A “fundamental review” of Holyrood’s budget process has been launched in advance of a swathe of new tax and spend powers being devolved to Scotland.
From April next year, ministers north of the border will have complete control over income-tax rates and bands, assignment of half the share of VAT receipts in Scotland and power over air passenger duty.
A review group, comprising the parliament, the Scottish Government, public finance experts and academics, is to examine what changes to the budget process will be required to ensure proper scrutiny.
Finance Secretary Derek Mackay said the budget process needed to “evolve to take account of the complexities and opportunities” associated with the new powers.
He came under fire from members of the Finance Committee earlier this week after he told them his proposals for his next budget would not be published until shortly before Christmas.
Mr Mackay argued the wait for the UK Government’s autumn statement, allied to continuing uncertainty caused by the Brexit vote, justified the delay.
Commenting on the review, he added: “It is important to ensure we develop a process that balances the time required for proportionate and effective parliamentary scrutiny with the need to ensure that the information being scrutinised is as accurate as possible and based on the most up-to-date forecast information.”
Finance Committee convener Bruce Crawford responded: “Holyrood’s budget process was designed nearly 20 years ago at a time when the Scottish Government’s budget was largely determined by Westminster through the Barnett Formula.
“With Scotland’s new tax powers, the Scottish Government is about to become responsible for raising much more of what it spends and will rely on tax forecasting in order to set out its draft budget before Parliament each year.
“Understandably, the government will want to rely on the most accurate forecasts of tax revenue possible in order to ensure confidence and credibility in its budget.
“Equally, however, the Finance Committee will want to ensure that any new budget process still includes sufficient time for proper parliamentary scrutiny.”
The group will consider a range of issues including the forecasting of tax receipts, calculation of adjustments to Scotland’s budget allocation from the UK, and the UK Government’s autumn statement.
It will report to the Parliament’s Finance Committee before summer recess next year.
A Scottish Fiscal Commission has been set up to carry out forecasts of tax revenues and GDP.