Ministers must be transparent on spending £755m ScotWind cash, says watchdog

The Scottish Government must tell the public how it will use the £755 million generated by the risky ScotWind project, a watchdog has said.

Audit Scotland said ministers must be much more transparent about how they will use the cash from the scheme that leased portions of the seabed to energy companies for the installation of offshore wind farms.

Opposition parties have accused the Government of selling Scotland’s seabed “on the cheap” and have attacked ministers over claims of secrecy.

Auditor General Stephen Boyle said the “high risk and reward” nature of ScotWind means it is yet to be seen whether it is good value for money.

ScotWind offered developers capped prices for parts of the seabed instead of going through an open auction in the aim of securing decades’ worth of lease payments, rather than maximising immediate returns.

Auditor General Stephen Boyle urged the Scottish Government to be more transparent. PA Media

But Audit Scotland said no single business case was ever made for the leasing round.

Ministers have already taken £96 million of ScotWind funds but the public spending watchdog said it is not clear how the money had been used to support the transition to net zero, “nor is it clear how the Scottish Government intends to use remaining ScotWind funds” worth £507 million “over the course of the Parliament”.

The Auditor General said: “Crown Estate Scotland and the Scottish Government took a high risk and reward approach to the ScotWind leasing round.

“Whether that decision represents value for money will be determined in the coming years.

“If developers sign long-term leases before their option periods end, then annual payments will continue to benefit Scotland for the next 60 years.

“However, if they give up their options, the capped option pricing model will result in limited wider economic benefits and substantially reduced public revenues.

“What is now important is that the Scottish Government is much more transparent about their plans for how the ScotWind funds will be used across this parliamentary term and beyond.”

Labour and the Liberal Democrats accused the Scottish Government of selling the nation’s seabed “on the cheap” while using the cash generated from it to “plug budget gaps”.

Daniel Johnson, Labour’s energy spokesman, said ScotWind was a “huge opportunity” for the economy and the energy industry, “but the SNP’s management has been shambolic from day one”.

First Minister John Swinney’s Government has been urged to spell out how it will spend the money generated by the ScotWind scheme. PA Media

He accused the SNP of “frittering away” ScotWind cash and urged the Government to “set out how it will put this money to good use”.

He added: “The SNP must deliver the transparency needed and ensure these funds help to unlock opportunities, jobs and growth across Scotland.”

Liam McArthur, the Lib Dem finance spokesman, said: “This report is rightly sceptical of how the Government has acted.

“If Scotland’s renewable energy wealth is truly to serve the Scottish public, the Government need to massively improve governance and transparency.

“Ministers should come to Parliament and set out a long-term plan for using ScotWind revenues and how these will ensure that taxpayers receive value for money when they are utilised.”

Conservative energy spokesman Liam Kerr said the report must be a “wake-up call” for ministers.

“It is typical of their aversion to transparency that independent auditors have now demanded they are much more open about their ScotWind programme,” he said.

“They have repeatedly used these funds to plug other gaps in Scotland’s finances which are facing a £5 billion black hole thanks to two decades of SNP economic mismanagement.

“John Swinney needs to be upfront about his plans otherwise his ScotWind Wealth Fund election pledge will look like another headline-grabbing policy that will not be delivered.”

But energy minister Stephen Gethins described the ScotWind scheme as a “success story” that is delivering jobs and investment across the country.

He said: “As the report from the public spending watchdog makes clear, ScotWind will bring in an estimated £80-110 million in annual income over the 60-year lifetime of the project, with the report also pointing to £29.1 billion of commitments so far in the wider supply chain.

“This vindicates the decision to focus on project delivery and attracting investment, rather than upfront revenues. This approach will help ensure sustainable economic value through future employment, energy security and public revenues.

“ScotWind was designed to secure long-term economic benefits for Scotland and this report makes clear that more than £755 million of fees have been generated from this opening leasing round alone.

“An additional £65 million has been collected from the Innovation and Targeted Oil & Gas renewables project and the funds have accrued interest of almost £100 million to date.

“I recognise the importance of providing clarity on how offshore wind revenues will be managed, and we will continue to do so through our annual budget setting process.

“This Government also remains committed to establishing a ScotWind Wealth Fund during this Parliament to ensure future generations benefit from Scotland’s renewables wealth.”