We are responsible for deciding how public money will be spent each year, and we publish these spending plans in the annual Scottish Budget.
Our approaches to taxation and spending support our central purpose of achieving sustainable economic growth.
We manage public finance by:
- setting the annual Scottish budget, worth £41 billion in 2018 to 2019
- investing in infrastructure to support business and communities
- producing financial reports and accounts to ensure transparency
- defining the policy and legislation for taxes paid in Scotland
- issuing the Scottish Public Finance Manual to provide guidance on the proper handling and reporting of public funds
The money that central government has to spend, collectively called the Scottish Consolidated Fund, comes from the following sources:
- block grant from the UK Government
- EU funds
- Scottish income tax (collected by HMRC)
- non-domestic rates (collected by local authorities and redistributed by us)
- devolved taxes (collected by Revenue Scotland)
Council tax is not included as it is both collected and spent by local government.
We publish the Scottish Consolidated Fund Accounts every year.
The block grant includes money the UK government has raised through fuel duty, oil and gas receipts, income tax, national insurance, corporation tax, air passenger duty, VAT, tax on alcohol and cigarettes, inheritance tax, and capital gains tax.
The amount each year is calculated as a population share of changes in spending on public services devolved to Scotland. This is called the Barnett Formula.
For all taxes set, raised or assigned in Scotland, the block grant is reduced.
Find more information in our fiscal framework factsheet.
Scottish Fiscal Commission
We set up the Scottish Fiscal Commission in 2014 to scrutinise our devolved tax forecasts. It is responsible for producing independent forecasts for Scotland, including forecasts of tax revenues, expenditure on social security, and onshore Gross Domestic Product (GDP).
Find more information on the Scottish Fiscal Commission website.
Scottish Public Finance Manual
The Scottish Public Finance Manual (SPFM) is issued by Scottish Ministers to provide guidance for government and other relevant bodies on the proper handling and reporting of public funds.
The SPFM sets out the relevant statutory, parliamentary and administrative requirements, emphasises the need for economy, efficiency and effectiveness, and promotes good practice and high standards of propriety.
Bills and legislation
All of the annual Budget (Scotland) Acts to date are on legislation.gov.uk. The Amendment Regulations that follow each annual Act are usually referred to as the the Autumn and Spring Budget Revisions.