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5 June 2014, 05:00
Public bodies must focus more on priorities and improve long-term planning as finances remain tight, spending watchdogs have warned.
While the public sector has so far 'coped well' with spending cuts, a new report from the Auditor General for Scotland and the Accounts Commission warned bodies such as councils and the NHS will continue to face significant challenges.
They warned: "Irrespective of the outcome of the 2014 referendum on Scottish independence, pressures on finances will remain.
"Those leading and managing public services will face increasingly difficult choices about how to spend the money that is available.''
The amount of cash the Scottish Government has control over in its budget has fallen by 9% in real terms, from a peak of £31.9 billion in 2009/10 to £28.9 billion in 2014/15, and is 'expected to reduce further', the report said.
It added: "Public bodies have coped well so far but face increasingly difficult choices in reducing spending while maintaining service standards and meeting rising demand.''
As the public sector continues to face significant financial challenges, the report urged public bodies to "focus more on their priorities, making clearer connections between planned spending and the delivery of outcomes''.
It also said there was "limited evidence of longer-term financial planning'' with more work needed to "develop and regularly review long-term financial strategies, that reflect priorities, risks and liabilities and the implications for affordability''.
Auditor General for Scotland Caroline Gardner said: "With further pressures expected and the demand for services increasing, public bodies need to look again at how they set budgets and focus on their priorities.
"There is a clear need for effective longer-term financial plans which identify potential risks and to ensure spending decisions are affordable.''
Accounts Commission chair Douglas Sinclair said: "Public bodies cannot afford to take a short-term approach to spending if they are going to protect services.
"It's crucial that councillors, and others who approve budgets, get the information they need to make informed decisions about how best to use the money that is available.''