The Scottish Government must move beyond making short-term savings to balance its budget, and urgently reform to address the public sector’s unsustainable finances.

There has not been enough progress made in reforming public services over the past year. Public sector budget shortfalls of more than £1 billion are forecast, and repayments on borrowing continue to grow. The Scottish Government needs to urgently reform, including looking at the size and structure of the public sector workforce.

Colin Crosby OBE has been appointed as the new chair of Audit Scotland's Board from early October 2024.

Councils have been transforming how they operate and deliver services for many years.

Now reform is increasingly urgent – councils have never faced such acute challenges, putting budgets and workforce under severe stretch and strain. Councils and key partners must significantly increase the pace and scale of major changes if they are to protect vital public services.

Clackmannanshire Council has demonstrated continuous improvement on key areas over the last five years. These include community engagement, addressing climate change and setting priorities. But the council must now urgently address its financial situation.

Like many councils across Scotland, Clackmannanshire is facing significant financial pressures, and needs to make £22 million of savings by 2026/27. Whilst it has made savings in the past, this has depended on reserves and one-off savings, an approach that cannot continue.

Scotland’s colleges need more clarity from ministers on what parts of their role to prioritise, as the sector’s financial challenges mount.

Scottish Government funding for colleges reduced by £32.7 million in cash terms in 2024/25. Funding has reduced by 17 per cent in real terms since 2021/22. Cash balances held by colleges are also forecast to fall.

Renfrewshire Council has taken action to rebuild the trust of local people following its significant failings in providing school accommodation for Dargavel Village. But concerns remain about a lack of transparency over the potential impacts on finances and services as the council must now fund an expansion of school provision there.

It will cost an estimated £60 million to rectify the failings of the Dargavel school project. The council now needs to develop a financial plan that sets out actions to mitigate the additional costs and be clear on the wider impacts on services.