisions to balance the books, rather than making fundamental changes to how services are delivered.

Public service reform is a key component of the Scottish Government’s approach to fiscal sustainability. But there is no evidence of large-scale change on the ground, while the Scottish Government:

  • has not yet fully established effective governance arrangements for a reform programme
  • does not know what additional funding is required to support reform
  • and has not provided enough leadership to help public sector bodies deliver change.

The Scottish Government has not been transparent enough with the Scottish Parliament or the public about the medium-term risks it is facing.

The medium-term financial strategy and financial plans for the NHS and infrastructure investment have all been delayed. The absence of these documents makes scrutiny of the current uncertain financial situation more difficult.

Stephen Boyle, Auditor General for Scotland, said: ““People do not fully understand the medium-term risks public services are facing because of a lack of transparency from the Scottish Government.

“The reality is that we need a fundamental change to how public money is spent to ensure services can meet demand and remain affordable beyond the short-term.

“To turn that into action on the ground, the Scottish Government must set out a clearer vision of what its plans for reform will achieve, including delivery milestones and the likely impact of reform on services and people.”

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Starmer: Fixing the Foundations? Or AUSTERITY 2 – the sequel?

Prime Minister Keir Starmer delivered a speech in the Downing Street garden today on fixing the foundations of our country

When I stood on the steps of Downing Street – just over there – two months ago. I promised this government would serve people like you. 

Apprentices. Teachers. Nurses. Small business owners. Firefighters. Those serving our community and our country every day. 

I promised that we would get a grip on the problems we face. And that we would be judged by our actions, not by our words. 

I said before the election – and I say it again really clearly today: Growth.

And, frankly, by that I do mean wealth creation…

[Please note political content redacted here.]

is the number one priority of this government.

That’s why, in our first few weeks, we set up the National Wealth Fund –

because we want every person and every community to benefit. 

It’s why we’ve unlocked planning decisions –

Because we are going to build 1.5 million new homes. 

It’s why we’ve set up Great British Energy – 

To create good jobs and cut people’s bills. 

And it’s why we ended the national strikes that have crippled our country for years. 

Because I defy anyone to tell me that you can grow the economy…

when people can’t get to work – because the transport system is broken.

Or can’t return to work – because they’re stuck on an NHS waiting list.

[Please note political content redacted here.]

And these are just the first steps towards the change that people voted for. 

The change I’m determined to deliver. 

But before the election I also gave a warning.

I said change would not happen overnight. 

When there is deep rot in the heart of a structure, you can’t just cover it up.

You can’t tinker with it or rely on quick fixes. 

You have to overhaul the entire thing. 

Tackle it at root. 

Even if it’s harder work and takes more time. 

Because otherwise what happens?

The rot returns.

In all the same places.

And it spreads. 

Worse than before. 

You know that – I know that. 

That’s why this project has always been about fixing the foundations of this country. 

But I have to be honest with you. Things are worse than we ever imagined. 

In the first few weeks, we discovered a £22 billion black hole in the public finances. 

And before anyone says ‘oh this is just performative’.

Or ‘playing politics’.

Let’s remember.

The OBR did not know about this.

They didn’t know.

They wrote a letter saying they didn’t know.

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Even just last Wednesday, we found out that

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We borrowed almost £5 billion more than the OBR expected in the last three months alone.

That’s not performative – that’s fact. 

But as well as the things we’ve discovered, we’ve also seen shocking scenes across the nation. 

A mindless minority of thugs – who thought they could get away with causing chaos. 

Smashing up communities and terrifying minorities. 

Vandalising and destroying people’s property. 

Even trying to set fire to a building – with human beings inside it. 

And as if that wasn’t despicable enough. 

People displaying swastika tattoos.

Shouting racist slurs on our streets. 

Nazi salutes at the cenotaph –

The cenotaph – the very place we honour those who gave their lives for this country. 

Desecrating their memory….

Under the pretence – and it is a pretence – of ‘legitimate protest’.

Now they’re learning that crime has consequences. 

That I won’t tolerate a break down in law and order under any circumstances. 

And I will not listen to those who exploit grieving families, and disrespect local communities.

But these riots didn’t happen in a vacuum. They exposed the state of our country. Revealed a deeply unhealthy society. The cracks in our foundation laid bare – 

Weakened by a decade of division and decline.

Infected by a spiral of populism…

Which fed off cycles of failures

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Stuck in the rut of the politics of performance. 

And I saw the beginning of that downward spiral firsthand.

Back in 2011.

When riots ripped through London and across the country. 

I was then Director of Public Prosecutions. 

And when I think back to that time.

I see just how far we have fallen. 

Because responding to those riots was hard – of course it was.

But dealing with the riots this summer was much harder. 

