Covid-19 spending in Scotland becoming less transparent, warns auditor general

Money spent by the Scottish Government on its response to Covid-19 is becoming harder to track as Scotland comes out of the pandemic and into recovery, the auditor general has said.

In a report into the billions of Covid-19 spending in Scotland, Stephen Boyle said “difficult decisions lie ahead” for the Scottish Government in the face of “uncertainty and volatility” facing the budget.

The warning comes as Audit Scotland publish a report into Covid-19 spending on Wednesday. Scottish Government estimates have put Covid spending last year at £8.8 billion, with at least £4.9 billion to be spent by the end of the 2021/22 financial year.

The Scottish Government has been warned of a lack of transparency around Covid-19 finances.

Opposition parties said it was “unacceptable” that pandemic funds have been distributed without a proper audit trail and called for increased transparency around the government’s Covid-19 spending.

The Scottish Government said it tries to be as transparent as possible and added it was seeking clarity from the UK Government on future funding arrangements.

The report from Audit Scotland said the budget was likely to continue to get “more complex” in the recovery phase as spending “links more widely with economic development issues and other government goals”.

Transparency has suffered due to the pandemic, the report claimed, with it becoming harder for government to be fully open about spending decisions due to the fast paced nature of the emergency.

Stephen Boyle, the auditor general for Scotland, said: "As Scotland moves into the recovery phase from the pandemic, it will likely become increasingly difficult to define what is, and what isn't, Covid-19 spending.

"The Scottish Government is managing financial pressures which predate the pandemic, such as spending on health and social care.

"That means difficult decisions lie ahead and, despite the challenges, it increases the need for a medium-term plan to manage the levels of uncertainty and volatility facing the Scottish budget."

The report said the Scottish Government must adequately plan for future changes to the country’s finances due to pre-pandemic spending pledges and volatility in the country’s finances.

“With increasing pressures on public revenues and spending, and the Scottish budget subject to ever more volatility, uncertainty and complexity, it will be challenging to match spending to the available funding in the coming years,” the report said.

“This will need to be done in a way that minimises the disruption to individuals, public bodies and services, ensures value for money is maintained and avoids unintended consequences.”

Liz Smith, the Scottish Conservative finance spokesperson, said a failure of public spending being transparent would be “unacceptable” to the public.

She said: “The public will be deeply concerned by the secrecy and the lack of information on where so much funding went.

"Yet again, the SNP are blatantly attempting to dodge accountability and hide from their long-term failures.

"The SNP Government must urgently make their pandemic spending open to fair and comprehensive scrutiny, so that we can ensure Covid funding is being spent responsibly."

Scottish Labour’s finance spokesperson Daniel Johnson said the report “exposes the chaos” within the Scottish Government.

He said: “Covid has posed unique challenges for public finances, but years of mismanagement and secrecy from the SNP have piled on added pressure.

“This Audit Scotland report exposes the chaos at the heart of the Scottish Government finance, raising fresh questions about the allocation of billions of pounds of consequentials. This total lack of transparency is all too typical from the SNP, but it needs to stop.

“Nothing in the SNP’s timid Programme for Government suggests they’re prepared for the scale of the challenge set out in this report.”

Liberal Democrat finance spokesperson John Ferry said the figures demonstrated the “vast scale” of Treasury resources which supported Scottish businesses.

He said: “However, with such large sums at play we need proper safeguards in place to ensure government spending is effectively accounted for.

“Both the UK and Scottish governments have faced criticism for spending money under the guise of Covid crisis measures without a proper audit trail, with Scotland’s auditor general warning earlier this year that it is becoming harder to identify what is and isn’t Covid-19 spending.

"The lack of transparency and accountability needs to be addressed as a priority. Good governance requires it."

Responding, a Scottish Government spokesperson said “every penny” received to pay for its Covid-19 response was “spent or allocated”.

The spokesperson said: “We endeavour to be fully transparent and the finance secretary detailed to Parliament where the additional £1.15 billion in consequentials, which were confirmed too late to be utilised in the last financial year, are being spent.

"This includes extending rates relief for retail, hospitality, leisure and aviation businesses for the whole of 2021/22.

“We are pleased Audit Scotland recognises the challenge the Scottish Government faces in managing its budget without clarity on how much funding it will receive. Despite repeated requests, the UK Government has so far refused to guarantee the level of Covid-19-related Barnett consequentials this year, despite doing so in 2020/21.

“We continue to press for this certainty, along with the additional fiscal flexibilities which would enable us to drive Scotland’s pandemic recovery more effectively.”

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