Scotland politics

'Fundamental' review of Holyrood budget process launched

Scottish Parliament Image copyright Getty Images
Image caption The Scottish Parliament has taken on a range of new fiscal powers in recent years

A "fundamental" review of the Scottish Parliament's budget process has been launched to take account of Scotland's new fiscal powers.

Holyrood has taken on a range of new devolved tax and spending powers, including the ability to set a Scottish rate of income tax.

The Scottish government, the parliament and external experts will take part in the review and draft recommendations.

Finance Secretary Derek Mackay said the budget process needed to "evolve".

Mr Mackay is to delay his draft budget this year, citing uncertainty following the Brexit vote.

Scotland has inherited a range of new fiscal powers in recent years, from the ability to set a Scottish rate of income tax and power over air passenger duty to a share of VAT receipts.

A Scottish Fiscal Commission has been set up to scrutinise new tax and borrowing powers, and is to carry out forecasts of tax revenues and GDP.

Image caption Finance Secretary Derek Mackay has welcomed the review

The review group will look at the changes needed to make sure there is proper oversight and scrutiny of how the new powers are used.

Members of the group include civil servants working on the finance committee, government managers and external experts such as the Auditor General Caroline Gardner, Revenue Scotland chief Elaine Lorimer, and Sean Neill of the Scottish Fiscal Commission.

'Proper scrutiny'

Finance committee convener Bruce Crawford said: "Holyrood's budget process was designed nearly 20 years ago, at a time when the Scottish government's budget was largely determined by Westminster through the Barnett formula.

"With Scotland's new tax powers, the Scottish government is about to become responsible for raising much more of what it spends, and will rely on tax forecasting in order to set out its draft budget before parliament each year.

"Understandably, the government will want to rely on the most accurate forecasts of tax revenue possible in order to ensure confidence and credibility in its budget. Equally, however, the finance committee will want to ensure that any new budget process still includes sufficient time for proper parliamentary scrutiny."

Finance Secretary Derek Mackay said he was "very supportive" of the group's establishment.

He added: "Scotland's budget process needs to evolve to take account of the complexities and opportunities associated with the Scottish Parliament's new powers.

"It is important to ensure that we develop a process that balances the time required for proportionate and effective parliamentary scrutiny with the need to ensure that the information being scrutinised is as accurate as possible and based on the most up-to-date forecast information."

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