Further investment in 120-year-old Peterhead Prison is unlikely even though inspectors describe conditions to be worst in the country.
Peterhead Prison is the only facility in the UK where prisoners have no access to toilets when locked in their cells and must empty out buckets of their own waste. However, the Chief Inspector of Prisons say a decision to build a new jail on the site of the Aberdeenshire prison made it less likely to receive improvements.
The prison houses some of Scotland's most dangerous sex offenders. And Dr Andrew McLellan, Her Majesty's Chief Inspector of Prisons in Scotland, noted that high-risk prisoners continue to go free without addressing their behaviour.
Peterhead Prison has been strongly criticised in previous reports. In 2006, inspectors labelled it a "disgrace" and Scotland's worst. But Dr McLellan noted improvements in health-care provision and prison visits at the jail, which with 306 prisoners is at full capacity.
The inspector said: "Previous reports have commented on the damage done to HMP Peterhead by continuing uncertainty.
"One aspect of that damage has been the lack of investment over the last five years at least. Now that a new prison has been announced, it is even less likely that more money will be spent on the existing building - yet its condition continues to deteriorate and prisoners continue to live in it."
The Scottish Government announced plans last year to build a new prison, Grampian, on the site at Peterhead.
Dr McLellan said: "The continuing use of chemical toilets is the most obvious sign of lack of investment in the prison building ... Its continuation remains the worst single feature of prisons in Scotland."
On a more positive note, he added there was a "noticeable improvement" in health care.
He said: "Staffing difficulties have been addressed and the morale of both nursing and medical staff is high."
The report, issued on Wednesday, comes a day after the head of the Scottish Prison Service disclosed hundreds of prisoners could be released from jail under emergency powers to deal with acute overcrowding.
Chief executive Mike Ewart shocked the Scottish Parliament's justice committee by revealing the situation is considered on a daily basis - and there are no contingency plans to deal with prisoners when jails are full.