Why is the Scottish Government hoarding hundreds of millions of pounds? – Brian Wilson

Is Finance Secretary Derek Mackay saving money to fill a looming black hole in the budget? (Picture: Duncan McGlynn/Getty Images)
Is Finance Secretary Derek Mackay saving money to fill a looming black hole in the budget? (Picture: Duncan McGlynn/Getty Images)
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Despite persistent complaints about a lack of funding, the Scottish Government underspent its budget by nearly half a billion pounds and Finance Secretary Derek Mackay needs to explain why, writes Brian Wilson.

End-of-year savings used to be a great feature of the pre-devolution Scottish Office. Pots of money had to be spent. Schools and hospitals enjoyed brief spending sprees. Projects that might never have happened got a sudden kick-start.

It wasn’t perfect but at least it did some tangible good. Since devolution, the Scottish Government’s budget is capped so an “underspend” is reported which can be carried forward to subsequent years.

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This week, the Finance Secretary reported an underspend of £449 million – similar to last year – and invited laps of honour for “prudence”. It does sit a bit oddly with constant complaints about not having enough money for anything.

As recently as 2016-17, the underspend was only £84 million. Derek Mackay had a variation that year on his self-congratulatory script.

They had “lived within the budget caps that apply, while maximising spending on public services”. Surveying the current devastation of council services, strains on the NHS and the rise of foodbanks, some might think that “maximising spending on public services” should be a priority every year.

Once it became apparent in 2019 that another huge underspend was happening, would it have been impossible to pump some desperately needed money into key areas for immediate impacts? If not, explain why not.

The Scottish Fiscal Commission has warned of a “billion pound blackhole” by 2021 as fiscal devolution rolls on, producing lower tax revenues than predicted. Is this what’s been stockpiled against? We need more from Mr Mackay than glib assurances that the “underspend” money is going somewhere.

“Maximising spending on public services” is not a matter for his lofty discretion. It is an urgent necessity.