New powers mean better financial planning needed for next Scottish Government

29-04-2016

Better long-term financial planning, supporting more innovative public services, will be essential as the government formed after the May election takes greater fiscal powers, CIPFA (the Chartered Institute of Public Finance and Accountancy)  claimed today.

A suite of new powers will be devolved to the incoming government, boosting revenue streams and borrowing levels. Control over income tax, VAT and setting benefits will be greatly increased.

CIPFA has set out four points that must be prioritised by the next government if it is to deliver truly modern, progressive public services for the Scottish people. These are:

  1. alignment of public services
  2. a citizen-centred approach to public services
  3. financial planning to meet outcomes
  4. improved financial information for the people.

Don Peebles, Head of Devolved Government, CIPFA, said:

“The opportunity to use new fiscal powers to drive ingenuity in public services will be significant. But there will be challenges with further austerity and increased demand for public services as the population ages. The Scottish government has real power to tackle the great social challenges of this generation and rigorous long-term financial planning will be key. We must see monitoring of income revenues, expenditure forecasts and the consequences of adjustments to block grant funding being managed. Our four principles are the building blocks that the next Scottish government will need.”

Long-term affordability and sustainability is reliant upon alignment of public services between traditionally siloed public bodies. This means better collaboration and more transparent sharing of information (and resources).

The pressures of increasing service demand and the need for further service efficiencies is driving the need for a more joined up, citizen-centred approach to public services. This means traditional service structures must in future become secondary to the needs of the public.

Furthermore, national-level policy developments needs to be better aligned with service planning at the local level. Financial planning must be developed to meet outcomes. The current budget process is reliant on an incremental system of budget compilation, which does not support the more modern outcomes-based approach.

Finally, over the course of the next Parliament, the levels of revenue raised and retained in Scotland will increase significantly. Scrutiny of public finances will need to be rebalanced from a focus on spending only.   As a result, there must be improved financial information, which includes revenue raised, borrowing levels, and the future long-term sustainability of the devolved government’s finances. 

For more details see CIPFA’s Our call to the new Scottish Government briefing 

For media enquiries contact the CIPFA press office on 020 7543 5830/07833 091 303  or contact E: david.stone@cipfa.org.

About CIPFA

CIPFA is one of the leading professional accountancy bodies in the UK and the only one which specialises in the public services. It is responsible for the education and training of professional accountants and for their regulation through the setting and monitoring of professional standards.

Uniquely among the professional accountancy bodies in the UK, CIPFA has responsibility for setting accounting standards for a significant part of the economy, namely local government. CIPFA’s members work (often at the most senior level) in the public service bodies, in the national audit agencies and major accountancy firms. They are respected throughout for their high technical and ethical standards and professional integrity. CIPFA also provides a range of high quality advisory, information and training and consultancy services to public service organisations. As such, CIPFA is the leading independent commentator on managing and accounting for public money.