By stewartb

The eye-watering scale of the maintenance backlog associated with UK government  property is exposed in a new report from the National Audit Office (NAO). A figure of £30.5 billion is identified as the scale of the backlog associated just with properties used in the delivery of devolved public services in England (some in Wales).

Source: NAO (January 22, 2025) Maintaining public service facilities. Cross-Government Report, HC 544 (https://www.nao.org.uk/wp-content/uploads/2025/01/maintaining-public-service-facilities.pdf ).

When decisions by Westminster/Whitehall to neglect basic property maintenance in England result in budget numbers on this scale, the possible negative consequences for Scotland’s own public finances should merit public concern. Have UK government decisions to under-resource basic building maintenance in England on the scale of £billions led to a negative budgetary impact on Scotland?

Taken at face value, if Westminster/Whitehall had spent the additional £30.5 billion required to maintain its property in a decent state, the consequential (additional) input to the Scottish Government budget could have amounted to c.£3.0 billion. For perspective, the Fraser of Allander Institute recently (November 21, 2024) commented on an uplift in Barnett consequentials resulting from Westminster’s October 2024 budget: it stated that an uplift of (just!) £1.4 billion is ‘significant’ for Scotland’s public finances!

UK governments neglecting the basics

The NAO report – ‘Maintaining public service facilities’ – focuses on the condition of properties that the UK government uses: (a) to deliver services to the public, and (b) to support the government’s own operations. These include properties used in the delivery of devolved public services such as the NHS, school education, courts and prison services. It is important to note that the NAO’s analysis excludes the property of the devolved administrations and local government offices (NAO’s para 6).

Overall, the NAO (para 11) calculates that the UK government’s maintenance backlog has ‘increased steadily in recent years and is now at least £49 billion (as of as of October 2024). This equates to approximately 4% of the government’s total expenditure in 2023-24, or around £710 for each person living in the UK (based on mid-2023 population estimates).’ The higher figure of £49 billion includes properties used in delivery of reserved matters such as those undertaken by the MoD.

The NAO also notes the Office of Government Property’s estimate that the actual cost of remediation (i.e. ‘the real cost of repairs to improve property condition, rather than simply maintaining it’) may be substantially higher, in some cases 10 times higher.

The report explains (para 1.12) that the ‘maintenance backlog’ is defined as the value of work that has not been carried out or has been deferred when maintaining assets: ‘It includes the cost of works that should already have taken place and excludes the cost of works that will be required in the future’. Moreover, it notes the Cabinet Office estimate that deferring backlog maintenance can multiply costs by over 1.5 times over a two- to four-year period.

UK government maintenance backlog and devolved services The following chart (the NAO’s Figure 5) reports the scale of the maintenance backlog accumulated by Westminster governments over recent years.

Therefore, the scale of the maintenance backlog specifically for properties in the Westminster government’s portfolio which are: (a) within the scope of this NAO investigation, and also (b) associated specifically with devolved public services is as follows:

• Schools = £13.8 billion
• Hospitals and other NHS England sites = £13.8 billion
• Prisons and probation = £1.8 billion
• Courts and tribunals = £1.1 billion
• TOTAL = £30.5 billion

The NAO graph below shows how the NHS England-related backlog has increased steadily and substantially in the period since 2014-15.

Implications for Scotland?

Why has this backlog accumulated and what consequences may there be for the Scottish Government’s ‘Block Grant’? It depends! Candidly, some speculation is required here because within-Whitehall departmental decisions on operational matters are not readily available.

However, the NAO report offers some clues. It explains (paras 14 and 15) that:

• ‘Government organisations operate with annual maintenance budgets and are not allowed to transfer unspent funds to the following year’
• ‘organisations do not usually make long‑term plans as they only have funding certainty for the current spending review period’
• and most significantly: ’Government organisations told us that maintenance funding has often been significantly lower than the amounts they estimated they need, ..’.

The NAO provides this illustrative case (see its Figure 8):

HM Prison and Probation Service (HMPPS): ‘HMPPS estimated in September 2024 that it would cost £2.8 billion over the next five years to bring prisons into a fair condition, defined as operationally safe and exhibiting only minor deterioration. This would mean more than doubling its current annual expenditure on maintenance. In Phase 1 of Spending Review 2025, the government awarded £220 million in prison and probation maintenance in 2024-25 and up to £300 million in 2025-26.’

To the extent that Whitehall departments have been under-resourced following a Westminster government spending review, budget or other fiscal event to undertake adequate maintenance of their property estate, there may have been a commensurate and substantial knock-on effect limiting the uplift of the Scottish Government’s Block Grant.

There is a case to be made that successive Westminster governments have under-resourced those Whitehall departments engaged in the delivery of devolved public services in England. Specifically, on the maintenance of the property portfolios in England (together with Wales for courts and prisons), the NAO is identifying a shortfall amounting to at least £30.5 billion. If Whitehall departments had received additional funding (uplifts to their ‘Departmental Expenditure Limits’) in order to eradicate their maintenance backlog, close to 10% of any such increase would have resulted in a boost to Scotland’s ‘Block Grant’.

End note

Recent history suggests that Unionist opposition parties in Holyrood and the mainstream news media that aggregates and amplifies their views, scour reports from Audit Scotland in search of negatives – for a phrase in the text or in a quote from the Auditor General that can be turned into an ‘attack line’ at FMQs and/or an ‘impactful’ front-page headline.

In contrast, political and media interest in Scotland in the equivalent output of the NAO,  which holds government in Westminster/Whitehall to account, is negligible: the work of the NAO rarely – perhaps never – figures in news coverage aimed at a Scottish audience.

This is despite the scope of the NAO’s work having relevance: (a) to all those in Scotland paying ‘reserved’ taxes to the UK government; (b) to all those in Scotland reliant on public services and actions reserved to Westminster; and (c) to all those in Scotland impacted   by the scale of Scottish Government spending, influenced as it Is by revisions to the so-called ‘Block Grant’ which in turn is based on Westminster spending decisions reflecting what it judges ‘England’ needs and wants.