The Scottish Government’s Rural Affairs and Islands' budget was underspent to the tune of £72m, according to an Audit Scotland report.

From a total rural budget of £948m, the Scottish Government spent £876m on schemes such as the basic payment scheme, beef calf scheme and agri-environment support, with the main areas of underspend in the Agricultural Transformation Fund, Less Favoured Area Support Scheme, and the Food Processing, Marketing and Co-operation Grant Scheme (FPMC).

The Scottish Government responded that there was a ‘lower than anticipated demand for these demand-led schemes’. There was also a significant underspend on the RAI Capital Expenditure related to carryover from the Agriculture Transformation (Programme) Fund budget which was not spent in 2021-22 as the impact of Covid-19 made it difficult to progress a loans scheme for capital projects.

A Scottish Government spokesperson said: “In 2021-22, the Scottish Government allocated close to £1bn in its budget to support stability across the rural economy and help some of our most fragile rural, coastal and island communities withstand the shocks caused Brexit and the Covid-19 pandemic.

“Despite the challenging fiscal environment we face, the Scottish Government sought to protect the rural budget in the coming years – particularly because rural communities have a central role to play in our plans to tackle the twin crises of climate change and biodiversity loss. We also remain committed to supporting investment in the transformation of agriculture and farming.

“A significant proportion of the Rural Affairs and Islands budget is allocated through demand-led schemes. As exact demand varies year-on-year, occasionally underspend can occur. Where underspend occurred in the 2021-22 financial year, it was diverted towards other Government priorities – such as protecting people from the impacts of the cost of living crisis. ”

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Scottish Conservative shadow rural affairs secretary, Rachael Hamilton, said: "Yet again our rural communities are being shamefully short-changed by the SNP-Green government. It exposes the harsh reality for our rural and island areas that this is a government who consistently ignores them and fails to understand their needs.

“Rural and island residents and businesses are facing huge and unique challenges right now but are being let down by ministers who are simply not on their side. There are serious questions for ministers to answer as to why these millions have not been diverted to supporting the economy in rural and island areas.

“They have a record sum of money at their disposal from the UK Government, so why has it not been used to spend this budget in full? It is typical of this SNP-Green government who are failing to deliver lifeline ferries, have delayed superfast broadband for years and have still not outlined what future agricultural policy will look like.”

Scottish Liberal Democrat agriculture spokesperson, Claire McLaren, added: “This underspend is a damning indictment of the government’s scant regard for the agricultural industry. It is unacceptable, especially when the default economic position of the SNP/Green administration is to plead poverty.

“The farming community has waited for a new agricultural policy which is now long overdue. That delay has held back critical investment, preventing the industry from future-proofing itself. The government’s appalling lack of deliverance puts immense pressure on generational businesses, even pushing some to contemplate exiting the industry."