SCOTTISH Labour’s creaking behind-the-scenes organisation means the party is not in a fit state to fight the coming Holyrood election, a leaked internal report has warned.

Leader Richard Leonard commissioned the work in late 2018, asking his then deputy, Lesley Laird, to report on whether the party was “battle-ready for 2021”.

A draft report by Ms Laird, who lost her seat in December’s general election, is scathing about how the party has been run.

Staff are described as “demotivated” and undermined by politicians, and the party revealed to lack even short term plans for improving its finances, fundraising and membership.

The SNP said it was further proof that Scottish Labour, which lost six of its seven MPs and came third behind the Tories on 18.6 per cent of the vote last month, was washed up.

Labour MSP Monica Lennon has called for a breakaway Scottish party that was independent from UK Labour on policy and finances.

However the draft report, obtained by the Daily Record, suggests Scottish Labour would struggle without its financial support from London.

It said: “There is no detailed financial or business plan for Scottish Labour. There is no one, three or five-year-plan.”

It also said there was “no membership strategy”, adding: “We do not manage our membership in terms of attraction, retention or development”.

Fundraising was “limited” and “not aligned to strategy, business plan or political objectives”, while the party’s communications operation was outdated and ineffective.

Although staff were highly rated, they themselves felt “frustrated and demotivated when elected representatives, through their words and actions, undermine the huge amount of work and effort they are making to deliver for our party”.

The report also found “not enough oversight, governance and hands on working” by members of the party’s governing body, its Scottish Executive Committee, leading to “high levels of frustration” and an inability to provide the governance needed “on key aspects of the party’s operations”.

It concluded there was a need to make urgent and “tough choices” on “how we spend our time, money and resources if we are to move the dial on our political ambitions.”

A Labour source stressed the report was “subject to change”.

The SNP said it was clear “Scottish Labour is close to being finished as a significant electoral force”.