Submitting evidence to the Scottish Parliament’s Scotland Bill Committee, the Chartered Institute of Public Finance and Accountancy (CIPFA) has urged caution and suggested that the financial consequences of increasing the Scottish Government’s borrowing powers should be carefully considered.
As part of the Bill, the Scottish Government is set to be given new powers to borrow up to £2.2bn in order to finance capital expenditure. CIPFA calculates that this limit could be reached within 10 years of enactment of the legislation and in these circumstances the Scottish Government could end up paying more than £250m annually in interest and repayment of debt.
CIPFA also has concerns that the Bill does not contain any measures to enable the Scottish Parliament to exercise effective scrutiny over borrowing undertaken by Scottish Ministers. CIPFA recommends that a control framework should be introduced to give the Scottish Parliament increased scrutiny and to ensure transparency in relation to borrowing and capital expenditure.
Don Peebles, Policy & Technical Manager at CIPFA Scotland, said:
”We have compared the proposed powers to those which apply in relation to local authorities and identified areas where they can be strengthened. There has to be a strong effective link between investment and asset management planning, underpinned by a transparent framework which enables scrutiny of this proposed new power.”
Contact: Lindsay Machin / Tim Windle
CIPFA Press Office
t 020 7543 5645/5787
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CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. Our 14,000 members work throughout the public services, in national audit agencies, in major accountancy firms, and in other bodies where public money needs to be effectively and efficiently managed. As the world’s only professional accountancy body to specialise in public services, CIPFA’s portfolio of qualifications are the foundation for a career in public finance. They include the benchmark professional qualification for public sector accountants as well as a postgraduate diploma for people already working in leadership positions. They are taught by our in-house CIPFA Education and Training Centre as well as other places of learning around the world. We also champion high performance in public services, translating our experience and insight into clear advice and practical services. They include information and guidance, courses and conferences, property and asset management solutions, consultancy and interim people for a range of public sector clients. Globally, CIPFA shows the way in public finance by standing up for sound public financial management and good governance. We work with donors, partner governments, accountancy bodies and the public sector around the world to advance public finance and support better public services. This includes the development of local professional qualifications in African countries like Lesotho and Nigeria and in Europe in post conflict states in the Balkans.