Devolved revenue grows faster than expenditure

The Scottish Government’s delivery of sustainable public finances is being supported by a rise in devolved revenue.

The 2024-25 Government Expenditure & Revenue Scotland statistics show Scotland’s £91.4 billion revenue was enough to cover all day-to-day devolved spending and all reserved social security, including the State Pension, which amounts to £84.9 billion.

Devolved revenue grew by 9.7% in 2024-25, as devolved expenditure increased by 6.8%. However, the report shows Scotland’s net fiscal balance worsening as oil and gas revenues fell.

Finance Secretary Shona Robison said:

“The decisions we have taken here in Scotland are helping support sustainable public finances. For the fourth year in a row, devolved revenues have grown faster than devolved expenditure.

“Scotland’s public finances are better than many other parts of the UK, with the third highest revenue per person in the UK, behind only London and the South East.

“The GERS statistics reflect only the current constitutional arrangements – of Scotland as part of the UK – and not an independent Scotland with its own policy, decisions on defence spending and the economy.

“GERS allocates Scotland a population share of reserved UK spending rather than accounting for real expenditure. For example, UK defence expenditure is listed as £5.1 billion, but only £2.1 billion was actually spent with industry in Scotland in 2023-24.

“Being taken out of the EU, against the will of the people of Scotland, has also hit Scotland’s revenues by £2.3 billion and the higher cost of UK government debt adds £500 million to the deficit.

“Falling oil prices and a decrease in extraction present challenges going forward, but we are clear in our support for a just transition for Scotland’s valued oil and gas sector, which recognises the maturity of the North Sea basin and is in line with our climate change commitments and energy security.”

Background

Government Expenditure & Revenue Scotland statistics 2024-25

Government Expenditure & Revenue Scotland statistics release 2024-25

The aim of GERS is to enhance public understanding of fiscal issues in Scotland. The primary objective is to estimate a set of public sector accounts for Scotland through detailed analysis of official UK and Scottish Government finance statistics. The report is designed to allow users to understand and analyse Scotland’s fiscal position under different scenarios within the current constitutional framework.

Country and regional public sector finances, UK - Office for National Statistics (ons.gov.uk)

MOD regional expenditure with industry 2023/24 - GOV.UK

Modelling by the National Institute of Economic and Social Research suggests that compared to EU membership, the UK economy is 2.5% smaller in 2023, and it expects this to increase to 5.7% by 2035. In Scotland, this equates to a cut in public revenues of around £2.3bn in 2023. (Source: Revisiting the effect of Brexit: NIESR: 16 Nov 2023).