Definition of "fiscal transfer": FOI release

Information requested

The definition of “fiscal transfer” in the context of Neil Gray’s statement. On the 30th of March. And evidence corroborating his statement.

Response

The term “fiscal transfer” means moving money. Within the context of Mr Gray’s statement, it refers to the impact on the Scottish and UK Governments’ budgets following the change in employer National Insurance Contribution (eNICs) rates.

As Ministers have publicly noted Barnett consequential funding received by the Scottish Government for eNICs are anticipated to be significantly lower than the additional costs of the eNICs changes that the Scottish Government must pay to HMRC through PAYE.

As a consequence, there is a net transfer from the Scottish Government to the UK Government.

Final eNICs consequential figures will be formally confirmed at the upcoming UK Main Estimates and are anticipated to be around £340 million.

Estimated static costs as a result of UK employer NICs policy changes to the directly employed devolved Scottish public sector workforce are £535 million. Further details on the estimated costs to the Scottish Government can be found here: National Insurance Contributions: public sector costs - gov.scot

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