Fiscal framework: factsheet

The Fiscal Framework gives us additional access to borrowing powers from 1 April 2017 to ensure budgetary stability and manage the volatility associated with greater revenue-raising powers.

Under the revised Fiscal Framework, we have the power to borrow up to £600 million each year for resource borrowing within a statutory overall limit of £1.75 billion. Resource borrowing can be accessed for two distinct purposes: in-year cash management  and forecast errors, with a combined annual limit of £600 million. Both the annual and cumulative borrowing limits will be maintained in real terms going forward. Resource borrowing cannot be accessed to generally increase the resource budget.

Previously, the Fiscal Framework had a provision for a Scotland Specific Economic Shock. This was removed as a result of the 2023 review, as such a scenario is now accounted for by improved resource borrowing powers (from £300 million to £600 million).

All resource borrowing would be accessed from the National Loans Fund and the term would be flexible within three to five years at the discretion of Scottish Ministers. 

The Fiscal Framework gives us access to additional capital borrowing powers to invest in infrastructure in Scotland and so improve economic performance. These are subject to different limits and conditions as set out in the Fiscal Framework. The capital borrowing aggregate limit has been increased to £3 billion (from £2.2 billion), and will be maintained at £3bn in 2023-24 prices.  The annual limit will now be maintained at £450m a year in 2023-24 prices, with both limits being uprated annually.

Terms of borrowing from the National Loans Fund are set out in Capital Borrowing Loan and Resource Borrowing Loan facility agreements.