Playing our part in the changing landscape of Scotland’s public finances

There’s no doubt that this is a busy and exciting time for anyone with an interest in Scotland’s political and financial landscape. Generating a lot of discussion is the Scotland Bill 2015, set to grant further financial powers to the Scottish Parliament and establish a new fiscal framework which could substantially revise its budgetary and funding arrangements. All of this is taking place while new financial powers in the Scotland Act 2012 are being implemented.

A number of Scottish and UK parliamentary committees have taken an interest in the development of new financial powers. Audit Scotland also has key role to play in this fast changing area of public finances, and we’ve been one of many public bodies asked to give views to Parliament on this important area.

We set out initial views on the audit arrangements for any new financial powers in a submission to the Public Audit Committee in August 2015, and I gave evidence on behalf of Audit Scotland to the Finance Committee’s inquiry on the Scottish Fiscal Commission Bill. The Commission plays a vital scrutiny role by providing independent assessments of forecasts of tax revenues, and its remit is likely to grow with further financial devolution.

We’ve also looked closely at how implementation of the Scotland Act 2012 has been prepared for, and managed; we first reported on progress in December 2014, and we’ve recently published a follow-up to this work, available here.

Our latest update explained how Revenue Scotland – the body responsible for the administration of the newly devolved Land and Buildings Transaction Tax and the Scottish Landfill Tax – effectively managed risks to make sure they were delivered successfully from April last year. In short, a good news story, though there’s still a lot of work ahead.

We also reported that some arrangements to manage the powers in the Act (and potentially the Scotland Bill 2015) beyond this year are still being developed, which is reasonable. However, we’ve highlighted the need for the Scottish Government to be able to move quickly once key agreements are reached, so it can be in a position to manage the new powers well and deliver financial reporting that’s comprehensive, transparent, reliable and timely.

On Wednesday (27 January), I’ll join the Auditor General and colleagues to discuss our findings with MSPs on the Scottish Parliament’s Public Audit Committee. The session will be broadcast live on Parliament TV.

MSPs will also hear from the Auditor General on other interesting new work which has seen Audit Scotland provide assurance to Parliament on an audit of the Scottish Rate of Income Tax (SRIT). We reviewed the National Audit Office’s first annual audit of HMRC’s implementation of the SRIT, which comes into force in April 2016. The Auditor General will report annually to the audit committee on the NAO’s work in this area, and it’s provided a great opportunity for us to work with another UK audit body.

Public audit provides assurance that public money is well managed. This is important for the public and decision-makers, and will become even more relevant as Scotland takes on further financial powers. For Audit Scotland, it means that the scope of our work will likely become more wide-ranging and diverse.

About the author

MarkTaylor Mark Taylor is an Assistant Director in Audit Scotland. He oversees a wide portfolio of central government audits, including the Scottish Government audit.

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