AUDITORS say they’ve been unable to properly analyse nearly £5 billion of Scottish Government Covid-19 funding because of a “data gap”.
In a new report, released today, Audit Scotland, says that the need to get money from the business support schemes to firms as quickly as possible meant there was “not enough focus on gathering detailed data” on how the money was spent.
They warned this could impact future spending and even have consequences for fraud investigations.
Between March 2020 and October 2021, the Scottish Government made around £4.4 billion of grants and non-domestic rate reliefs available to businesses, most of which was administered by councils. A further £375 million was allocated after the emergence of the Omicron variant late last year.
Audit Scotland says that to pay out funds and support businesses quickly, the Scottish Government “placed reliance on the controls and systems that councils and others already had in place.”
This means ministers are unable to say what the total amounts paid out from the more general schemes to different economic sectors are.
And that around 20 per cent of sector-specific funding administered by organisations such as Scottish Enterprise “cannot currently be matched to council areas”.
It also means it’s not possible to see how funding supported specific groups, such as female-owned businesses, which were disproportionately hit by Covid-19.
Stephen Boyle, Auditor General for Scotland said: “These business support schemes were administered at pace in exceptional circumstances. But knowing where the money went matters.
"To get future policy development and delivery right, it will be important for the Scottish Government to fully understand how funding was used to support specific businesses and groups over the last two years of the pandemic."
William Moyes, Chair of the Accounts Commission said: “Councils' fraud arrangements are generally robust, but they were heavily relied upon to ensure businesses were eligible for funding during the pandemic. Councils will need to continue to work closely with the Scottish Government to ensure a better picture emerges of how money was distributed."
Scottish Conservative finance spokeswoman Liz Smith said the report highlighted a “shocking lack of data”.
She said: “Enormous sums of public money were paid out to help struggling businesses yet, thanks to the SNP, we don’t properly know where it went.
“While we accept that Covid funding had to be rolled out swiftly, there is no excuse for this shocking lack of data.
“Audit Scotland exists to make sure that public money is spent responsibly, and when even they can’t track where it went, Government accountability is lost.
“Taxpayers have a right to know where their hard-earned cash has gone and will naturally be suspicious when this information can’t – or won’t – be provided by an SNP Government that increasingly considers itself above scrutiny.”
Labour MSP Daniel Johnson said the Scottish Government has a “disdain for economic transparency”.
He added: “Billions of pounds have come and gone through the SNP Government’s coffers, but this spending has been mired in secrecy and confusion.
“The lack of data highlighted in this report makes it impossible to determine whether these huge sums reached those who really needed it and delivered good value for taxpayers.”
Responding to the report, Economy Secretary Kate Forbes said: “Every decision the Scottish Government has taken has centred around ensuring businesses got the support they needed when they needed it – resulting in over £4.5 billion being allocated to businesses across the country, including around £1.6 billion in rates relief – which is more generous than the other UK administrations so far.
“We will now carefully consider the findings of this report and of course any lessons will be learned, but fundamentally this report shows the decisions we took ensured lifeline support reached key businesses promptly and our economy continued to grow by 7.1% despite the necessary public health restrictions.”
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