Humza Yousaf's proposals are designed to win confidence in financial markets if Scotland becomes independent. Photo: Andrew Milligan/PA
Civil servants could try to block the Scottish National Party's plan to sell Scottish bonds on international markets over concerns it would waste taxpayers' money.
Experts say it is likely that Humza Yousaf will press ahead with his proposals, aimed at establishing confidence in financial markets if Scotland becomes independent, they will break normal rules on public spending as the Scottish government might instead choose to borrow money through the Treasury at much lower rates.
It is argued that if it decides to go it alone and at higher costs, it will amount to wasting taxpayers' money for purely political purposes.
Jim Gallagher, a former civil servant who served as full-time secretary to two Scottish ministers, said the power to issue bonds to borrow directly from markets had existed for «a decade or more».
The reason it was never used, he said, was because it therefore «never made any sense» because of the extra costs it would entail.
«We don't know how much it will be more expensive because it has never been tried, but the premium could be significant,” said Professor Gallagher, who is now an academic and director of Gordon Brown's Our Scottish Future think tank. .
“This proposal is clearly aimed at building a credit record that can be used by some future independent Scottish government. It is unlikely that this will be a good use of taxpayers' money.»
«The most ambitious proposal yet»
Although SNP ministers could ignore objections from civil servants that they should have raised formally, they have previously been reluctant to do so.
So-called «ministerial guidance», in which ministers press ahead with spending plans despite warnings from officials that they are inappropriate or of poor value, have been published under the SNP only twice in 15 years.
This week Mr Yousaf described his bond plan as the «Scottish Government's most ambitious proposal yet», saying it would give Scotland «the first time it can tap directly into the international bond market on its own».
He said the money raised would help build affordable housing.
However, more money will be available for public spending if it goes the traditional route, with the Treasury borrowing money on behalf of Scotland with cheaper repayments. expenses.
Mr Yousaf added a caveat to his speech, saying his promise to issue bonds would be subject to “due diligence and market testing.”
Professor Gallagher added: “If ministers insisted on this, although it has no [good] value, officials would have to give ministerial instructions because it would essentially be wasting money for political purposes.»
< p>“It will be the duty of the Permanent Secretary as Accountant General to state this.”
“The latest nationalist stunt”
The last instance of a ministerial order issued by a Scottish National Party minister occurred in May, when Neil Gray, the Welfare Economics Minister Scotland, ordered the ferry to be completed behind schedule and over budget, even though it was cheaper to scrap it and build a new one elsewhere. .
The only other instance occurred in 2007, shortly after the Scottish National Party came to power, when it ordered the private finance initiative procurement process for a new prison to be scrapped.
Liz Smith, Scotland's shadow finance minister, said: «It appears that the announcement of the conference was premature and there are few details yet about this latest nationalist stunt.»
«Given how the SNP has repeatedly wasted taxpayers' money, the public will want strong assurances about the use of these bonds.»
A Scottish Government spokesman said the bonds were “an excellent opportunity to raise Scotland's profile and continue to develop engagement with international investors.”
< p>He added: “To ensure sustainable and smart budget decisions continue to be made, the First Minister has commissioned an examination of next steps.»
«This will require rigorous due diligence processes, including a full consideration of value for money.»
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