Forecaster should ‘broaden and deepen’ spending analysis, review finds

Scotland’s independent forecaster should “broaden and deepen” its spending analysis, a review has said.

The Scottish Fiscal Commission (SFC) is tasked with assessing the Government’s tax and spending plans, as well as forecasting GDP, income from devolved taxes and spending on social security.

But a review from the Organisation for European Co-operation and Development (OECD), released on Monday, recommended the agency should expand its outlook.

“The SFC should help support a more informed debate around the trade-offs needed to ensure public finances are on a sustainable path,” the report said.

“To do this effectively, the SFC will need to broaden and deepen its spending analysis beyond social security.

“This will enable the SFC to undertake robust independent analysis of spending pressures across the budget and highlight in politically neutral terms some of the different ways in which they might be alleviated.”

The OECD, which produced a similar review in 2019, generally praised the work of the SFC, but said the fiscal situation in Scotland was “evolving”.

“The Scottish Government faces increasing budgetary pressures due to factors such as an ageing population, increasing healthcare costs, new social security measures and climate commitments,” the report said.

“Increased spending in one area often requires tightening in other areas of the Scottish Government’s budget.

“In this evolving context, the SFC plays a critical role in empowering political and public understanding of the overall fiscal challenges facing the Scottish Government in informing the debate around budget choices.”

SFC chair Professor Graeme Roy said: “I am grateful to the OECD for carrying out this review. It’s vital that we have an independent, external and international perspective on our work and on the fiscal challenges facing Scotland.

“I am delighted by OECD’s assessment of the Fiscal Commission and I look forward to reflecting on their  recommendations with the Scottish Parliament and Government.”