A WATCHDOG which has delivered a series of highly critical findings into the implementation of Scottish Government policies is facing a £1million budget cut, according to reports.

Audit Scotland has released a number of scathing reviews into shortcomings in areas such as health, education and the Ferguson's ferries' contract.

Tables in the Scottish Government's resource spending review, published last month, revealed that the total budget for the body and the Scottish Parliament would be frozen at £122m from 2022/23 to 2026/27. 

The Scottish Sun reported today that the body could face a cut of £1million over the coming four years.

Ms Forbes unveiled her financial plans after economists warned of a possible £3.5billion deficit created by spending promises, slow growth in tax revenues and soaring inflation.

Schools, universities, the police and councils are among the services facing cuts with some 30,000 public sector jobs set to go as the government aims to reduce the size of the workforce to pre pandemic levels.

Spending on enterprise, tourism and promoting trade is facing particularly deep savings, with the independent Institute for Fiscal Studies (IFS) saying it would be scaled back by 16 per cent.

Ms Forbes has blamed the financial blackhole on the funding settlement from Westminster, telling MSPs: "Following a real terms reduction of 5.2 per cent between last year and this, our real terms funding grows by only two per cent across the whole four year period, after accounting for the devolution of social security benefits."

But her plans - which include setting aside £20m for an independence referendum next year - have sparked anger among council chiefs and trade unions.

Commenting on the threatened cuts to the public spending watchdog, Scottish Labour finance spokesman Daniel Johnson said: “Audit Scotland have done vital work and any cuts to their budget would be a blatant attack on transparency and openness in Scotland - but perhaps that is the aim.”

Audit Scotland also gets cash from public bodies for auditing them, but is not allowed to raise these to fill any shortfall.

Formally, the Scottish Parliament - via a committee of MSPs - sets Audit Scotland’s budget, then requests the money from ministers.

Audit Scotland said: "Our costs are met through a balance of the funding we receive from the Scottish Parliament and the audit fees that public bodies pay us each year.

"We will be discussing our funding with the parliament later this year.”
The Scottish Government said its spending review figures related to Audit Scotland were “illustrative”.

In March this year Audit Scotland published a damning report into the failures of the procurement and construction of two vessels known as Hull 801 and Hull 802 intended to serve two Scottish island routes.

The initial £97 million cost has risen to about £250 million and neither is likely to be ready for use until next year, making them five years late. The Ferguson shipyard in Port Glasgow building the vessels collapsed into insolvency in 2019 and was then nationalised.

It also found there was “insufficient documentary evidence” to explain why the contract was given to Ferguson Marine without a full refund guarantee.

Stephen Boyle, the Auditor General, later expressed his frustration at not being able to review all documentation relating the awarding of the contract.

In education, an Audit Scotland report concluded last year that “the poverty-related attainment gap remains wide and inequalities have been exacerbated by Covid-19.

The development came despite the First Minister's key ambition to improve attainment among children from the poorest backgrounds.

“Progress on closing the gap has been limited and falls short of the Scottish Government’s aims," said the Audit Scotland report.

The watchdog last month gave a more positive assessment of the Scottish Government's rollout of new benefits saying the programme had gone well despite initial delays to accepting responsibility for some payments.

It added that “substantial risks remain” as it highlighted independent forecasts that predict the Scottish Government will need £760 million to pay for more expensive welfare policies by 2026.

In 2019 Audit Scotland warned the country's NHS was heading for a £207million gap in its finances within two years saying there was “little evidence” that a reliance on hospital care over GP use was reducing.