Scotland’s parliamentary decision-makers – our elected MSPs – must up their game when it comes to fiscal literacy, an Organisation for European Co-operation and Development (OECD) report has politely suggested.
“Strengthening levels of fiscal literacy among Members of the Scottish Parliament will also enhance the impact of the SFC’s work and help it inform political debate across a broader range of spending areas,” it says.
The comments come in the second independent review of the Scottish Fiscal Commission (SFC) published by the OECD experts.
The SFC is an independent institution with 21 staff which exams how taxpayers’ money in raised and spent. SFC’s nearest peer is the UK’s Office of Budget Responsibility, which as 31 staff.
The OECD said the commission must continuing to strengthen its parliamentary engagement, especially with the committee system. It acknowledged that Scotland’s complex fiscal framework can be difficult to communicate and that “public awareness of the Scottish budget, fiscal policy and fiscal frameworks” is relatively low.
Critics have frequently pointed out that Scotland’s MSPs have been very lax in their interrogation of spending areas of the Scottish Government.
“Members of the Scottish Parliament serving on subject committees will often have a good understanding of relevant policy issues, but are not regularly immersed in budget scrutiny. This can hinder the depth of their engagement on this important topic, and hold back political debate in areas that are important for fiscal sustainability,” says OECD report.
The report agreed that the SFC has done an effective job of managing its high-stakes forecasting environment.
“These stakes will increase in coming years as forecast errors have consequences for an already squeezed government budget.”
“Transparency and clear communications around these errors and the unique challenges they bring is an opportunity to help quantify the risk and uncertainty for stakeholders and protect the SFC’s reputation.”
The OECD report also said that the Scottish Government has not always provided timely information for SFC’s researchers which is vital for accurate forecasting.
It suggested that both the Scottish Government and the SFC should ‘revisit their Protocol for Engagement to strengthen mutual understanding and reinforce adherence to agreed timetables.”
The SFC should also continue to highlight non-compliance with deadlines through public reporting.
However, The OECD said that the Commission “continues to stand out as a strong independent fiscal institution, comparing well to its peers in terms of its independence, analysis and communications.”
The Commission’s Chair, Professor Graeme Roy, said “I am grateful to the OECD for carrying out this review. It’s vital that we have an independent, external and international perspective on our work and on the fiscal challenges facing Scotland. I am delighted by OECD’s assessment of the Fiscal Commission and I look forward to reflecting on their recommendations with the Scottish Parliament and Government.”
This review follows up on the OECD first review in 2019. It is required by the Scottish Fiscal Commission Act and reflects best practice for independent fiscal institutions.
The review is published by the OECD and is also available on the Scottish Fiscal Commission website. It was co-authored by Scherie Nicol (OECD) and Eddie Casey (OECD and Irish Fiscal Advisory Council).
The Scottish Fiscal Commission is the independent fiscal institution for Scotland, established by the Scottish Fiscal Commission (2016) Act. Its statutory duty is to provide the independent and official forecasts of Scottish GDP, devolved tax revenue and devolved social security spending for the Scottish Government to use in its budget and financial planning.