Implementing New Powers Causing Government 'Significant Staffing Issues'

23 March 2017, 09:16

British money

The Scottish Government could struggle to recruit the skilled staff needed to implement new financial powers, according to a report.

Audit Scotland said the scale of change required to set up and manage new responsibilities for taxes, social security and borrowing had resulted in "significant staffing implications''.

The amount of money raised in Scotland is to rise from about £4 billion before the 2012 and 2016 Scotland Acts were introduced to £22 billion by 2020.

More than half (52%) of Scotland's budget will be raised directly in Scotland, compared to just 10% in 2014/15.

Auditors noted the number of full-time equivalent Government staff reduced by 6% from 5,491 in March 2010 to 5,152 six years later.

"Successfully implementing and managing the new financial powers will require enough staff with the right knowledge and skills,'' the report said.

"Recruiting staff with the technical experience required, for example in finance and programme management, may prove difficult.''

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 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.

Caroline Gardner, Auditor General for Scotland, said: "Implementing and managing the new financial powers will transform the work of the Scottish Government on an historic scale.

"It's made some good progress by getting the foundations in place for managing the new powers but the major funding and staffing implications of the next stage of financial devolution must be planned for and managed in an open and transparent way.''

Finance Secretary Derek Mackay said: "Establishing arrangements for the transfer of financial powers is truly a transformative piece of work for Scotland and I am confident we have robust plans in place to ensure smooth delivery of the service.

"As Audit Scotland has recognised, the Scottish Government is currently well-organised to deliver substantial changes to our public finances, with good management processes in place to oversee the new functions and solid foundations for managing the new powers already exist.

"The report has set out that implementing the new social security system is 'an exceptionally wide-ranging and complex task'.

"The Scottish Government is currently working with staff to undertake new roles where appropriate, as well as recruit staff with the relevant skills, and has invested £18.5 million to implement new financial powers.''