Watchdog raises transparency questions over ScotWind millions

The Scottish Government must be more transparent about how it will spend the £755m ScotWind takings, the public spending watchdog has said.

The offshore renewables leasing round was held by Crown Estate Scotland six years ago and offered buyers capped prices for the option to develop the seabed, with authorities banking on the chance of securing long-term lease payments instead.

The decision, which was supported by the Scottish Government, meant an open auction – which could have increased immediate returns – did not take place.

Now Audit Scotland has said ministers must increase the transparency around how the £755m raised will be used.

Ministers have drawn down £96m of those funds to date. In a new report, the watchdog has said it is unclear how that money has been used to support the transition to net zero, and there is further uncertainty about how the Scottish Government intends to use remaining funds over the course of the parliament. That includes work around the purpose and operation of a new ScotWind Wealth Fund as ministers' plans develop. 

Stephen Boyle, Auditor General for Scotland, said: “Crown Estate Scotland and the Scottish Government took a high risk and reward approach to the ScotWind leasing round. Whether that decision represents value for money will be determined in the coming years. 

“If developers sign long-term leases before their option periods end, then annual payments will continue to benefit Scotland for the next 60 years.  

“However, if they give up their options the capped option pricing model will result in limited wider economic benefits and substantially reduced public revenues. 

“What is now important is that the Scottish Government is much more transparent about their plans for how the ScotWind funds will be used across this parliamentary term and beyond.”

No single business case for ScotWind was produced, but in 2021 a rapid review was held when another leasing round in the rest of the UK generated revenue through an uncapped, open pricing approach.

While the CES seabed development fee cap was increased from £10,000 to £100,000, a higher ceiling was rejected.

Daniel Johnson, Scottish Labour’s energy spokesperson, accused the SNP of “shambolic” management of ScotWind.

He said: “The SNP sold off our seabeds on the cheap and then spent years frittering away the proceeds plugging their own budget gaps.

“With hundreds of millions of pounds on the table, the SNP must set out how it will put this money to good use.

“The SNP must deliver the transparency needed and ensure these funds help to unlock opportunities, jobs and growth across Scotland.”

However, energy minister Stephen Gethins said the programme is a “success story” set to bring in an estimated £80-110m in annual income over its 60-year lifetime, plus billions in supply chain commitments.

Gethins said: “This vindicates the decision to focus on project delivery and attracting investment, rather than upfront revenues. This approach will help ensure sustainable economic value through future employment, energy security and public revenues.

“ScotWind was designed to secure long-term economic benefits for Scotland and this report makes clear that more than £755m of fees have been generated from this opening leasing round alone. An additional £65m has been collected from the Innovation and Targeted Oil & Gas (INTOG) renewables project and the funds have accrued interest of almost £100m to date.

“I recognise the importance of providing clarity on how offshore wind revenues will be managed, and we will continue to do so through our annual budget setting process. This government also remains committed to establishing a ScotWind Wealth Fund during this parliament to ensure future generations benefit from Scotland's renewables wealth.”