The Scottish government does not have enough money to deliver its £26bn public sector infrastructure plan, according to Audit Scotland.
Scotland is expected to miss its infrastructure targets and will be forced to pause several of its schedule projects despite “significant” need, the public spending watchdog has said.
The latest Audit Scotland report has found that the Scottish government is faced with a combination of reduced capital budgets, higher costs and increased maintenance requirements that would make it unable to afford the cost of delivering its public sector infrastructure plan.
As a result, plans for improving and building roads, railways and hospitals might be paused.
The auditor said it expects a cost increase for the 45 infrastructure projects of at least £55m between December 2022 and June 2023, while ministers expect a 7 per cent real-terms reduction in the capital block grant it receives from the UK government between 2023/24 and 2027/28.
The report predicted that the ambition to double maintenance spending will be missed and stressed the £1.1bn worth of works needed to upgrade 50-year-old NHS buildings, as well as the need to improve Victorian-era prisons.
The document also highlighted the challenges that several key projects have faced, such as the £32m borders decarbonisation initiative (now paused), the £140m HMP Highland project (delayed), the £131m Dunfermline learning campus (facing cost increases) and the £3bn A9 dualling project (delayed).
“The Scottish government will need to understand and deal with backlog maintenance as well as investing in new infrastructure,” the report states. “If it does not do this, it runs the risk of service interruptions and larger investments being needed in the future.”
In addition, the auditor stressed the lack of transparency around plans to fund Scotland’s net zero transition. It also called for better data to be published regarding the condition, occupancy and cost of the Scottish public estate.
To date, the government has only provided details for £14.9bn of the £26bn worth of investment in road, rail, hospital and other building projects that the nation requires.
“Scottish government spending decisions on infrastructure will affect public services, and ministers need to be transparent about how they are made,” said Stephen Boyle, auditor general for Scotland.
“Efficient use of the public estate in the future is key to reforming public services, but the Scottish government needs better infrastructure data to inform its planning.”
In order to address some of these costs, Boyle recommended that the government jettisoned some of its existing buildings to save money.
Tory MSP Murdo Fraser called the report “a damning indictment of the SNP’s mishandling of the public finances”.
“Ministers continue to receive billions in funding from the UK government, yet are falling woefully short of delivering the infrastructure investment required,” he said. “Because the SNP-Green government has made Scotland the highest-taxed part of the UK, our economy is uncompetitive and not generating sufficient growth to fund these crucial projects. Failure to invest in infrastructure will further hold us back, creating a vicious circle.”
Deputy first minister Shona Robison said: “The Scottish government is firmly committed to infrastructure investment as a key factor in securing inclusive economic growth and delivering high-quality public services.
“The challenging economic conditions of the last few years resulting from Brexit and high inflation as well as the real-terms fall in the capital grant allocation from the UK government have led to delays for some infrastructure projects.
“Looking ahead, we are having to prioritise projects and programmes so the capital spending available is targeted. We have also started work on delivering a more efficient approach to the management of public sector property that will save public funds and enable organisations to step towards a net zero estate.”
