Meeting of the Parliament 10 September 2025
Today’s debate has turned into the usual constitutional battle, as these things do, but the Parliament needs to have an honest and grown-up conversation about the reality of Scotland’s finances, and I would like to think that we can do so. I say that not as someone taking a constitutional or political point of view but as a member of the Public Audit Committee, which is a great committee because we get sight of and scrutinise all the numbers, many of which have been quoted by speakers in the debate. We look at the numbers objectively and fairly, as does Audit Scotland.
We are talking not only about figures on a balance sheet but about people. When we look at the state of Scotland’s finances, we are talking about whether we have enough schoolteachers, whether people with mental health problems or additional support needs are being helped back into the workplace and whether there is enough money to build new ferries for our island communities or enough to fund outdoor education. Apparently, there is never enough money to do it all, but the numbers are serious, and the Conservatives are right to bring them to the Parliament’s attention today.
By 2030, there will be a £4.7 billion funding gap. That is the Scottish Fiscal Commission’s own number; it is not a made-up political number for a Daily Mail headline but a real, independently forecast number. The Government needs to have a harsh look at the reality, because it is in denial about the figures.
In the motion, another interesting point that I agree with is about scrutiny. I have a lot of respect for Audit Scotland’s role, but its powers are somewhat clipped at the moment, and I want to see them expanded. For example, there should be mandatory deadlines for ministerial responses to Audit Scotland’s section 22 reports. There should be stronger enforcement powers, in particular when issues of poor performance or financial mismanagement have been identified. I also want the Parliament’s committees to have enhanced scrutiny powers to ensure that any recommendations that they make actually lead to reform, because too many reports just sit on ministers’ shelves.
Too many projects have gone massively over budget. The new ferries were supposed to cost less than £100 million; the bill is now sitting at more than £400 million. What could the Government have done with that extra £300 million? What extra public services could it have supported with it? HMP Glasgow is 10 times over budget—the figure sits at nearly £1 billion of spending. We can argue about the reasons why that has happened, but think of the money that has been wasted on those inflationary costs. The A9 is already more than £100 million over budget. I suspect that that figure will rise massively, if it ever gets completed. We cannot blame all those costs on inflation, because had the projects been delivered on time—when inflation was incredibly low and money was cheap to borrow—it would not have mattered.
We need to improve Scotland’s productivity, which grew by only 1 per cent each year from 2008 to 2023. That is important because lack of economic activity affects how much money the Government has to spend. Taking more than £3 billion in additional tax revenues due to tax differentials north of the border has resulted in only just over £600 million of cash being available for the Government to spend. That is 20 per cent—20p in every extra pound that is paid by Scots. We have to look at that properly.
We also need to look at spend. The welfare budget is sitting at more than £6 billion and is due to rise to £9 billion. At the minute, it is 15 per cent of the entire budget, and it will rise. The health and social care budget is sitting at around 40 per cent of the entire budget. If we put those two areas together, 70 per cent of Scotland’s budget will be spent on two portfolios. Where does that leave education, transport, preventative healthcare and all the other measures? It is about time that we got people back into the workforce by supporting those who need it most.
The reality is that there is a £4.7 billion gap, productivity is lagging, and we are spending more than we are getting in income. That has to be addressed. We cannot talk, argue or borrow our way out of the problem. We will have to sit down as grown-ups in the room and agree a way out of it.