Audit Scotland report says £26 billion Scottish Government infrastructure plans – including A9 dualling and the creation of a new Highland prison – are no longer affordable

Scottish Government investment plans – including dualling the A9 and creating a new prison in Inverness – are no longer affordable, according to a major new watchdog report.

An Audit Scotland briefing paper made it clear Holyrood ministers were not expected to be able to fulfil all of £26 billion worth of investment pledges.

The Investing in Scotland’s Infrastructure report found that higher costs, increased maintenance needs and reduced budgets would force ministers to reassess public spending priorities.

The report author, Scotland's Auditor General Stephen Boyle, warned that the devolved administration was facing “a challenging combination of reducing capital budgets, higher costs and increasing maintenance requirements” and faced “difficult decisions” in prioritising capital spending.

And the report warned that the Scottish Government would no longer be able to deliver all of its planned investment, or its ambition to double spending on maintenance.

Mr Boyle stated: “This will affect its ability to provide services now and in the future.”

Giving examples of specific budget areas affected, promises to upgrade the A9 and create the first new prison in the Highlands for more than a century were itemised in the report.

In relation to the delayed dualling of the A9 between Perth and Inverness by 2025, at a 2011 estimate of £3 billion, the auditor general said: “In February 2023, the then transport minister confirmed that the target will not be met.

“So far 11 miles out of 77 have been completed at a cost of £430 million. The Scottish Government repeated its commitment to the project in its 2023 programme for government.

“It has relaunched the procurement for the Tomatin to Moy segment and will set out a revised timescale to dual the road in the autumn.”

On the HMP Highland project, the report cited a cost increase and delay, stating: “In December 2022, projected costs had risen to £140 million from an initially expected range of £98 million to £110 million.

“The prison is now expected to be operational in June 2025, not 2024 as detailed in the OBC (outline business case).”

The report also noted that the government would face "extreme" challenges when adapting existing public buildings to meet net zero environmental targets.

Mr Boyle said: “Scottish government spending decisions on infrastructure will affect public services, and ministers need to be transparent about how they are made."

He added that the government needed better data on its infrastructure in order to inform its planning, including better information on the condition, occupancy and cost of the wider public estate.

The report raised "significant concern" over the condition of the prison estate.

A combination of reduced budgets, higher costs and increased maintenance requirements have left ministers with difficult decisions to make on what to fund.

Once inflation has been taken into account, ministers anticipate a seven per cent cut in real terms in the funding the Scottish government receives from the UK government for capital projects between 2023 and 2028.

This is compounded by increasing construction costs just as budgets are expected to decrease.

The rise in cost of 45 Scottish government infrastructure projects between December 2022 and June 2023 was expected to total at least £55m, the report said.

It also noted that almost a third of NHS buildings in Scotland are over 50 years old, with a maintenance backlog totalling £1.1bn worth of works.

The report also raised "significant concern" over the continued use of prisons built in the Victorian era.

"The Scottish government will need to understand and deal with backlog maintenance as well as investing in new infrastructure," the report said. "If it does not do this, it runs the risk of service interruptions and larger investments being needed in the future."

Deputy First Minister Shona Robison said the Scottish government was "firmly committed to infrastructure investment" to deliver high-quality public services.

She added: "The challenging economic conditions of the last few years resulting from Brexit and high inflation, as well as the real-terms fall in the capital grant allocation from the UK government, have led to delays for some infrastructure projects.

"Looking ahead we are having to prioritise projects and programmes so the capital spending available is targeted.”

Murdo Fraser, business and economic growth spokesman for the Scottish Tories, said the report was a "damning indictment" of SNP finance mishandling.

Labour economy spokesperson Daniel Johnson said: "Ministers must listen to the warnings in this damning report and come clean with the public about their plans.

Willie Rennie, economy spokesman for the Scottish Liberal Democrats, said: "By failing to grow the economy, ministers have left less money for investment in critical infrastructure, which in turn only worsens economic performance."