The Finance and Constitution Committee of the Scottish Parliament established the Budget Process Review Group for the purpose of carrying out a fundamental review of budgetary scrutiny. The key reason behind the review is to ensure that the budget process accommodates the Scottish Parliament’s new financial powers as well as the operation of the Fiscal Framework. As a result of both the Scotland Act 2012 and the Scotland Act 2016, the Scottish Parliament now has powers to both raise and allocate revenue, where previously the Scottish budget was mainly concerned with expenditure.
The Budget Process Review Group published its Interim Report in March, together with a consultation on their findings to date.
Our response refers to the CIOT’s joint work with the Institute for Government and Institute for Fiscal Studies, which resulted in the report “Better Budgets: making tax policy better”. We note some key aims for a budget process, including transparency, and robust budgetary scrutiny. We also would like to see better public debate and more informed decisions, and put forward some ideas on how to improve these. However, we also note the special constraints on the Scottish budget process, due to the Scottish Parliament’s limited tax-raising powers and the reliance on the block grant, which means there is a high degree of interdependence between the UK and Scottish budget processes.