THE Scottish Government has “substantially reduced” the value of £140 million worth of loans and guarantees to private companies over the past year, the public spending watchdog has said.
In a report published by Audit Scotland, it was revealed loans totalling £45m to Ferguson Marine Engineering Limited (FMEL) – the shipyard in Port Glasgow that collapsed amid financial difficulties – were reduced to nil.
An equity stake of £37.4m in engineering firm BiFab was reduced to £2m to reflect expected losses. A £39.9m loan to Prestwick Airport was reduced to £6.9m a £21.4m fee for providing financial guarantees to Lochaber Aluminium Smelter was reduced to nil.
The watchdog said improvements have been made to the Scottish Government’s governance arrangements in the last year but said a commitment to publishing a consolidated account covering the whole of Scotland’s public sector had not been fulfilled.
It also said the Scottish Government’s second medium-term financial strategy “lacks indicative spending plans and priorities”.
Caroline Gardner, the Auditor General for Scotland, said: “The Scottish Government’s financial reporting has taken a step backwards at a time when the uncertainty surrounding EU withdrawal will pose unprecedented challenges for the management of public finances.
“Parliament needs better information to be able to better scrutinise ministers’ financial decision-making and to ensure value for money is achieved from a limited budget pot.”
Gardner also said there was “a lot more work to be done to manage Social Security Scotland’s current reliance on the DWP”.
Finance Secretary Derek Mackay said: “We continue to operate in a challenging financial climate as Brexit and the increasing risk of a no-deal scenario remains the biggest threat to our economy and public finances.”
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