More than half of Scottish quangos fall foul of transparency law

Warning that lack of spending data is indicative of ‘culture of secrecy’

More than half of Scotland’s quangos have failed to meet their statutory obligations under legislation designed to promote greater transparency in the public sector by failing to report their spending data.

The final instalment of The Scotsman’s investigative series into the financial stewardship of the country’s sprawling network of quangos found that scores of organisations failed to disclose details of the money they had spent across key areas, such as overseas travel and hospitality, despite the fact it is a legal requirement.

The series has previously revealed how the heads of some organisations are receiving salaries in breach of the ceiling set out in the Scottish Government’s public sector pay strategy, while quangos across the country are spending more than £120 million on public relations and external consultancy costs at a time when public sector budgets remain under severe pressure.

Now, however, it can also be revealed that 66 quangos failed to meet their statutory obligations under legislation designed to promote transparency and accountability in the public sector by failing to report their spending data before being contacted by this newspaper.

Even after fielding multiple enquiries, some bodies refused to disclose the information on request. Several organisations initially claimed they were not subject to the legislation before performing a U-turn. Others, which have not provided expenditure figures for more than a decade, said they no longer published them.

Under the Public Services Reform (Scotland) Act 2010 (PSR), listed public bodies are required to publish, as soon as as reasonably practicable after the end of each financial year, a statement of any expenditure they have incurred during that financial year on or in connection with public relations, overseas travel, hospitality and entertainment, and external consultancy.

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Scotland's quangos are under scrutiny

The government’s guidance states that the statutory duties to publish information imposed by sections 31 and 32 of the law are “strict,” and are not subject to any exemptions. But more than a decade after the PSR legislation came into force, it is not being followed. While 45 quangos had proactively published the spending data for 2022/23 online, they were in the minority. Some 31 organisations had no information available at all, including the Scottish Environment Protection Agency, the Scottish Funding Council, and Skills Development Scotland.

Four health boards had no information accessible, with the same true of several key executive agencies, including Education Scotland, and bodies such as the Scottish National Investment Bank and the Scottish Ambulance Service.

Some 35 quangos had only out-of-date data available. In some cases, the spending records dated well over a decade. NHS Education for Scotland, a major health quango with a budget of more than half a million pounds, had not published any spending information in line with the PSR requirements since 2012/13. The latest spending disclosures from some health boards went back to 2015/16.

While the vast majority of the 114 public bodies subject to the PSR requirements went on to provide The Scotsman with the spending records upon request, the wildly inconsistent nature of their responses reveals the slipshod manner in which the legislation is being followed.

Highlands and Islands Airports is one of several quangos that failed to provide any spending information, despite being legally required to do so.

One organisation, National Records of Scotland, which has failed to publish its PSR spending since 2019/20, but claimed to have spent nothing at all on public relations, overseas travel, external consultancy, or hospitality and entertainment in 2022/23, repeatedly declined to address a series of questions concerning its PSR obligations, and referred to its annual report and accounts, which do not include detailed expenditure records in line with the legislation.

Other quangos that failed to reveal their spending said there were other factors involved. Highlands and Islands Airports Ltd, an executive non-departmental public body, blamed it on an “administrative oversight” following a change in its accounting platform, while Crown Estate Scotland, a public corporation, said staff shortages had impacted on its usual publication timetable, and the data would be made public “within the next three months.”

In some cases, notable public bodies erroneously claimed they were not subject to the duties of the PSR legislation, before later releasing the data. They included the Scottish Fire and Rescue Service, which put the initial oversight down to an “administrative error.” Several other bodies initially wrongly claimed that some, or all, of the information could only be released via freedom of information legislation. They included NHS Education for Scotland, David MacBrayne, and NHS Shetland.

The Scottish Conservative shadow finance secretary, Liz Smith, said: “Hard-pressed Scots will be concerned at such a lack of transparency from many high-profile public bodies. At a time when they are paying more and getting less due to the SNP’s disastrous tax-and-axe budget, they deserve to know how their money is being spent.

Scores of quangos have fallen foul of legislation designed to improve transparency in the public sector, The Scotsman's investigation has found.

“It shouldn’t have to take investigative journalism for many public-facing organisations to be upfront about their level of spending, which will only fuel people’s suspicions about what they have to hide.”

Scottish Labour’s finance spokesman, Michael Marra, said taxpayers should be able to trust that money is being spent “wisely” at a time when many frontline services are being “cut to the bone.”

He added: “Public bodies should be upholding the highest standards of financial transparency and openness. The government should be leading by example and holding bodies to account, but there is a corrosive culture of secrecy and financial mismanagement at the heart of this SNP government.”

An Audit Scotland spokesman said: “The publication and accessibility of information about this spending is an important part of ensuring transparency and in supporting citizens’ confidence in how public money is used. We would expect all public bodies to comply with the relevant laws and regulations, both as a statutory requirement and to demonstrate openness and accountability.”

A Scottish Government spokesman said: “Publishing spending details is a matter for individual public bodies. The Scottish Government expects those bodies listed in the legislation to comply with the requirements set out in the Public Services Reform (Scotland) Act 2010.”