The Scottish Government’s 10-year economic strategy currently lacks political leadership and clear targets, according to a scathing report released this morning.

Audit Scotland has warned that that if Humza Yousaf and his SNP-Green administration do not achieve improved economic performance, there will be "further pressure on Scotland’s public finances".

And in a further blow to the business credentials of the government, Audit Scotland said that the lack of detail in the ten-year strategy “creates a risk to financial management and public accountability”.

A “delivery board” for the National Strategy for Economic Transformation (NSET) - unveiled by Kate Forbes two years ago - has still not been set up almost two years after the project was launched.

Key findings

In a report, Audit Scotland said that key aims, such as identifying what percentages of new business should be expected to survive beyond three years, had not been identified under the plans.

It added that the economic strategy “currently lacks collective political leadership and clear targets”.

Scotland is a small open economy with a GDP of £187.3billion in 2022. There were around 341,000 businesses in Scotland in March 2023, most of which are small- and medium-size enterprises. The emerging and growth sectors, such as digital, green technology and energy, and health sciences provide opportunities for growth and transformation for Scotland’s economy.

The report highlights slow GDP growth over the last decade, with only 1.5% average annual growth between 2000 and 2019 followed by substantial fluctuation during the Covid-19 economic shock.

Scotland’s productivity has remained ranked 16 out of 38 comparator economies over the last decade, it says, demonstrating no progress on the Scottish Government’s target to improve Scotland’s relative performance


Sir Tom Hunter, the billionaire investor and philanthropist, said that the analysis was “spot on” and told The Times he was “very worried” about individuals and businesses leaving Scotland because the country has become “less attractive to them” under the SNP’s tax regime.

“The fact the recent budget prioritised cutting the enterprise budget leaves you asking which magic wand does this government expect economic growth to come from,” he said.

“Moreover, the point Audit Scotland make about joined-up thinking across government could not be more emphatically emphasised by that same budget. On the one hand increase taxes for ‘high earners’, on the other subsidise those same earners by freezing council tax.”

Stephen Boyle, Auditor General for Scotland, said: “Making the shift to a wellbeing economy whilst also increasing tax revenue is a substantial challenge.

“Collective political leadership remains vital, and the government needs to better understand the cost and affordability of its plans so it can prioritise spending decisions.

“This is especially important at a time of continued pressure on public finances.”

Government response

Audit Scotland’s concerns follow criticism from the Institute for Fiscal Studies which said the recent budget had given “misleading impression” of the funding available for the health service, councils, and many other services.

Finance Secretary Shona Robison will face MSPs at Holyrood today for a debate on the budget, and will argue that it delivers funding “to tackle poverty and support public services in the face of a deeply challenging financial situation”.

Responding to today's Audit Scotland report, a spokesman for Scottish Government pledged that the strategy would be “refreshed and updated” and promised that the work would address the concerns raised by the auditor general.

He added: “As we approach the strategy’s two-year anniversary, the Scottish government recognises that much has changed fiscally, politically and internationally.

“In light of this, NSET will be refreshed and updated, addressing the key recommendations of this review by Audit Scotland, which includes revisiting governance to ensure the strategy continues to provide robust oversight.

“The refresh will reflect delivery of existing priorities but also new opportunities and progress against New Deal for Business recommendations, the Withers Review and the Green Industrial Strategy.”

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