Bold action needed to achieve sustainable public finances, say Scotland’s fiscal experts
MEDIA STATEMENT - Scotland’s fiscal experts have warned that the absence of a coherent, long-term financial roadmap is hampering public sector reform efforts. Speaking at Scotland’s Fiscal Future, an event hosted by the Institute of Chartered Accountants of Scotland (ICAS), leading voices called for strategic alignment and bold decision-making to secure Scotland’s economic future.
To mark 10 years of Scotland’s devolved taxation, the event held in Edinburgh on Wednesday evening gathered prominent industry leaders to explore Scotland’s evolving economic landscape, taxation system and financial sustainability. It featured a summary of the latest Scottish economic and fiscal forecasts from the Scottish Fiscal Commission (SFC), followed by panel discussions focused on the economy, taxation, public services, reform, and growth.
David Bell, Professor of Economics at the University of Stirling, highlighted the confusion caused by navigating too many financial strategies. He said: “We need to have a long-term roadmap going forward. We've got the medium-term financial strategy, the programme for government, the national strategy for economic transformation, the national performance framework, as well as the budget. Trying to align all of these things and figure out exactly what track we need to go down is quite difficult.”
Stephen Boyle, Auditor General at Audit Scotland echoed these concerns, adding: “The Fiscal Commission and others are pointing out that we have a significant gap in the way we spend public money compared to the money that we're receiving, so there are difficult choices coming our way as a country.”
Fiona Bennett, Deputy Director, NHS Scotland Financehighlighted the huge challenge of investing in public sector reform and improvement when 80 percent of the budget is taken up with staff pay, which grows each year, saying: "In terms of the health and social care portfolios budget over the past six years, the increases we've had, 80 percent of that has gone on pay bills.”
Karen Scholes CA, ICAS President, reinforced the need for a strategic fiscal framework: “ICAS has been calling for a rolling five-year roadmap and tax strategy setting out the objectives and proposed timeline of devolved taxes policy. We believe that along-term approach to financial management and planningis good financial practice - it enables flexibility to respond thoughtfully to changes and shocks whilst keeping alignment, focus and momentum on the priorities.”
Commenting on the roadmap, she added:“Tax is not a silver bullet. It will not, on its own, solve the funding gap. The government therefore also needs to look at reducing expenditure, generating efficiencies, improving productivity and fueling public-sector reform - both small and large-scale. Fueling economic growth and promoting inward investment is an essential element of diversifying and growing revenues.”
ICAS convened a panel of experts from the Institute for Fiscal Studies, Audit Scotland, NHS Scotland, and the Federation of Small Businesses, including:
-
Stephen Boyle, Auditor General for Scotland, Audit Scotland
-
Prof. David Bell, Professor of Economics, The University of Stirling
-
Fiona Bennett, Deputy Director, NHS Scotland Finance
-
Stefanie Redmond, Tax Policy Senior Manager, KPMG UK
-
Stacey Dingwall, Head of Public Policy and External Affairs (Scotland), The Federation of Small Businesses
-
David Phillips, Associate Director, The Institute for Fiscal Studies
-
John Ireland, Chief Executive, Scottish Fiscal Commission
Categories:
- Press release
- Public sector
