Scrap Scotland's borrowing limits, report urges In a report released today, the National Institute for Economic and Social Research (NIESR) said that for Scotland's politicians to be fully accountable, they must be able to "take decisions on which they can succeed or fail." In a submission to the Smith Commission, which is considering proposals for further devolution to Scotland, NIESR recommended changing the Scottish Parliament's "near total dependence" on an annual block grant from Westminster. While NIESR acknowledged that "there is much to commend" about the system, it said that without having responsibility for taxes or borrowing finance, Holyrood "cannot be accountable to its electorate." "It is mostly tasked with spending an allocated amount of funding," added the report, labelling such an arrangement as "pocket money devolution." Currently, the Scottish Government can borrow £240m per year, and £2.2bn in total for capital spending - one hundredth of one per cent of the UK projected gross debt in 2015. But the report argued that such borrowing limits "will become highly problematic if significant tax raising powers are devolved," potentially forcing Holyrood to cut spending and raise taxes to balance its budget. NIESR also argued that the Scottish Government's ability to borrow in its own name would make devolving North Sea oil tax revenues "feasible" as Holyrood could "smooth out" fluctuations in volatile oil and gas income.