Government Expenditure and Revenue Scotland (GERS): detailed methodology 2024-25

Scottish Government expenditure in GERS is provided by the Scottish Government Directorate for Financial Management, as reported on the UK Government’s public spending system, OSCAR. Data for 2024-25 are provisional final outturn, whilst earlier years are audited final outturn. Data from OSCAR are available at https://www.gov.uk/government/collections/hmt-oscar-publishing-from-the-database

Estimates of Scottish local government spending are taken directly from PESA. Current expenditure is taken from Table 7.5. Capital expenditure is calculated as gross capital expenditure (Table 7.6) less capital receipts (Table 7.7). The spending estimates in PESA are consistent with the local authority spending figures published in Scottish Local Government Financial Statistics. GERS uses the figures from PESA as it converts the Scottish figures from SeRCOP categories used by local authorities to the UN COFOG categories used in GERS. A reconciliation between the GERS figures and those published in Scottish Local Government Financial Statistics is published in GERS Table A.10.

Spending for other UK government bodies comes from a variety of sources.

Spending on defence, public sector debt interest, and international services, which Scotland is allocated a population share of in GERS, is taken directly from PESA.

Spending by other UK government bodies on other functions for 2023-24 and earlier are based on the Country and Regional Analysis (CRA) database, published by HM Treasury. In the CRA, UK Government departments and devolved administrations allocate their expenditure programmes to Scotland, Wales, Northern Ireland and the English regions.

The CRA uses the total expenditure on services (TES) spending concept to analyse public expenditure by function. Total expenditure on services covers around 90% of total managed expenditure (TME), which is the aggregate measure of public expenditure used in the UK national accounts. Accounting adjustments are used to move from the TES measure to the TME measure.

The CRA separates total public spending into two components:

• Identifiable expenditure: that is expenditure that can be clearly allocated to a country or region in terms of having been spent for the benefit of that country or region; and

• Non-identifiable expenditure: that is expenditure that cannot be identified as benefiting a particular country or region of the UK but is instead incurred on behalf of the UK as a whole.

In GERS, the methodology to apportion non-identifiable expenditure and identifiable expenditure which occurs outside the UK to Scotland varies according to the particular expenditure estimated. The methodologies used are listed in Table 1. Each reflects the approach that is thought to capture most appropriately the ‘who benefits’ principle.

Table 1: Apportionment methodologies for non-identifiable expenditure [note 1]

Notes to Table 1
1: Where there is no UK non-identifiable expenditure this is entered as not applicable (n/a).
2: All environment protection expenditure is apportioned on a GVA basis, except UKAEA and BNF expenditure on nuclear decommissioning, which is apportioned on a per capita basis.

Amendments to CRA Data

A number of significant improvements have been made to the CRA database in recent years to apportion expenditure more accurately to countries and regions. While many anomalies in previous editions of the CRA have been addressed and are now reflected in both CRA 2023-24 and this GERS report, a small number of supplementary amendments to the CRA 2023-24 dataset were made in producing GERS. The aim of these refinements was to ensure that the public sector expenditure figure for Scotland captures as accurately as possible expenditure for the benefit of Scotland.  

The total amendment made to the CRA in producing this edition of GERS is shown in Table 2 below. In the financial year 2023-24, the figure of total expenditure on services attributed to Scotland in GERS is £179 million lower than the corresponding CRA figure (using default apportionments for non-identifiable expenditure without further consideration, and excluding the adjustments made to EU transactions using data from Scottish Government accounts).

Table 2: Amendments to Estimates of Total Public Sector Expenditure on Services from CRA 2024 (£ million)

High Speed 2

In the Country and Regional Analysis publication, as the complexity of the High Speed 2 has increased, the Department for Transport is no longer able to provide the location of capital spending associated with the project. As capital spend accounts for the majority of High Speed 2 expenditure, and as this expenditure is assumed not to be occurring in Scotland, none of the expenditure associated with High Speed 2 is allocated to Scotland.

In October 2023, the UK Government announced the cancellation of Phase 2 of High Speed 2. This cancelled phase would have delivered further savings to journeys from Scotland, and supports the decision not to allocate High Speed 2 spending to Scotland in GERS.

Nuclear Decommissioning and Related Expenditures

In CRA 2024 expenditure on nuclear decommissioning is classified as identifiable to the region where nuclear facilities are located. However, as discussed in previous editions of GERS, it is believed that this expenditure is best captured as a non-identifiable expenditure, so nuclear decommissioning and associated expenditure is apportioned on a population basis.

Other Amendments

A number of other minor amendments have been made to the CRA to correct asymmetries in the regional attribution of expenditures related to consumer protection, civil aviation, tourism and libraries amongst others. These are discussed further in previous editions of GERS.

Adjustments to CRA Data

The CRA data provide a country and regional breakdown of UK spending on TES, which is broadly consistent with PESA published in July 2024.

Since CRA 2023-24, there have been a number of revisions to UK TES, which need to be reflected in GERS spending figures.

Revisions to UK TES come from a number of sources. The majority of revisions relate to 2023-24 and reflect the move from provisional outturn to final outturn for most spend types.

Table 3: Methodology for apportioning UK revisions to Scotland

Note: Table 3 excludes local authority expenditure, EU transactions and Public Sector Debt.

The effect of including revisions in the Scottish estimate is to decrease the overall estimate of Scottish spending in 2023-24 by £196 million, with UK spending revised up by £12,225 million.