The Scottish Government recorded an underspend of £509m, according to the latest set of consolidated accounts. 

The net expenditure in the 2022/23 financial year was £49.7bn, with a spare £188m in the resource budget, and £321m in the capital budget, equivalent to around 1% of the total. 

The Conservatives described the underspend as "negligent."

READ MORE: ScotGov award of new ferry contract to CalMac is 'preferred option'

The accounts were accompanied by a report from Audit Scotland which warned that the country's public services were "not affordable” in their current shape. 

They called on ministers to urgently develop "a programme of public service reform which balances the short-term financial pressures with the need for longer term change."

This, they added, "may require financial investment."

The auditors also warned that "workforce reform" would be "essential to achieving financial sustainability, particularly given the recent pressures from public sector pay settlements."

They called on the Scottish Government "to work with partners to make changes to the design and delivery of services."

While the accounts provided by the government were given an unqualified audit opinion, meaning they show a “true and fair” view of the situation, there was some criticism of the "vision, leadership and governance" being provided by ministers. 

Audit Scotland said the complexity of the government machine meant there was "potential for duplication and inefficiency."

They said the whole governance and assurance arrangements should be "refined and streamlined."

"Corporate transformation," they added, was "a way for the Scottish Government to achieve greater efficiencies and must be an immediate priority."

The auditor warned that performance reporting within the Scottish Government "could be improved" as there was an "absence of clearly defined, measurable performance targets for all

This meant it was "difficult to assess whether the Scottish Government is delivering its intended aims in support of national outcomes."


Audit Scotland also criticised the government for a lack of progress on developing a devolved public sector account which would detail the overall assets and liabilities within the Scottish public sector.

Ministers first committed to pulling this together in 2016.


Stephen Boyle, Auditor General for Scotland, said:  “The Scottish Government responded quickly to the impact of inflation and other factors on the public finances. But most of the decisions taken were short-term and will not help manage more turbulence over the next few years. 

“Public services in their current shape are not affordable. Ministers urgently need to develop a clear road map that lays out how public services will be reformed to make them financially sustainable.” 

READ MORE: Michael Matheson blames teenage sons watching football for £11k data roaming bill

Scottish Conservative Shadow Cabinet Secretary for finance and economy Liz Smith MSP, said: “It is negligent of the SNP government to have underspent more than £500 million of their vast budget when public services and households are struggling with a cost of living crisis.

“That shortfall is particularly damaging, given the SNP’s record of wasting public money on pet projects including their independence papers.

“It is yet another typical example of their poor economic management and short-term approach, which has now been singled out as a failing not only by Audit Scotland, but the Fraser of Allander Institute and the Scottish parliament’s own finance committee.

“Audit Scotland also criticises ministerial interventions in Scottish businesses, saying thay have come at a ‘significant financial cost’. As the Auditor-General points out, there must be a much clearer plan for reform of public services which, in their current form, are unaffordable.

“The Scottish Conservatives have set out our plan to grow Scotland’s economy to raise more money for our public services so that they can be delivered to the standard the taxpayer deserves and the SNP should give it their full backing.”

Responding to the report, Deputy First Minister Shona Robison said: “We are pleased that the Scottish Government’s accounts have been given an unqualified audit opinion for the 18th year running in the face of a profoundly challenging financial situation, caused by the pandemic, war in Ukraine, and high inflation.

“However, we recognise that more needs to be done.

“That’s why we have embarked on an ambitious programme of public service reform as part of our medium-term financial strategy, which sets out how we will do all we can within our powers to ensure public finances are on a sustainable path.”

The Government also said it is redesigning its internal performance reporting to better measure progress against its goals.