Sturgeon called '˜administrator of austerity' after £400m underspend

Almost £400 million of taxpayers money was left sitting in the bank last year instead of going on hard-pressed services, public spending watchdogs have found.

Saturday, 1st October 2016, 11:05 am
Updated Wednesday, 5th October 2016, 2:44 pm
First minister Nicola Sturgeon was slammed by critics for the underspend. Picture: Lisa Ferguson

Opponents have now dubbed the SNP leader an “administrator of austerity” after the report by Audit Scotland found the Scottish Government’s underspend increased by £45m last year.

Although the underspend of £392m can be carried forward and used this year, critics say it is money which could have been used to stave off job losses and cuts to local services which Scots suffered in 2015-16.

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Finance secretary Derek MacKay said the situation is down to the current devolved set-up which prevents ministers from ­overspending their budget. “As a consequence, we have consistently adopted a position of controlling public expenditure to ensure we live within the budget caps that apply, but remain able to carry forward some spending power resources for a future year,” he said. “This is a common and prudent strategy that has proved to be the right one over a number of years.

“This is the 11th consecutive year Audit Scotland has given the Consolidated Accounts a clean, unqualified audit and once again demonstrates our firm grip on Scotland’s public finances.”

The figures emerged in the latest audit of the Scottish Government’s consolidated accounts for 2015-16 and are set against an overall budget of £33.7 billion. Education and lifelong learning saw the biggest underspend of £196m, while the social justice, communities and pensioners’ rights portfolio came in at £163m below budget. There was a £116m overspend in health, wellbeing and sport.

Labour leader Kezia Dugdale will say in a keynote speech today that the underspend comes as the SNP cuts funding for local councils, which provide many vital local services, by 11 per cent. This compares with a reduction 5 per cent in the Scottish Government’s own budget.

Ms Dugdale is to say: “The First Minister promised voters she would be an anti-­austerity champion. Instead, she has become an administrator for austerity.

“Scottish Labour will vote against any SNP budget that passes on austerity. The way to grow our economy and give all our young people the skills they need to compete for the jobs of the future is to invest, particularly in education. The Scottish Parliament should act as a block on Tory cuts, not a conveyor belt for them.”

Scotland is also poised to lose out on £14m of European funding amid concerns that ministers did not properly follow the strict Brussels rules on how this money should be spent, the report finds.

It concerns four European Structural Fund initiatives aimed at improving things like transport links, business growth and skills. That totals around £92m, but three of them were “suspended” with the estimated loss of £14m to the Scottish Government “which it cannot now recover”.

The report does not detail which particular projects were involved. Auditors are also critical of the SNP’s botched IT system which starved thousands of farmers of crucial common agricultural policy (CAP) payments.

Tory finance spokesman Murdo Fraser said: “This is an example of SNP incompetence which will cost the taxpayer £14m.

“That’s simply not good enough, and points to a Scottish Government which is struggling to do the basics.

“Not only has it been hauled across the coals for failure to deliver CAP for farmers, now it’s being taken to task over infrastructure projects.

“Ministers need to explain urgently what they are going to do to address this, and how they will cope with Mackay’s missing millions.”

And as MSPs prepare to take on sweeping new powers over setting the rates and bands of income tax in Scotland next year, the auditors warn that more work should be done to strengthen transparency.

Auditor General Caroline Gardner said the Scottish budget is becoming “increasingly complex” and the government “has established a strong base to address the substantial changes and uncertainty affecting public finances”.

“While recent developments show the Scottish Government is heading in the right direction, there’s much still to do to ensure that the Scottish Parliament, and the public, have the information they need to fully understand and scrutinise the implementation of the new powers, especially the new tax and spending choices,” she said.