Thank you, convener. I wish the committee a happy new year.
I am presenting the report on the 2014-15 audit of the Scottish Police Authority under section 22 of the Public Finance and Accountability (Scotland) Act 2000. The year 2014-15 was the second year of operation for the SPA and Police Scotland, and the SPA’s accounts include Police Scotland’s financial results.
I highlight two issues to the committee. The first is the appointed auditor’s opinion on the SPA’s 2014-15 accounts. The accounts are unqualified, but for the second year running, Gilliam Woolman, whom I appoint to audit the accounts, has expressed a modified conclusion on those matters on which she is required to report by exception. She concluded that adequate accounting records had not been kept during 2014-15 for some aspects of property, plant and equipment.
Overall, the audit was very challenging to complete due to the poor quality of the unaudited accounts and major problems with information contained within the fixed asset register. In our experience of auditing public sector accounts, that is exceptional.
The second issue is the continued lack of a long-term financial strategy for policing in Scotland. I first recommended that the SPA and Police Scotland should develop and agree a financial strategy in November 2013. I drew the Parliament’s attention to the lack of progress last year in my section 22 report on the 2013-14 accounts, and I am doing so again now.
While some progress has been made, as detailed in the report, it has been slow. The SPA now plans to agree a long-term financial strategy for the next decade by the end of March 2016.
The Scottish Government’s draft budget for 2016-17 provides an increase in funding for the Scottish Police Authority. That will assist in meeting some of the immediate financial pressures, but it does not remove the need to continue to find savings and, in particular, to develop and agree a long-term strategy to secure the financial sustainability of policing.
Together, the SPA and Police Scotland represent one of our most important public services. In 2014-15, they spent more than £1.7 billion of public money and held assets valued at more than half a billion pounds. Collectively, they must provide stronger leadership for strategic and operational financial management if they are to put policing on to a sustainable basis for the future.
I will report to the Parliament again next year on the SPA’s progress in managing its finances, after the conclusion of the audit of the 2015-16 accounts.
Alongside me are Gillian Woolman, who audits the SPA’s accounts on my behalf, and Mark Roberts, who leads on policing and justice in Audit Scotland. As always, convener, we will do our best to answer questions from the committee.