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Publication - Factsheet

Fiscal framework: factsheet

Last updated
20 October 2023 - see all updates
Part of
Money and tax, Public sector

Detailed information about the fiscal framework agreed between the Scottish and UK Governments.

The Scottish block grant continues to be calculated by the Barnett formula, but an adjustment needs to be made to reflect that some of the budget is now funded by Scottish tax revenues that were previously retained by the UK Government. There are two steps to the adjustment:

  1. An initial block grant deduction is made for each tax. This is to compensate the UK Government for the tax revenue which is now being retained by the Scottish Government. These adjustments ensure that the UK and Scottish Governments are no better or worse off as a direct result of devolution.
  2. For each subsequent year the block grant adjustments (BGAs) for each tax are grown or "indexed" to take account of changing tax revenue over time.

Contact

Email: ceu@gov.scot

First published
20 November 2017
Last updated
20 October 2023 - show all updates

  1. Multiple pages updated.

  2. Publications page updated with text and link to statement.

  3. Publications page updated with text and link to statement.

  4. Minor update to amend link to annex 'B' in Scottish Government’s Medium Term Financial Strategy.

  5. Added link to the Scottish Government’s Medium Term Financial Strategy.

  6. Added link to letter to the Chief Secretary to the Treasury regarding agreement in principle to commission an independent report on the Block Grant Adjustment arrangements on publications page.

  7. Added link to 22 July letter about the income tax reconciliation process and the provisional 2019-20 income tax reconciliation.

  8. Added link to 15 March letter about the BGAs for the Scottish Budget 2021-2022 on publications page.

  9. Updated following the Scottish Budget 2021-2022.

  10. Link to 23 December letter regarding fiscal powers and flexibility added to publications page.

  11. Link to 7 December letter regarding fiscal powers and flexibility added to publications page.

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