Audit Scotland: Watchdog concern over where £4.4bn Covid fund was spent

Billions were paid out by the Scottish Government during the course of the coronavirus pandemic.

Audit Scotland: Analysis of how billions spent during Covid pandemic ‘not possible’ due to gaps in data iStock
The Auditor General for Scotland said that it matters where money went during the pandemic.

A detailed analysis of how billions of pounds in emergency funding were paid out during the pandemic by the Scottish Government is “not possible” due to gaps in data, according to the country’s spending watchdog.

Around £4.4bn of grants and non-domestic rate reliefs were provided by the Government between the start of the pandemic in March 2020 and October 2021.

A further £375m was then made available in December 2021 in response to the Omicron variant.

However in a new report, Audit Scotland has stated that there was not enough focus on gathering detailed data regarding how money was distributed and how quickly applicants received funding.

The watchdog explained that it means the Scottish Government does not have an analysis of the total amounts paid out from the more general schemes to different economic sectors.

And it noted that for sector specific funding administered by national organisations such as Scottish Enterprise, around 20% of payments cannot currently be matched to council areas.

Audit Scotland further indicated that information to enable wider analysis of how funding supported specific groups, such as female-owned businesses disproportionately hit by Covid-19, is not available from Scottish Government centrally held data.

Retrospective impact assessments were completed by the Scottish Government in late 2021 to consider how business support funding addressed inequalities, as well as a retrospective fraud review of funding that local authorities administered.

A large data cleansing exercise is currently being undertaken by the Government to ensure that datasets for individual funds, including those administered by councils, are complete.

Stephen Boyle, Auditor General for Scotland, underlined the need for ministers to “fully understand” how funding was used to support businesses and specific groups.

“These business support schemes were administered at pace in exceptional circumstances. But knowing where the money went matters,” he said.

“To get future policy development and delivery right, it will be important for the Scottish Government to fully understand how funding was used to support specific businesses and groups over the last two years of the pandemic.” 

Scottish Conservative finance and economy spokesperson Liz Smith said that there was “no excuse” for the lack of data as she suggested that the SNP government sees itself as “above scrutiny”.

“This damning report highlights the shocking lack of data from the Scottish Government on Covid support funding and is just the latest example of the SNP’s lack of transparency on public spending,” she said.

“Enormous sums of public money were paid out to help struggling businesses yet, thanks to the SNP, we don’t properly know where it went.

“While we accept that Covid funding had to be rolled out swiftly, there is no excuse for this shocking lack of data.

“Audit Scotland exists to make sure that public money is spent responsibly, and when even they can’t track where it went, government accountability is lost.

“Taxpayers have a right to know where their hard-earned cash has gone and will naturally be suspicious when this information can’t – or won’t – be provided by an SNP Government that increasingly considers itself above scrutiny.”

Scottish Labour’s economy and finance spokesperson Daniel Johnson called for clarity to be provided by the SNP on how public money was spent.

“The SNP’s disdain for economic transparency reached new heights during the pandemic,” said Johnson.

“Billions of pounds have come and gone through the SNP government’s coffers, but this spending has been mired in secrecy and confusion. 

“The lack of data highlighted in this report makes it impossible to determine whether these huge sums reached those who really needed it and delivered good value for taxpayers.

“The SNP must deliver the clarity and openness we need on how they spent public money and helped businesses through the pandemic.”

Scotland’s economy secretary Kate Forbes insisted that every decision taken by the Scottish Government has centred around ensuring businesses received the support they needed.

“I am pleased that both Audit Scotland and the Accounts Commission have recognised how quickly the Scottish Government was able to establish a wide ranging business support package in order to help safeguard thousands of businesses and jobs,” she said.

“This includes providing direct support to over 4000 businesses and over 5000 self-employed people who were facing hardship but ineligible for UK Government funding support.

“I am equally pleased this report reflects the unique and challenging context in which new support packages had to be established, and that despite the speed and scale of our response, we were able to work closely with industry, our enterprise agencies and local authorities.”

Forbes continued: “Every decision the Scottish Government has taken has centred around ensuring businesses got the support they needed when they needed it – resulting in over £4.5bn being allocated to businesses across the country, including around £1.6bn in rates relief – which is more generous than the other UK administrations so far.

“We will now carefully consider the findings of this report and of course any lessons will be learned, but fundamentally this report shows the decisions we took ensured lifeline support reached key businesses promptly and our economy continued to grow by 7.1% despite the necessary public health restrictions.”

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