Government Expenditure and Revenue Scotland (GERS): Methodology Publication 2025-26

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 2025-26 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

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 2024-25 and earlier are based on the Country and Regional Analysis (CRA) database, published by HM Treasury.[1] 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 Expenditure1

A number of 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 2024-25 and this GERS report, a small number of supplementary amendments to the CRA 2024-25 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 2024-25, 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 2025 (£ 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 2025 expenditure on nuclear decommissioning is classified as identifiable to the region where nuclear facilities are located. However, as discussed in previous editions of GERS,[1] 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 2024-25, 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 2024-25 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 2024-25 by £174 million, with UK spending revised down by £1,318 million.

The above has described the methodology for deriving total expenditure on services for Scotland. The primary measure of spending used in the public sector finances is total managed expenditure. In order to present total spending for Scotland on this basis, a number of accounting adjustments are included. These are primarily symmetric with adjustments made to revenue data, and so do not necessarily affect the fiscal balances. The accounting adjustments for Scotland are shown in the table below.

Table 6: Expenditure Adjustments: Scotland (£ million)

1 The Housing Revenue Account (HRA) is classified as a public corporation by the ONS, which means that they pay dividends on their profits to local authorities. To ensure that these dividends are non-negative, the ONS imputes a subsidy from local authorities to HRAs to cover any shortfall (offset in public corporation gross operating surplus, which scores on the revenue side of the account).

2 Renewable Obligation Certificates are bought and sold by energy companies. The ONS has decided that these flows should be channelled through central government and so impute offsetting amounts of spending and income.

Expenditure accounting adjustments

Spending in GERS is based on the HM Treasury Total Expenditure on Services (TES) concept, which accounts for around 90% of total spending. Accounting adjustments are used to move from TES to Total Managed Expenditure (TME), the primary measure of public spending used in the UK Public Sector Finances. As discussed in Chapter 1, for the majority of these adjustments, accompanying adjustments are included in revenue estimates, and therefore do not affect the net fiscal balance or current budget balance. This is shown in more detail in Table A.10.

The capital accounting adjustment for the UK in 2022-23 has a relatively large negative residual. This primarily relates to adjustments to spending data made by ONS to remove expenditure associated with leases under IFRS16, where different data sources are used in the Public Sector Finances.

ote that the capital consumption figures in Table A.8 do not match the capital consumption figures in Table A.2. This is because the overall capital consumption figures in Table A.2 include capital consumption of public corporations, which are not included in accounting adjustments. Scotland continues to be apportioned a population share of this residual. We will keep these adjustments under review for future publications.

Refer to online tables A.7 to A.9. for further details.

The table below shows how the accounting adjustments are estimated for Scotland.

Table 7: Apportionments for the expenditure Accounting Adjustments

Reconciliation to published Scottish Government and Scottish Local Government budgets

There are a number of differences between the figures for spending by Scottish Government and Local Authorities presented in Table 3.5 and figures presented in Scottish Government budgets and Scottish Local Government Finance Statistics. The key differences relate to accounting treatments, particularly of pensions, VAT refunds, and depreciation.

GERS uses National Accounts principles, which show actual pensions expenditure, and which shows gross expenditure before VAT refunds. Depreciation in GERS is based on the concept of capital consumption, which uses estimates of the value of assets used to provide services in terms of current asset values.

In contrast, budget documents use financial accounting principles, which include a measure of future liabilities of pension funds, and which shows net expenditure after VAT refunds. Depreciation is based on historical asset prices.

A more detailed description of the differences is provided in Box 5.2 of GERS 2013‑14.

Chapter 5: Public Sector Expenditure - Government Expenditure & Revenue Scotland 2013-14 - gov.scot (www.gov.scot)

Table A.10 below shows the reconciliation of published Scottish Government and Scottish Local Government Finance figures to the figures published in the CRA and GERS. This shows figures for 2024-25 rather than 2025-26, as this is the latest year for which published accounts are available for both the Scottish Government and Scottish Local Government. 2025-26 figures in GERS are based on provisional outturn estimates

Refer to online tables A.10 for further details.

While a member of the European Union (EU), the UK contributed to the EU budget and received funding from the EU via a number of programmes. Although the UK left the EU on 31 January 2020, it continued to make payments to, and receive funding from, the EU in 2020-21 under transitional arrangements. These transactions largely ended in 2021-22.

Details of how the ongoing EU Transactions are calculated are provided in GERS 2022-23 methodology documents:Government Expenditure and Revenue Scotland (GERS): detailed methodology 2022-23 - gov.scot (www.gov.scot)