THE Scottish Government should take a more strategic approach to allocating funding, according to a new report.

Holyrood’s Finance and Constitution Committee releases its Budget report today, saying new powers over social security and taxation mean amounts in the public purse will vary from year to year.

MSPs said ministers should consider whether distributing all available funds each year is sustainable. The committee urged the UK Government to consider its findings and look into allowing the Scottish Parliament to have more powers on borrowing.

Convener Bruce Crawford said there was a need for a medium-term approach, suggesting instituting multi-year budgets for public bodies in a bid to improve forward planning.

He called on the Scottish Government to implement the changes in its next medium-term financial strategy.

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Crawford, who recently announced he is stepping down before the 2021 Holyrood elections, also urged the UK Government to consider the proposals made in the report as Holyrood calls for increased fiscal powers to be transferred.

He said: “A key theme in this report is the increasing volatility and complexity of Scotland’s Budget and the need to look beyond a one-year horizon approach.

“Our report seeks to address the risks and opportunities that arise from an increasingly complex landscape, both politically and economically.

“Our committee recognises the fundamental challenges the Scottish Government faces in managing the volatility that arises from the operation of the fiscal framework, while also meeting its statutory obligation to balance its Budget annually. In that light, we recommend HM Treasury carefully examine the issues raised in our report when considering the Scottish Government’s request for additional resource borrowing and reserve powers to help manage volatility.”

He added: “We are also of the view, however, that there needs to be a clear strategy for the use of the existing Budget management tools.

“We recommend therefore that the Scottish Government’s next medium-term financial strategy should set out the basis for a more strategic approach to budgetary management.

“It should look beyond the current annualised approach and seek to address medium-term volatility and risk, as well as the possibility of multi-annual budgets for the public bodies.

“But the committee is also aware it will be challenging to develop this approach in the absence of a UK comprehensive spending review.”