In 2011, I didn’t doubt the courts could do what they needed to do.

This time – to be honest with you – I genuinely didn’t know.

Let me tell you this. Every day of that disorder – literally every day – we had to check the precise number of prison places we had and where those places were.

To make sure we could arrest, charge and prosecute people quickly. 

Not having enough prison places is about as fundamental a failure as you can get. 

And those people throwing rocks, torching cars, making threats.

They didn’t just know the system was broken.

They were betting on it.

Gaming it.

They thought – ‘ah, they’ll never arrest me.

And if they do, I won’t be prosecuted.

And if I am, I won’t get much of a sentence.’

They saw the cracks in our society after 14 years of populism and failure – and they exploited them. 

That’s what we have inherited.

Not just an economic black hole.

A societal black hole. 

And that’s we have to take action and do things differently.

And part of that is being honest with people – about the choices we face. And How tough this will be. And frankly – things will get worse before they get better.

I didn’t want to release prisoners early. 

I was Chief Prosecutor for five years. 

It goes against the grain of everything I’ve ever done. 

But to be blunt – if we hadn’t taken that difficult decision immediately.

We wouldn’t have been able to respond to the riots as we did. 

And if we don’t take tough action across the board. We won’t be able to fix the foundations of the country as we need. 

I didn’t want to means test the Winter Fuel Payment. But it was a choice we had to make. 

A choice to protect the most vulnerable pensioners. while doing what is necessary to repair the public finances. 

Because pensioners also rely on a functioning NHS.

Good public transport.

Strong national infrastructure. 

They want their children to be able to buy homes.

They want their grandchildren to get a good education.

So we have made that difficult decision –

To mend the public finances.

So everyone benefits in the long term –

Including pensioners. 

Now that is a difficult trade off. 

And there will be more to come. 

I won’t shy away from making unpopular decisions now…

If it’s the right thing for the country in the long term. 

That’s what a government of service means. 

This shouldn’t be a country where people fear walking down their street.

Their TVs showing cars and buildings being set on fire.

This shouldn’t be a country where the Prime Minister can’t guarantee prison places.

This shouldn’t be a country where people are paying thousands more on their mortgage. 

Or waiting months for hospital appointments they desperately need. 

Where our waters are filled with sewage.

Where parents worry that their kids won’t get the opportunities they did. 

Where nothing seems to work anymore. 

So, when I talk about the inheritance the last government left us…

The £22 billion black hole in our finances…

This isn’t about a line on a graph.

That’s about people’s lives. 

Your lives.

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This government won’t always be perfect, but I promise you this:

You will be at the heart of it…

In the forefront of our minds…

At the centre of everything we do.  

That’s why I wanted to invite you here today.

To show that decent, hard-working people who make up the backbone of this country belong here. 

This government is for you.

A garden and a building that were once used for lockdown parties…

Remember the pictures just over there? With the wine and the food.

Well this garden…

And this building…

are now back in your service.

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Those things happened precisely because the government itself lost its focus.

on the hopes and ambitions of working people. 

During those recent riots, I made huge asks…

of the police and of the criminal justice system –

People already stretched to the limit.

They knew I was making big asks of them.

And I’m not going to apologise for it.

But let me tell you this – they delivered.

They deserve our gratitude.

And that’s why I went to Southport…

To Lambeth…

To Belfast…

To thank them personally. To shake the hands of the first responders who rose up to the ask I made of them.

They deserve a government that trusts them.

Supports them.

And works with them. 

That is the sort of government we will be.

One that works with people, not does things to them. 

One that believes in hard graft, not gimmicks.

Honest about the challenges we face…

And working tirelessly to fix them. 

That is how we will always work. 

Now, next week, parliament returns. The business of politics will resume. But it won’t be business as usual.

Because we can’t go on like this anymore. Things will have to be done differently. 

We will do the hard work to root out 14 years of rot. Reverse a decade of decline. And fix the foundations. 

Between now and Christmas, we will carry on as we have started. Action not words.

We will introduce legislation and take decisions to protect taxpayers’ money.

To take on the blockers by accelerating planning. to build homes and boost growth.

We’ll move forward this autumn with harnessing the full potential of AI for growth and the public good.  

We’ll bring rail service into public ownership, putting passengers first. 

The biggest levelling up of workers’ rights in a generation to give people security, dignity and respect at work.

And Great British Energy will be owned by the taxpayer, making money for the taxpayer. Producing clean energy and creating good jobs. 

That is our focus for the rest of the year. 

But I will be honest with you. There’s a budget coming in October. and it’s going to be painful.

We have no other choice given the situation that we’re in. So those with the broadest shoulders should bear the heavier burden. And that’s why we’re cracking down on non-doms.

