Public audit in Scotland: What’s on the horizon?

We are living in incredibly busy times for the public sector in Scotland, with each passing week bringing a new political announcement or debate. With so much going on, it can be hard to think beyond the next few months.

I’ve often heard it said that audit is retrospective in nature, but in fact we spend a lot of time and energy looking ahead to understand what’s on the horizon, what it means for our future work, and what impact we want to have. And we need to make sure that our plans reflect the priorities and concerns of the public and our key stakeholders, whichever policy area we’re focused on.

Our new approach uses these principles to create a rolling five-year programme of audits, which we refresh each year. The results of our latest review are now available on our website, setting out in detail what areas of public spending and policy we plan to report on between now and 2021/22.

The programme covers all of the work that Audit Scotland will carry out over the next five years on behalf of me and my colleagues in the Accounts Commission, the local government watchdog. It’s based on consultation with a range of stakeholders; for example, as Auditor General I report to the Parliament’s Public Audit & Post-legislative Scrutiny Committee and we consulted with committee members to see how the audit risks we’d identified through our work matched what they want to see from public audit in the coming years.

As well as the audits of specific policy developments across the public sector, I’d like to highlight a couple of areas that will inevitably affect much of the public sector, and all of us who use public services in Scotland, in the long-term.

First off are the historic changes taking place in Scotland’s public finances, with new financial powers coming on stream through the Scotland Acts 2012 and 2016. We reported our latest update to MSPs last month and will continue to report on this annually. This commitment reflects the scale of the work that will be required of the Scottish Government and others to successfully implement and manage the new powers.

We’ll also continue to expand our high-profile work on Scotland’s NHS, with audits of the NHS workforce, children’s mental health services, and health and social care integration all in the pipeline.

And there’s lot more, right across the public sector, from ferry services and widening access, higher education to fire reform, digital to community justice. We’ll also continue to explore different ways of making our work accessible to everyone with an interest, building on the range of ways we already report our work.

If you’d like to know more, you can find out who to contact here.

About the author

Caroline Gardner is the Auditor General, and Accountable Officer for Audit Scotland. She started her term in July 2012, and has more than 30 years’ experience in audit, governance and financial management. Follow her on twitter @AuditorGenScot

 

Auditing historic change in Scotland’s public finances

On 1st April, the Scottish Parliament gained control of income tax rates and bands, higher borrowing limits, and the management of the Crown Estate in Scotland – and there are more new powers to come.

The Scotland Act 2016 is fundamentally changing management of the public finances and, once fully implemented, half of what is spent in Scotland will be raised here and the budget will be subject to greater uncertainty and volatility than ever before. With more control over public finances and new opportunities and risks, it’s clear that we’re entering new territory.

The scale of change needed to implement and manage the new financial powers is significant and it’s important that the Parliament and the public can see what progress is being made. As the public spending watchdog, Audit Scotland has carried out extensive work in this area.

On Thursday, I’ll join the Auditor General, Caroline Gardner, and colleagues to present the findings of our latest report on managing new financial powers to Holyrood’s Public Audit and Post-legislative Scrutiny Committee. We looked at how the Scottish Government, Revenue Scotland and the Scottish Fiscal Commission are introducing and managing the range of powers devolved through the 2012 and 2016 Scotland Acts.

We found that the Scottish Government is well-organised to deliver new tax and spending powers. It has updated its structures for overseeing the new powers and has good programme management processes in place. Revenue Scotland is also making good progress in preparing for further devolved taxes, and the transition of the Scottish Fiscal Commission to a statutory body is being managed effectively.

The new powers will substantially change the type and volume of work the Scottish Government will do. We found that the Scottish Government is identifying the staff and skills it needs, but recruiting enough people with the required skills may prove difficult. We recommend that the Scottish Government build a clearer picture of potential future costs, to help plan how it will fund implementation of the new powers within its budget.

In this changing environment, a more strategic approach to public financial management and reporting is needed. This includes a medium-term financial strategy based on clear policies and principles. The Scottish Government is taking steps to provide a more comprehensive picture of the public finances, as it’s important that the Parliament and public have the information they need to understand and scrutinise the government’s financial decisions.

MSPs will have the chance to discuss these findings in detail with us this week, and the session can be watched live on Parliament TV.

We’ll continue to report on the progress of public bodies in implementing and managing the new financial powers. If you’re interested in our work in this area, our new e-hub on financial devolution has a range of reports, exhibits, briefings and other useful tools.

About the author

Mark Taylor is an Assistant Director in Audit Scotland. He is responsible for overseeing Audit Scotland’s work relating to financial devolution and constitutional change.