Ministers in £47 million EU cash blunder
The Scottish Government is facing a £47 million funding black hole over a blunder in the way EU payments were handled, the public spending watchdog has found.
Ministers will have to repay £31m over “irregularities” in the way EU funds were handled, while a further £16m of Brussels cash was wrongly paid out – much of which is unlikely to be clawed back.
The money affected is from the European Structural Funds last round covering 2007-13. SNP ministers have previously blamed a “technical issue” for the accounting problems which means they now have to repay £31m to Brussels.
In addition, about £16m was overpaid to smaller bodies around Scotland in areas including business development and social provision. Many of the bodies – like Edinburgh Business Develop- ment, Moray Firth Media and Bio Sciences KTN – no longer exist.
“It’s unclear whether the Scottish Government will fully recover these debts,” an Audit Scotland report states.
The report on the Scottish Government’s budget found it had otherwise been managed effectively last year, but must make further improvements to aid the scrutiny of public finances. The annual review of its consolidated accounts found the government had produced a sound financial report for 2016-17, reporting an £85m underspend from its £33.96 billion budget.
The Auditor General has recommended a number of measures the government can take to improve scrutiny of its tax and spending decisions.
These include the introduction of a medium-term financial strategy to outline “highlevel” financial plans for the next five years.
The government should also publish a consolidated account for the whole public sector to outline total assets, liabilities, borrowing and investments.
Finance Secretary Derek Mackay said the £85m underspend for 2016-17 was the lowest since devolution.
“These accounts show the Scottish Government has once again demonstrated we have control over our public finances and I welcome the Auditor General’s report,” he added.