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Swinney: no to new finance watchdog More scrutiny needed, says ex-auditor. By Colin Donald

A recommendation from former auditor general Robert Black for an independent "Treasury-type" body to tackle wasteful spending and poor productivity in public services has been rejected by John Swinney, who said he had "no plans" to consider the proposal.

Former auditor  general Robert Black wants to see a new 'Treasury-type' finance watchdog Photograph: Stewart Attwood
Former auditor general Robert Black wants to see a new 'Treasury-type' finance watchdog Photograph: Stewart Attwood

Black, one of Scotland's most distinguished public servants, has proposed the establishment of a Scottish Commission for Resources and Performance, modelled on Australia's Productivity Commission. The body, staffed with experienced senior public servants, academics, and business people and answerable to the Scottish Parliament, would scrutinise the cost, effectiveness and quality of outcomes from new and existing legislation.

"If public bodies knew that they were to come under the spotlight of the Commission they would be incentivised to improve their performance and cost information before the economists and performance auditors paid a visit," he claimed.

In his paper, a condensed version of which was favourably received last week by MSPs in the Scottish Parliament's local government committee, the former leader of Stirling and Tayside councils painted a gloomy picture of a looming crisis in Scotland's finances with shrinking budgets and growing liabilities resulting from an ageing population.

Though careful to praise the quality of Scotland's "leadership cadre", he highlighted a lack of "robust, systematic scrutiny of spending and performance" stemming from a decade of public spending growth.

Black also presented the independence debate as a distraction from the "urgent" task of putting Scotland's finances on a sustainable footing, claiming Scotland's financial problems would remain "under the status quo, more devolution or independence".

"Time is not on our side" he wrote. "The challenges are immediate and require an urgent response. We cannot afford to put this agenda to one side until 2014."

A spokesman for Finance Secretary John Swinney slapped down the proposal, saying there were no current plans to establish such a commission. He said: "There are already a range of mechanisms, such as the National Performance Framework and the NHS HEAT targets, to measure and drive improvement. These are supported by a scrutiny and inspection regime, including the Accounts Commission and the auditor general."

That directly contradicts the former auditor general's claim that existing bodies are inadequate to fulfil the "challenge function" of the proposed SCRP, as Audit Scotland and the Accounts Commission are "retrospective and debarred from involvement in policy matters".

"Pressures on the cost side" highlighted by Black include a £5 billion backlog in infrastructure and health service maintenance, a £500 million increase in the cost of concessionary travel over 10 years, annual free personal care costs of £560m rising by about 15% each year, and prescribing costs which have more than doubled in a decade to £1.5 billion.

"Some estimates indicate that by 2030, an extra £3.5bn or so will have to be found to pay for health and social services for people over 65 if delivery systems remain as they are now," he said.

The SCRP proposal, detailed in a paper for the respected independent think tank the David Hume Institute, echoes one of the chief proposals of the Scottish Government's own Independent Budget Review (IBR).

The IBR report recommends "improv[ing] the quality, availability and application of evaluation, monitoring and reporting data in relation to the outcomes across the public sector to ensure that resources are applied to full benefit."

Published in July 2010 the IBR's recommendations – including a debate on ending universal services, also recommended by Black – were mostly shelved by the Scottish Government.

In a recent interview with Holyrood Magazine John Swinney said: "The IBR gave us more ideas than we required and we took on board some fairly brave stuff like pay constraint."

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