The processes and accountability arrangements surrounding public finances in Scotland continue to evolve. The devolution of finances increases complexity, creating greater need for a guide to aid understanding and help navigate the different accountability arrangements.

Ensuring sufficient public transparency in Scotland is particularly important to promote public understanding and support effective scrutiny. This is in the public interest.

There is currently no consolidated source available to explain the complete public finance trail matched to accountability arrangements. ICAS has therefore developed this guide which links to various original sources to present a high-level overview. Readers can click on sources for further information.

Original, official sources are used where possible; publication dates vary so we have used the latest available. As the significant financial impact of Covid-19 distorts normal trends, we have used figures pre-2020 where appropriate.

Our guide starts with setting the UK budget and the associated budget scrutiny process and how the UK Government is held accountable for public spending. 

The budget setting & review processes at Westminster (UK budget) and the Scottish Government (Scottish budget) are similar but not identical. The guide shows how powers are split between the UK and Scottish Parliaments

Increasing devolution of powers to the Scottish Parliament offers greater scope for decision-making in Scotland regarding how UK funding is applied. Clear communication of the reasons underlying prioritisations, Scottish decisions on the application of additional funding (e.g. through Barnett consequentials where the UK Parliament has made a spending 
decision in England, involving a change in UK taxes), how this is scrutinised and its impact, are examples where specific focus is important.

Devolved finances are inextricably linked with the UK finances and the guide includes a section on UK Government funding of devolved jurisdictions and the Fiscal Framework. Managing these interdependencies can be difficult (e.g. application of Barnett consequentials and timings for budget setting and forecasting can be squeezed), highlighting the importance of collaboration as part of Scotland’s budget setting process.

The presentation of Scottish public finances does not currently show a single whole of government picture for Scotland. Publishing whole of government accounts (WGA) for Scotland (on the same basis as WGA UK) would increase transparency. This links with performance reporting (at whole of government UK and devolved jurisdiction levels). Developing stronger demonstrable links between parliamentary (and public body) decisions on finance and service performance, with impact assessments, cross-jurisdictional comparisons and outcome measurements is important for public accountability of decision-making. 

We explain the different types of published accounts used by the Scottish Government (IFRS and cash-based) as well as their audit and reporting arrangements.