Lack of Scottish Government staff could be hurdle to new powers

The Scottish Government could struggle to implement historic new tax and welfare powers because of a lack of staff, the public spending watchdog has warned.

Audit Scotland says it may “prove difficult” to find the key workers needed to deal with major transfer of powers as part of the post-referendum Smith Commission powers.

The amount of money raised in Scotland is to rise from about £4 billion to about £22bn by 2020 as part of the change, with more than half of the Scottish Government’s budget raised directly by Holyrood, compared to just 10 per cent in 2014/15.

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“Recruiting staff with the technical experience required, for example in finance and programme management, may prove difficult,” a report today states.

Audit Scotland said difficulties had already become apparent in recruiting to the Scottish Fiscal Commission, the body which will provide financial forecasts for Scotland.

Recruitment campaigns that ran from September to December 2016 did not fill all posts on a permanent basis, including the chief executive position, which is not expected to be filled permanently until summer 2017.

Auditors also said Scottish ministers must develop effective arrangements to manage the new powers and provide “clear, reliable and easily understandable” economic and financial information.

The Scottish Government had spent £18.5 million implementing the new financial powers at the end of 2015/16, mainly on setting up and operating the Scottish rate of income tax.

The report praised the government’s “good programme management” in place but called for a “clearer picture of potential future costs” and regular monitoring of spending, highlighting that expenditure is due to increase “significantly” over the next four years with the devolution of new social security powers.

It also recommends a “step-change” in public financial management and reporting as Scotland’s budget becomes exposed to “increased risk of volatility and uncertainty”.

This should include a medium-term financial strategy based on clear policies and principles and the government should finalise and publish its approach to borrowing and reserves, it said.

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Caroline Gardner, auditor general for Scotland, said the foundations are in place for managing the new powers but the funding and staffing implications must be “planned for and managed”.