Audit finds Scottish ministers used ScotWind cash to plug budget gaps; calls for clear long-term plan

# What happened

# Why it matters ScotWind was designed to lease parts of the seabed for offshore wind development and was pitched as a way to support Scotland's net-zero transition. Instead, a sizeable share of the one-off receipts has been routed into the regular budget. Auditors warn this practice creates a non-recurring base to start the budget year, which can weaken financial control and mask structural funding gaps.

# How the leases were structured The ScotWind leasing round generated £755 million in total. Rather than using an open auction to maximise immediate receipts, officials offered capped prices for the right to develop the seabed. That approach aimed to attract developers with the promise of longer-term lease payments, but Audit Scotland notes that no single business case was produced for that strategy.

# Audit concerns about value, transparency and governance Audit Scotland's report raises multiple concerns:

• Value for money is uncertain until it is clear how many ScotWind projects actually get constructed. The auditor general describes the approach as "high risk and reward."
• The 10-year agreements run until 2032, and the geographic footprint of ScotWind limits opportunities for subsequent larger leasing rounds.
• Using one-off ScotWind money to plug recurring budget items creates a reliance on non-recurring income and can weaken budgetary control across the organisation.
• Auditors call for transparency on the purpose and operation of a proposed ScotWind wealth fund, a promise in the SNP manifesto.

There are early signs of strain in the ScotWind pipeline. Shell has already returned a ScotWind lease, and supply chain delays have put the viability of some floating wind projects in doubt. Audit Scotland points out that until projects reach operation it is too early to know whether the capped-option approach delivered the expected long-term returns.

# Potential future revenues If proposed projects do become operational, Audit Scotland gives an estimate range: between £3 million and £4 million in rental income per GW per year. That projection remains conditional on projects being built and reaching sustained operation.

# What auditors want Audit Scotland has asked ministers to set out a long-term plan for ScotWind revenue use, to be clear about the proposed ScotWind wealth fund and to publish how the revenue stream will be managed. The report links current use of the receipts to wider fiscal-management challenges at Holyrood and asks for greater transparency around the initial leasing strategy and its rationale.

# Practical takeaway for readers ScotWind generated large, one-off receipts intended to support renewable development. Ministers have used those receipts to ease annual budget pressures. Auditors say that approach risks eroding budget discipline and that significant questions remain about whether the leasing method delivered value. The situation pivots on whether planned wind projects are delivered and on whether ministers publish a clear, long-term plan for managing and protecting the income stream.