How can Scotland afford its public services?

• Public service reform in Scotland is becoming ever more urgent, as revenue and spending commitments part company. The auditor general is demanding a route map back to sustainable finances.

• His report highlights risks taken when government has tried to save firms from closure, an IT project going a long way over-budget, and an exceptionally expensive prosecution failure.

• A large part of the public accounts are missing, seven years after a promise they would be expanded to include the whole of government.

When you hear talk of public service "reform", what does that mean in practice? Changes to working hours and conditions to make civil servants' work more efficient or effective?

Making better use of facilities such as clinics into the evening and weekend? Joining services better, such as hospital discharges and social services at home.

Does it suggest you're going to face higher charges for services, or charges for services that used to be free?

It could be any of these, but by the end of the year, we may be looking more closely at the latter - at options for public services to boost the income they can raise from us, the public. In government-speak, "potential revenue-raising opportunities from public bodies".

That's one of the workstreams that gets a brief mention from the auditor general as he assesses the slow progress to get reform under way in reality, and not just the rhetoric.

Stephen Boyle and his predecessors at Audit Scotland have been banging on about this for some time.

This week, the message was as stark as the public spending watchdog could make it: "The delivery of public services in their current form is not affordable," he wrote.

There's an urgent need, he went on, for a route map to reform public services, so as to put them on a financially sustainable basis.

His is not a lone voice. We recently heard something similar from Holyrood's finance committee, which is all the more damning for having a government majority: "Affordability does not appear to be a key factor" in government decision-making processes, said the MSPs.

Ministers "missed opportunities" to reform Scotland's public services and there was "little evidence to suggest a shift away from a short-term approach to financial planning"

Ferry costs

The Auditor General's comments accompanied his audit report on the Scottish government accounts. It notes that there is now a civil service unit dedicated to identifying reforms and blockages to them.

It also notes that while the total budget topped the £50bn mark, the actual spend was just short of that.

A modest underspend doesn't cover the underlying problem - that total revenue is not matching the growth in the spending profile, and nor will it in the next few years. The gaps open up from £1bn to nearly £2bn by 2027, and without sufficient borrowing powers to plug that gap.

The two ferries still being built at Ferguson shipyard are more than three times over-budget

Some things being urged by Audit Scotland are being heeded. That includes the past observation that ministers are taking punts on private businesses in varying states of distress, without checking out the risks they're taking on There's now a unit to deal with such interventions "strategically".

A familiar list appears in the latest audit comments: more than £50m on BiFab fabrication yard; £52m on Prestwick Airport, though at least that seems to be worth about £12m now; £237m on building two ferries in Port Glasgow that are now being valued around £82m.

Venison and scrap

And then there's Lochaber aluminium smelter. Ministers secured a buyer when it faced closure in 2016. That buyer was Sanjeev Gupta and his GFG Alliance metals empire.

He had already stepped in to retain steel rolling in Motherwell. Near Fort William, he took on a big hydro plant, a huge Highland estate, its rain and deer-stalking potential, along with the aluminium smelter.

To sweeten the deal, Nicola Sturgeon's government agreed to a 25-year contract to guarantee a buyer for the power, if the business wasn't itself using it. This was for an annual fee, but with a liability to pay out up to £35m per year.

The Scottish government offered Sanjeev Gupta guarantees to persuade him to buy the UK's last remaining aluminium smelter at Lochaber

Mr Gupta's plans have not come to all that much. Fifty more jobs have been created, MSPs were told in summer. The dream of alloy wheel manufacturing has died, and it's mainly about scrap.

GFG Alliance is described by Audit Scotland as being at significant risk of financial instability, since its main source of funding, Greensill Capital, collapsed amid losses, scandal, a fraud investigation and the besmirched reputation of one of its lobbyists, David Cameron. Yes, the new foreign secretary.

Each year, a figure has to be put on the provision the Scottish government must put aside in case this insurance contract goes pear-shaped. It's not actual spending, but one measure of the risk taken. As of last March, it was up £21m to £135m.

And as for the GFG subsidiary in Lochaber, it hasn't filed company accounts due by the start of April. The last filing at Companies House was last year, with a letter of resignation by its auditors.

'Not fit for purpose'

Among the more eye-popping figures in the Scottish government account, revisited again by Audit Scotland, is the cost to the Crown Office and procurator fiscal service of legal action for wrongful prosecutions in connection with the financial collapse of Rangers Football Club.

So far, we're told, nearly £52m has been paid out in compensation, and more than £60m spent in total. Another £8.8m has been set aside for future settlements. It's odd how little of it has been explained.

We're promised an inquiry once all the litigation is complete. Some people may be content to see that dragged out and the inquiry delayed.

New computer systems for local government have tangled history, with many going over budget

Lots of governments find it hard to procure computers, and the Scottish government is no exception. A human resources IT project, we're told, is now behind schedule, and more than twice its original budget of £22m.

Yet other IT systems have faced underinvestment. They're "no longer fit for purpose", and a brake on efficiency.

Some of the toughest criticism is for the meta stuff of accountancy - how accounts are drawn up, and how outcomes are measured.

Stephen Boyle notes it is five years since the Scottish government introduced a performance framework with lots of outcomes to measure wellbeing.

That is now a focus of Humza Yousaf's administration. Yet five years on, the auditor general is concerned at the number of outcomes that are not being reported, so it's hard to see if spending is having the desired effect or not.

His frustrations extend to a wider devolved accounts for the whole of government in Scotland. That was promised seven years ago. Covid can take some of the blame, but that's a long time for the promise to make no apparent headway.

Without it, a lot of government activity is hard to account for, including borrowing, local government assets and borrowing, and public sector pension liabilities. That's quite a lot to be left unclear.