7OCT

Holyrood booked £1.1bn of ScotWind draws

3 min read

12:52UTC

Audit Scotland found that Holyrood wrote £1.1bn of ScotWind fee drawdowns into three budgets from 2023-24 and reversed every one.

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EconomicDeveloping

Key takeaway

Holyrood planned £1.1bn of ScotWind draws across three budgets and reversed each one.

Audit Scotland reported on 17 September that the Scottish Government built a drawdown of offshore wind licence fees into three budgets in a row, £310m, £424m and £364m from 2023-24, and reversed each planned draw at the spring revision or year end⁠¹. The three plans came to £1.1bn. The 2026-27 budget assumes another £80m.

The fees come from ScotWind, the offshore wind seabed leasing round, and sit with Crown Estate Scotland, nearly all on 12-month deposits so ministers can reach them quickly. Crown Estate Scotland held £807.9m at the end of 2025-26. Ministers expect to draw a further £507m by 2031, leaving about £300m.

Audit Scotland warns that using one-off receipts to balance annual budgets can weaken spending control. Whitehall's own £10.3bn Defence Investment Plan also leans on one-off money: £3.5bn of it is asset sales and Treasury support. College funding in Scotland fell 7% in real terms from 2021, and five of the country's 19 incorporated colleges needed cash advances from the Scottish Funding Council in 2024-25, up from two⁠².

Deep Analysis

In plain English

ScotWind was a sale of rights to build offshore wind farms in Scottish waters. The companies that won paid fees. The money sits with Crown Estate Scotland, which manages the seabed. The Scottish Government has put planned withdrawals from that money into its budgets three times. Each time the money was not taken out in the end. Audit Scotland, the public spending watchdog, reported this on 17 September. The watchdog says relying on a one-off sum to balance yearly budgets can weaken control over spending. Meanwhile some Scottish colleges have needed cash advances to keep going.

Deep Analysis

Root Causes

Holyrood's powers create the pressure. Most funding arrives as a block grant from Westminster, borrowing for day-to-day spending is capped, so a lump of seabed leasing money looks like spare capacity.

The fees are paid to Crown Estate Scotland and held mostly on 12-month deposits so ministers can reach them quickly. A balance that can be drawn on at short notice is an easy source for a budget gap, even if the draw does not happen.

The reversal pattern has a mechanical cause: a budget assumes the draw to reach a balanced position, and at the spring revision or year end other lines underspend or receipts arrive, so the draw is cancelled.

What could happen next?

Risk
The 2026-27 assumption of £80m repeats a pattern in which three earlier assumed draws were reversed, so budget lines funded by it are exposed to the same reversal.
Precedent
A watchdog report naming a repeated budgeting pattern gives the Scottish Parliament's finance committee grounds to question assumptions in the next budget.

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: Scotland's 2013 independence white paper and later budgets leaned on North Sea oil revenue projections that fell short as the oil price dropped from 2014. The shared mechanism is a volatile, one-off resource built into recurring spending plans.

Counter-parallel: Norway's fiscal rule limits spending of its sovereign wealth fund oil revenue to about 3% of the fund's value a year, which keeps the receipts out of annual budget balancing. Scotland's draws are a different design, with ministers able to plan withdrawals year by year.

Immediate: planned draws of £310m, £424m and £364m total £1,098m across three years, against actual draws of zero (Audit Scotland, 17 September). The 2026-27 budget assumes £80m.

Structural: Crown Estate Scotland held £807.9m at the end of 2025-26. If ministers draw a further £507m by 2031, as they expect, about £300m remains, so the receipts are finite and fall behind recurring costs. Audit Scotland warns that using one-off receipts to balance annual budgets can weaken spending control, because recurring commitments continue after the money is spent.

College funding is the visible pressure: a 7% real-terms fall since 2021 led five of 19 incorporated colleges to need cash advances from the Scottish Funding Council in 2024-25, up from two.

Consensus view: Holyrood's budget is constrained by the block grant and limited borrowing powers, so one-off receipts are tempting as a balancing item. Audit Scotland found that three budgets assumed draws and each was reversed, which matches that pressure.

Counter-view: Audit Scotland itself reports that each planned draw was reversed at the spring revision or year end, which can be read as prudence as pressures shift, though it warns that one-off receipts can weaken spending control.

Key tension: Whether planned draws that vanish at year end are a sign of cautious budgeting or of budgets that depend on money that is never actually spent.

Sources:Audit Scotland·Audit Scotland

Mentions:Scottish Government →ScotWind →Scottish Funding Council →Holyrood →Norway →Whitehall →North Sea →Defence Investment Plan →Crown Estate Scotland →Scotland →Westminster →Audit Scotland →

First Reported In

Update #4 · £8.1bn over forecast, and the 30-year at 6%

Audit Scotland· 7 Oct 2026

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Different Perspectives

Conservative Party

Leader Kemi Badenoch said Labour will run out of money and proposed lifting defence to 3% of GDP, paid for from welfare. Shadow work and pensions secretary Helen Whately put those savings at £23bn, "just the start".

Reform UK

Treasury spokesman Robert Jenrick pledged £80bn a year of spending cuts by the end of the next parliament and claimed £30bn a year of interest savings. The Spectator judged that the sums still do not fully add up.

Centre for Policy Studies

The right-of-centre think tank argued on 4 October that Britain is not a low-tax country once workplace pensions and student-loan repayments are counted. Its comparison rests on 2019 data.

Institute of Economic Affairs

The free-market think tank argued on 28 September that alcohol, tobacco and landfill duties raised £5.2bn less than the OBR projected. That comparison is separate from the five-month borrowing overshoot.

Resolution Foundation

The centre-left think tank said on 8 September that about £1 in every £12 of public spending now goes on debt interest. In July it put headroom against the fiscal rules at about £10bn.

Audit Scotland

It reported on 17 September that three Scottish budgets planned ScotWind drawdowns and drew nothing each time. It warned that using one-off receipts to balance annual budgets can weaken spending control.