Scrutiny fears over most important Holyrood budget yet
SCOTLAND’S most important budget since devolution could receive the least scrutiny of any to date because of Westminster’s timetable, it has emerged. The budget will include unprecedented tax, spending and welfare decisions, but Holyrood may have just a few weeks to examine the 2017-18 budget instead of the usual five months.
Westminster-generated forecasts on UK and Scottish tax receipts and social security spending, which had not previously been a factor, are being blamed for the delay, along with calculations on how much the block grant from Westminster should be cut to reflect income from new tax-raising powers. This data usually arrives with the Chancellor’s autumn statement.
The massively shortened timetable was revealed by Scottish Finance Secretary Derek Mackay in a meeting with MSPs that went unreported during the turmoil over Brexit. He said Scotland was in “an uncomfortable place” as a result of being “highly dependent” on the Westminster forecasts.
Mackay also revealed he had scrapped a three-year spending review promised for the autumn, which would have set out the SNP’s spending plans up to 2020.
The Scottish budget is usually published in draft form each September or October, giving MSPs months to study its implications and inform a budget bill issued in January.
However, the draft budget for 2017-18 may not be published until the New Year, leaving barely three weeks before the budget bill deadline, which next year is January 24. The bill must then complete its three parliamentary stages by February 14, allowing councils and health boards to set their own budgets by March and June respectively.
The timetable problems flow from the new powers over tax and welfare being devolved next April, which will give Holyrood control around 40 per cent of its tax income.
Mackay said these added “complexity and some uncertainty” to the budget, because they and the block grant estimates rely on the Westminster forecasts.
He said the data arrives in November or December in the Chancellor’s autumn statement, and it would, therefore, be best to “hold over” Scotland’s draft budget until they were published.
At Holyrood’s Finance Committee on June 29, Mackay said the autumn statement would see a “significant shift” in UK tax and spending plans because of Brexit, and it could take Scottish civil servants three weeks to reflect this in Scotland’s draft budget. Asked by Tory MSP Adam Tomkins
I would like the Scottish Government to get their finger out so the Parliament committees can analyse it
if that might delay publication to the New Year, Mackay said that “might be right”, adding: “The currently agreed process… just does not fit with what we seriously rely on in designing a credible budget.”
Asking MSPs to “co-design” a new process with him, Mackay suggested Holyrood committees might need to “sit more often” during the scrutiny period, though “it might not be too popular”.
Tory MSP Alex Johnstone, deputy convener of the finance committee, said: “We’re very concerned at the timing. I would like the Scottish Government to get their finger out so the Parliament committees can analyse it. We’re getting squeezed massively [on time].
“Perhaps in the longer term we also have to look at the way the two governments work and see what we can do to improve intergovernmental relations.”
Labour MSP James Kelly, who also sits on the committee, added: “The upcoming budget will be the most important this Parliament has ever passed, with significant new powers.
“MSPs need as much time as possible to scrutinise it to make sure the SNP Government are making the right decisions about tax and spending. It would not be appropriate to rush it through in a matter of weeks. We need to have a clearer timetable soon from Derek Mackay and that should include ample time for scrutiny.”
A Scottish Government spokeswoman said: “It is not yet clear what adjustments the UK Government might make to future public spending allocations, including to the Scottish Block settlement, and this is likely to only become clear following this year’s autumn statement.
“That is why we propose to publish the draft budget for 2017-18 towards the end of this year, as soon as possible after the Chancellor’s autumn statement. We are already working closely with the finance committee and welcome their plans for a review of the budget process.”