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The Chartered Institute of Public Finance and Accountancy (CIPFA) has today called upon the Scottish Government to seize the opportunity for fundamental change to the way it controls its finances. The call was made as part of oral evidence given to the Scottish Parliament Finance Committee’s enquiry into Scotland’s Fiscal framework. It follows a submission to the enquiry from the Institute in which CIPFA argued that it is time for the Scottish Government to update its fiscal framework so that it can support a modern and forward looking system of government in Scotland.
Speaking after the evidence session in the Scottish Parliament, Head of CIPFA Scotland, Don Peebles said:
“The rapidly changing political landscape in Scotland provides both the opportunity and the impetus to modernise Scotland’s fiscal framework and to ensure we have a system which is fit for a modern and forward looking devolved government in Scotland.
“If the Scottish Government heeds our advice then any new system will be underpinned by strong prudent principles that would ensure sustainability and affordability backed by a balance sheet that displays the real financial position of the Scottish Government.”
CIPFA submitted evidence to the Scottish Parliament Finance Committee’s enquiry into Scotland’s Fiscal framework. This submission argued that to have a sustainable framework the Government has to have the appropriate level of financial information on Scotland’s overall finances and that this can only be achieved through a balance sheet for the Scottish public sector.
For a copy of CIPFA’s submission to the Scottish Parliament please refer to its page on CIPFA’s website.
CIPFA’s evidence is focused on what the structure of the framework should look like and the mechanisms that would underpin its operation.
CIPFA also makes the following conclusions and recommendations for the Committees consideration:
The Fiscal Framework should have a legislative basis which requires the Government to set out its fiscal objectives and its policy for managing debt and raising taxes.
The overall structure of the Fiscal Framework should be consistent with the UK Government's framework and contain four elements:
Principles underpinning the fiscal policy framework of financial sustainability, affordability and prudent financial management should be explicit in the policy framework statements.
The Scottish Parliament should consider this an opportunity to develop a modernised, fit for purpose fiscal framework which includes all the necessary financial levers to deliver public financial management.