ESTIMATED costs around the National Care Service Bill are “likely to significantly understate” the actual costs which could face the Scottish Government, Audit Scotland has said.
The independent body will give evidence on the financial memorandum of the bill on Tuesday, but has already raised a number of concerns in a written submission to the Finance and Public Administration Committee.
Last week, SNP MSPs on the committee tore into government officials as they criticised a lack of clarity within the document. Convener Kenneth Gibson said the policy seemed like a “sledgehammer to crack a nut”.
Meanwhile, the SNP’s Michelle Thomson said she was “surprised by the complete lack of fundamentals” in the financial memorandum and insisted she had no confidence in its accuracy.
The bill would centralise £4.3 billion of public spending – one third of Scottish councils’ total budget – and will aim to improve the consistency and quality of social care services.
A table within the financial memorandum shows wide-ranging estimates for the costs of bill provisions.
It states in 2022-23, the total estimated costs of bill provisions could be anything between £24 million and £36m, and there are even larger gaps projected for the following years.
Audit Scotland has said there are a number of costs associated with measures in the bill that are yet to be assessed and has insisted the overall cost of the measures will be “significantly above the amounts currently assessed”.
The written submission says: “There are a number of costs associated with the measures set out in the bill that have yet to be assessed.
“The Scottish Government has recognised this providing a broad description of the anticipated cost and the difficulty in assessing it at this stage.
“In some of these the potential for additional cost is significant and taken together it is likely that the overall cost of the measures will be significantly above the amounts currently assessed.
“In our view, the potential cost summarised are likely to significantly understate the margin of uncertainty and range of potential costs of the bill measures.”
Legislation to establish an NCS was published earlier this year, but ministers have stressed it is only a “framework”.
Audit Scotland has suggested the estimated costs do not thoroughly take into account changes and increasing volatility of inflation expectations and has laid out a number of areas where costs have not yet been assessed, which it says “have the potential to add significantly to the overall costs reported and are not currently reflected in the assessed margin of uncertainty.”
The submission added: “The inflation indices applied by the Scottish Government are set out in the last bullet of paragraph 30 [in the financial memorandum].
“These are taken from ONS [Office for National Statistics] publications but more recent information on actual and forecast inflation are well ahead of the assumptions used.
“There is significant uncertainty about the future path of overall inflation measures and how this translates to public sector pay and other costs, but in our view the margin of uncertainty in the figures is likely to be significantly understated as a result.”
Areas where costs have not been assessed include the cost of any national care boards, transition costs for local authorities and health boards, the impact of changes to VAT treatment, the impact of any change to pension scheme arrangements and the extent of potential changes to capital investment and maintenance costs.
Donna Bell, director of social care and National Care Service development, denied there were any issues with the way the bill had been developed when speaking to the committee last week and said risks were being taken into account.