Those who made the mess should have to do their bit to clean it up. That’s why we’re strengthening the powers of the water regulator and backing tough fines on water companies that have let sewage flood our rivers, lakes and seas. 

But just as when I responded to the riots – I’ll have to turn to the country and make big asks of you as well.

To accept short term pain for long term good.

The difficult trade-off for the genuine solution.

And I know that after all that you’ve been through – that is a really big ask and really difficult to hear. 

That is not the position we should be in. It’s not the position I want to be in. But we have to end the politics of the easy answer that solves nothing. 

But I also know that we can get through this together. 

Because the riots didn’t just betray the sickness. They also revealed the cure.

Found not in the cynical conflict of populism. But in the coming together of a country.

The people who got together the morning after. All around the country. With their brooms, their shovels, their trowels. And cleared up their community.

They reminded us who we really are. 

I felt real pride in those people who cleaned up the streets.

Rebuilt the walls. Repaired the damage.

And I couldn’t help thinking about the obvious parallels. 

Because imagine the pride we will feel as a nation.

When, after the hard work of clearing up the mess is done.

We have a country that we have built together. 

Built to last.

That belongs to every single one of us. 

And all of us have a stake in it.

Our hard work rewarded – a dozen times over. 

Because we’ll have an economy that works for everyone. 

An NHS not just back on its feet, but fit for the future. 

Streets that everyone feels safe in. 

No longer dependent on foreign dictators…because we’re producing our own clean energy right here.

And giving every child – wherever they come from. Whatever their background.The chance – to go as far as their talent will take them. 

I won’t lose sight of that prize. I won’t lose sight of what we were elected to do. 

And most importantly – I won’t lose sight of the people that we were elected to do it for. 

You.

This is our country. Let’s fix it – together.

GERS stats ‘show higher public spending for Scotland as part of UK’

The annual Government Expenditure and Revenue report underlines the collective economic strength of the UK, says Scotland Office Minister Kirsty McNeill

The collective economic strength of the UK means higher spending on public services in Scotland, according to new figures released today [14 August].

The Scottish Government’s Government Expenditure and Revenue (GERS) figures show that people in Scotland benefit from £2,417 more per head of additional spending compared to the UK average, as a result of the redistribution of wealth throughout the UK.

In 2023-24, £88.5 billion in tax receipts was raised in Scotland through devolved and reserved taxation, with £111 billion in public spending for Scotland. That works out to 8.1 per cent of UK revenue and 9.1 per cent of spending.

The figures also reveal that the ‘notional deficit’ in Scotland grew to around £22 billion, or 10.4 per cent of GDP, more than double the UK deficit of 4.5 per cent of GDP.

The UK Government is committed to retaining the Barnett Formula and funding arrangements agreed with the Scottish Government in the Fiscal Framework, which enables this higher spending for Scotland, and working in partnership with the Scottish Government to drive economic growth in Scotland.

UK Government Minister for Scotland Kirsty McNeill said: “These figures underline the collective economic strength of the United Kingdom.

“By pooling and sharing resources across the UK, Scots benefit by £2,417 more per head in public spending than the UK average. That means more money for schools and hospitals, if the Scottish Parliament chooses to invest in those areas.

“Ensuring economic stability and then delivering economic growth are two of the driving missions of the UK Government. We have reset relationships with partners across the UK, and want to work closely with the Scottish Government to produce better results for people in Scotland.”

The Scottish Conservatives added: “Today’s GERS figures underline the huge benefits Scotland gains from being part of the United Kingdom.

“Every single person is almost £2,400 better off because of higher spending on Scotland’s public services.”

Better Together? The GERS figures can be found here.

NHS building plans for Scotland delayed: Briggs speaks out

Plans to reveal which new hospitals, surgeries and treatment centres will be built in Scotland have been delayed.

In a letter to Holyrood’s finance committee, Cabinet secretary for Finance and Local Government Shona Robison explained: ‘To provide as much certainty as possible to parliament and wider stakeholders of our capital investment plans, I must wait until I have confirmed capital allocations from the new UK government”.

That confirmation is not expected until late Autumn – and, given the new Labour government’s warnings about a £20 bn. ‘black hole in the UK’s finances, it’s not expected to be good news.

Lothian Conservative MSP, Miles Briggs said: “This further delay to finding out if SNP Ministers will reinstate the funding for a new Princess Alexandra Eye Pavilion is extremely disappointing. 

“We urgently need a new eye hospital to improve the delivery of ophthalmology across the South East of Scotland. 

“The decision by SNP Ministers not to reverse funding for a new hospital has been a disastrous decision and will ultimately lead to additional costs for the delivery of a new hospital.

“I will continue to lead calls for the funding for a new eye hospital. What we desperately need is to see some leadership from SNP Ministers.”