‘Difficult decisions’ required to secure public services, auditor warns

The Scottish Government will have to take “difficult decisions” to secure a sustainable future for public services, the country’s public sector watchdog has said.

In a report about the Government’s accounts, Auditor General Stephen Boyle stressed the need for “urgency” in reforming the public sector – including cutting the workforce – to ensure services can continue to be delivered.

He also criticised the Scottish Government’s short-term thinking in making one-off savings to pay for recurring expenditure such as above-forecast public sector pay deals.

“The Scottish Government continues to respond to emerging financial pressures to balance the budget,” the report said.

“The options being applied provide short-term relief, but their one-off nature means they do not address the overall unsustainable financial position for the Scottish public sector.

“It is critical that the Scottish Government increases the pace of reforming the design and delivery of services, including the size of the public sector workforce, to make them affordable.

“There has not yet been enough progress with the reform of public services.

“Difficult decisions need to be made to secure a sustainable future for public services in Scotland.”

The Government’s consolidated accounts were released on Thursday, showing the level of expenditure for 2023-24.

According to the document, the Scottish Government underspent its near-£54 billion budget by around £277 million – £193 million in day-to-day spending and £84 million in capital – but Finance Secretary Shona Robison has said “every penny” has been allocated this year.

Expectedly, the NHS formed the highest proportion of the budget, accounting for £19.1 billion, followed by social security at £5.7 billion.

Ms Robison said: “Since this Government took office, we have consistently managed our fixed budget responsibly and I am pleased the annual accounts have been given an unqualified audit opinion for every one of those years.

“The last financial year was among the most challenging since devolution, and we have responded to higher inflation and cost-of-living pressures by making tough decisions to protect the most vulnerable in society.

“The Scottish Government cannot overspend on its budget, and in 2023-24 we left a small underspend to ensure we could manage any unexpected funding pressures. Every penny of this has been allocated for spending in 2024-25.

“We will continue to work to ensure the sustainability of Scotland’s finances as we prioritise our spending towards eradicating child poverty, growing the economy, tackling the climate emergency and improving Scotland’s public services.”

Scottish Liberal Democrat MSP Willie Rennie likened the Scottish Government’s approach to a “constant game of Whac-A-Mole”.

He added: “Ministers have made a series of expensive blunders, from the ferries scandal to selling off the seabed on the cheap.

“Scotland deserves a government that knows what it’s doing – that can invest in our public services and grow our economy for generations to come.”

Scottish Tory economy spokesman Murdo Fraser said called for an “an immediate end to short-term fixes, in favour of a common-sense approach to balancing the books”.

“That means spending taxpayers’ money on bread-and-butter issues that matter to the public, like protecting winter fuel payments for pensioners, instead of squandering it on pet projects like the unaffordable national care service,” he added.

Scottish Labour finance spokesman Michael Marra said Scottish Government policy had left “public finances in chaos, public services at breaking point, and Scots paying more in tax”.

“Scotland cannot keep paying the price for the SNP’s short-term, sticking plaster approach to government,” he said.