Scottish ministers have come under scrutiny from the country’s auditor general for lacking a credible strategy to tackle a looming £5 billion budget gap by 2029–30. The official audit reveals that, despite the government recording a £1 billion underspend for 2024–25, medium-term financial projections suggest a serious mismatch between planned spending and available resources, fuelled chiefly by rising social security costs and increasing public sector wages.
Stephen Boyle, the auditor general, said: “Although the Scottish Government reported a £1 billion underspend this year, it did so from a combination of additional funding from the UK Government and one-off savings.
“A forecast gap of nearly £5 billion remains between what ministers want to spend on public services and the funding available to them. The Scottish Government needs to prepare more detailed plans setting out how it will close that gap by the end of the decade”.
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In response, Finance Secretary Shona Robison said the underspend demonstrates strong fiscal control at Holyrood, maintaining ministers cannot overspend their budget and pointing to prudent financial management.
“There is no loss of spending power to the Scottish Government and our effective and prudent financial management means every penny has been reallocated for the current financial year so it is spent where it is needed most”.
Last year saw emergency spending restrictions and £500 million in cuts enacted to deliver a balanced budget. There was also a commitment to use up to £460 million from the leasing of seabed plots for large offshore wind projects, though the latest influx of UK government cash allowed ministers to postpone tapping into these renewable funds.
Amid ongoing inflation, wage pressures, and wider geopolitical instability, the call from the auditor is clear: ministers must publish comprehensive plans to plug the budget gap and protect public services for the long term. With almost £5 billion at stake, the need for clear financial strategy and transparent decision-making is becoming urgent.
