Publication - Progress report

Fiscal framework: outturn report

Published: 20 Sep 2018
Directorate:
Financial Strategy Directorate
Part of:
Money and tax, Public sector
ISBN:
9781787811898

The first Fiscal Framework Outturn Report forms part of a revised budget process – as recommended by the final report of the Budget Process Review Group - and follows on from May’s publication of Scotland’s Fiscal Outlook: The Scottish Government’s Five Year Financial Strategy.

33 page PDF

5.6 MB

33 page PDF

5.6 MB

Contents
Fiscal framework: outturn report
Footnotes

33 page PDF

5.6 MB

Footnotes

1 http://www.parliament.scot/S5_Finance/Reports/BPRG_-_Final_Report_30.06.17.pdf

2 https://www.gov.scot/Topics/Government/Finance/fiscal-framework

3 Responsibility for Discretionary Housing Payments was passed to the Scottish Government from April 2017, and these are administered through Local Authorities.

4 This means that the Barnett formula only applies to the additional spending each year and not to the total Block Grant.

5 After the 2014 Scottish independence referendum, the Smith Commission made recommendations for the further devolution of powers to the Scottish Parliament.

6 http://webarchive.nationalarchives.gov.uk/20151202171029/http://www.smith-commission.scot/wp-content/uploads/2014/11/The_Smith_Commission_Report-1.pdf

7 Non-Domestic Rates also form part of the funding arrangements, together with other revenue raising powers (including fees, charges and sales of goods, services and assets), grants from the European institutions and borrowing.

8 Equivalent procedures will apply to social security Block Grant additions.

9 The Comparable Model is calculated based on Scotland’s population share of the cash change in corresponding UKG receipts and multiplied by a comparability factor.

10 http://www.fiscalcommission.scot/

11 http://obr.uk/

12 The baseline for Stamp Duty Land Tax was reduced by £20 million to account for the forestalling estimated to have occurred before the tax devolved to Scottish Parliament.

13 Revenue for the fully devolved taxes collected in-year by Revenue Scotland is already taken account of within the year. The corresponding Block Grant Adjustment is reconciled when the relevant UK outturn data for the year is available.

14 For 2017-18, the Scottish Government was the official forecaster of Scottish income tax receipts. The independent SFC found our forecasts to be reasonable.

15 Latest forecasts presented in the Medium Term Financial Strategy, /publications/scotlands-fiscal-outlook-scottish-governments-five-year-financial-strategy/downloads

16 http://www.fiscalcommission.scot/publications/forecast-evaluation-reports/forecast-evaluation-report-september-2018/

17 This reports uses 2017-18 outturn data for the Fully Devolved Taxes which will be published as part of Revenue Scotland’s Annual Accounts in October 2018.

18 Block Grant Adjustments for social security will work to similar timescales and principles as the fully devolved tax Block Grant Adjustments. This is because payments for social security benefits will be made ‘in-year’ in the same way the fully devolved taxes will be collected in-year. The one key difference is that the social security Block Grant Adjustments will be additions to the Block Grant, rather than deductions.

19 As well as this reconciliation, the UK Autumn Budget will determine the 2019-20 Block Grant on the basis of the UK Government’s spending decisions as well as the BGAs that will be applied to the 2019-20 Block Grant. The BGAs are derived from the OBR forecast that are produced for the Budget. Additionally, the OBR forecast for the UK Autumn Budget will provide the basis for the BGA update of the fully devolved taxes for the tax year 2018-19, which will be managed by the Scottish Government within the current tax year.

20 If a shock were triggered, the Scottish Government would be able to borrow for any shortfall in outturn revenues, even if they relate to financial years prior to the shock period. For example, if a shock were triggered based on 2019-20 GDP data, the Scottish Government would be allowed to borrow to cover a shortfalls in both 2018-19 and 2017-18 tax revenues. It would not have to wait until outturn data for 19-20 revenues were available to use the economic shock borrowing provisions.


Contact

Finance.Co-ordination@gov.scot