Scottish Government needs to be clearer about its economic strategy, says Audit Scotland

Image credit: Holyrood

The Scottish Government has been criticised for the not being clear enough about how specific policy initiatives deliver economic growth.

Ministers have also been urged to state how evidence is used in planning the economic strategy.

The criticism was made in a new report by Audit Scotland on the role of the Scottish Government and enterprise agencies in supporting economic growth.

RELATED CONTENT

Interest rates could fall as the economy suffers 'post-traumatic stress' of Brexit, says Mark Carney

Scottish business calls for calm and stability following the EU referendum result

Scotland’s new welfare powers set to be transferred

The public sector auditor points out that the Scottish Government's economic plan is a “broad, high-level strategy”, which “does not set out in detail how underpinning policies and initiatives will be implemented”.

It notes that the Scottish Government’s National Performance Framework (NPF) measures progress towards economic targets and outcomes, but does not measure the contribution of specific policies and initiatives to delivering outcomes, which makes it difficult to monitor progress.

The report also points out that the Scottish Government has refreshed its economic strategy twice since 2007, but it has not collated progress or the contribution made by individual public bodies.

The auditor also criticises as lack of clarity about evidence has been used to decide the strategy’s priorities.

“The Scottish Government has not clearly set out how it uses this evidence to determine its priorities or growth sectors,” the report says.

“For example, although international evidence shows a link between reducing inequality and economic growth, the Scottish Government is still building its evidence base to support its inclusive growth priority and how this applies to Scotland.

“It is also not clear the extent to which stakeholder feedback influenced the strategy.”

Among Audit Scotland’s recommendations are that the Scottish Government develop clearer targets, actions and timescales, with specific responsibilities assigned to public bodies, and that it monitors and reports progress.

It also calls for the Government to make public how evidence, including stakeholder consultation, is used to develop future strategies.

Northern Ireland’s approach to developing and monitoring its economic strategy is cited as an example of good practice.

Although that the report notes that Scottish Enterprise and Highlands and Islands Enterprise (HIE) have performed well against their own agreed performance measures, they are different to the performance measures in the NPF.

Moreover, the landscape for business support has become more complicated with new tax-raising and borrowing powers for Scotland, the focus on ‘inclusive economic growth’, city deals and a potential islands deal, as well as reducing budgets, it says.

It recommends that the Scottish Government should review the role of enterprise bodies because the lack of clarity creates a risk of duplication or inefficiency.

Caroline Gardner, Auditor General for Scotland, said: "The advent of new financial powers means that the Scottish Government now has a direct stake in the performance of the Scottish economy.

“Scottish Enterprise, and Highlands and Islands Enterprise have a positive impact on businesses and communities but their work is only part of the activity that contributes to the Scottish Government's ambition for sustainable and inclusive economic growth.

"New powers, continuing pressure on public finances, and uncertainty following the recent EU referendum mean that the Scottish Government needs to target public sector activity and funding where they will have the biggest impact on achieving its economic strategy. It also needs to be able to measure progress so its plans remain on track."