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Accounts given clean audit for eleventh year running.
The Scottish Government continues to manage its budget resources effectively, Consolidated Accounts published today show.
Welcoming the accounts, which are the primary means of accountability and reporting in relation to the Scottish public financial resources, Finance Secretary Derek Mackay said:
"Under the current devolution settlement, the Scottish Government is not permitted to overspend its budget. As a consequence, we have consistently adopted a position of controlling public expenditure to ensure we live within the budget caps that apply, but remain able to carry forward some spending power resources for a future year. This is a common and prudent strategy that has proved to be the right one over a number of years.
"This is the eleventh consecutive year Audit Scotland has given the Consolidated Accounts a clean, unqualified audit and once again demonstrates our firm grip on Scotland's public finances. The provisional cash underspend has not changed since my statement to parliament in June, remaining at £155 million for 2015-16 and representing only 0.5% of the overall budget. Not a penny of this underspend is lost to Scotland, as we will be carrying this forward into 2016-17 to support the £100 million capital stimulus and other initiatives, which were recently announced within our Programme for Government.
"This is also the first year in which devolved taxes in respect of the Land and Building Transactions and Landfill Taxes have been managed in Scotland and the accounts indicate these taxes delivered £74 million more that initial estimates.
"We recognise that Scotland's budget process needs to evolve to take account of the complexities and opportunities associated with the new powers, notably those relating to fiscal policy. That is why I have agreed a fundamental review of the budgetary process to ensure we develop a process that balances the time required for proportionate and effective Parliamentary scrutiny with the need to ensure the information is based on the most up-to-date forecasts.
"Our continuing competence in the management of the public finances has once again been demonstrated at a time of considerable economic turbulence and on-going pressures on our finances, notably through the UK Government's continued adherence to austerity."
The Scottish Parliament budgets and HM Treasury budgets are managed on a different basis. The Consolidated Accounts report against the budget approved by the Scottish Parliament. The Scottish Government's spending plans, however, are limited by the budget controls set by HM Treasury, with fiscal DEL (the cash resource and capital budgets) the key control for spending on goods and public services.
The 2015-16 Consolidated Accounts cover over 90% of spending approved by the Scottish Parliament each year. The accounts show a total underspend of £392 million against the £34 billion budget, representing 1.2%.
Against the Scottish Budget (in HM Treasury terms), the 2015-16 total cash underspend has not changed since the position reported by the Cabinet Secretary for Finance and the Constitution to the Scottish Parliament on the 2015-16 Provisional Outturn position in June. A total of £155 million, representing only 0.5% of the total cash budget is carried forward in full to 2016-17 and is supporting the Government's spending plans. The remainder of the underspend is non-cash and does not affect the Scottish Parliament's spending power or represent a missed opportunity to fund public services, as HM Treasury rules mean that these resources cannot be used for spending on cash goods and services. This non-cash element simply provides budgetary cover to meet differences in accounting estimates in areas such as the depreciation of fixed assets.
From the 2012 Scotland Act, 2015-16 is the first year devolved taxes have been collected for Land and Buildings Transactions Tax (LBTT) and Scottish Landfill Tax (SLfT). £572 million has been collected, £74 million above initial draft budget forecasts.
The consolidated accounts can be viewed a http://www.gov.scot/Publications/2016/09/8846