THE Scottish Government “responded quickly” to inflation but urgent long-term reform is needed to public services, auditors have said.
In the latest consolidated accounts for the Scottish Government, Audit Scotland said that more long term-measures are needed as “public services in their current shape are not affordable”.
They said that pressure from inflation and public sector pay settlements are having a “significant impact” on the delivery of public services.
The auditors also suggested the Government’s core IT systems may no longer be fit for purpose due to under-investment.
A total expenditure of £49.8 billion was recorded in the Government’s consolidated accounts, with an under-spend of £509 million.
Audit Scotland has said for several years reform is needed in the public sector, particularly in workforce design.
In Thursday’s report, it said there has been no progress on creating a devolved public sector account which would list all assets and liabilities north of the border.
They also stated that while the Scottish Government was quick to respond to inflation, enabling it to manage spending in line with limits set by Holyrood, this only provided short-term relief.
Auditors said this was not a “sustainable approach to dealing with long-term budget pressures”.
The report reads: “The Scottish Government must work with partners to develop a programme of public service reform, including workforce redesign, which balances the short-term financial pressures with the need for longer-term change, recognising that this may require financial investment.”
Stephen Boyle, auditor general for Scotland, said: “The Scottish Government responded quickly to the impact of inflation and other factors on the public finances.
“But most of the decisions taken were short-term and will not help manage more turbulence over the next few years.
“Public services in their current shape are not affordable.
“Ministers urgently need to develop a clear roadmap that lays out how public services will be reformed to make them financially sustainable.”
Auditors praised the fact the Scottish Government has set up a strategic commercial assets division to advise its financial interventions in the private sector.
This comes after costly interventions in companies including Ferguson Marine, Prestwick Airport and BiFab.
In response to the report, Deputy First Minister Shona Robison (above) said: “We are pleased that the Scottish Government’s accounts have been given an unqualified audit opinion for the 18th year running in the face of a profoundly challenging financial situation, caused by the pandemic, war in Ukraine, and high inflation.
“However, we recognise that more needs to be done.
"That’s why we have embarked on an ambitious programme of public service reform as part of our Medium-Term Financial Strategy, which sets out how we will do all we can within our powers to ensure public finances are on a sustainable path."
