‘Worst-case scenario’ for Scots finances

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Scotland’s finances are facing a “worst-case scenario” in the coming years and public bodies may struggle to manage their budgets, according to an official report.

Audit Scotland has concluded that Scotland’s public bodies need to make significant savings this year – but there is a risk they will not achieve this due to cost pressures being greater than expected or unforeseen events.

The report found that the scale of the reductions is in line with previous worst-case forecasts. Two years ago, Audit Scotland highlighted analysis by the Centre for Public Policy for Regions (CPPR) looking at possible budget scenarios, ranging from a five per cent real-term reduction at best, to an 11 per cent reduction at worst.

Today’s report states: “It is now clear that the scale of the budget reductions facing Scotland is close to the CPPR’s worst-case scenario.”