1 INTRODUCTION AND OVERVIEW
GERS 2010-11 estimates public sector expenditure and revenue for Scotland for the years 2006‑07 to 2010-11. Particular focus is given to 2010-11, the latest fiscal year for which outturns of expenditure and revenue are available for Scotland. All figures are in current prices.
The structure of the report has changed slightly from that of GERS 2009-10, with information on Scotland's fiscal background now provided in Annex A. The outline below provides a brief overview of the chapters contained in the publication.
Chapter 2: Scotland's Public Sector Accounts
Chapter 2 provides a summary of estimated public sector revenue in and expenditure for Scotland between 2006-07 and 2010-11. It contains an estimate of total current and capital expenditure by the public sector for Scotland and an estimate of total revenue raised. It also includes an estimate of the current budget balance (i.e. current revenue less current expenditure less capital consumption) and the overall net fiscal balance (i.e. the current budget balance less net investment). As the figures in this chapter cover the whole of the public sector in Scotland, and use National Accounts definitions, they are not directly reconcilable with departmental budget reports, such as the Scottish Government Draft Budget.
Chapter 3: Public Sector Revenue
Chapter 3 presents a detailed discussion of public sector revenue raised in Scotland and compares the estimated figures for Scotland with those for the UK. As Chapter 4 provides a detailed discussion of North Sea revenue, the focus of this chapter is on all other elements of public sector revenue. The revenue analysis in GERS is consistent with the ONS Public Sector Finance Statistics.
Chapter 4: North Sea Revenue
Chapter 4 discusses the treatment of fiscal revenue from the North Sea. A range of estimates of Scotland's share of North Sea revenue are provided, together with their impact on total public sector revenue in Scotland.
Chapter 5: Public Sector Expenditure
Chapter 5 presents a detailed discussion of public sector expenditure for Scotland and compares and contrasts the estimated figures for Scotland with those for the UK.
The expenditure analysis in GERS is consistent with the approach HM Treasury takes to estimate public sector expenditure in the UK. Total expenditure is divided into current and capital expenditure. Current expenditure includes items such as public sector wages and social security payments. Capital expenditure largely comprises the development of public sector infrastructure, either new construction or significant renovation to existing infrastructure, such as schools and hospitals.
In GERS, expenditure is also divided into three categories: identifiable expenditure; non-identifiable expenditure; and accounting adjustments. Identifiable expenditure is expenditure that can be directly identified as having been spent for the benefit of a country or region within the UK. Non-identifiable expenditure is expenditure that is considered to occur on behalf of the UK as a whole and which cannot be apportioned to an individual country or region. Finally, an accounting adjustment is required to bring the estimate of expenditure in line with current National Accounts conventions.
Chapter 6: Conclusion
Chapter 6 provides a short summary of the key results.
Annex A: Fiscal Background
Annex A provides an overview of the fiscal framework in which the public sector operates in Scotland and the UK.
Annex B: Revenue Methodology
Annex B provides a brief summary of the various methodologies that have been applied to estimate public sector revenue in Scotland and summarises the extent and nature of the revisions to the revenue estimates between this edition of GERS and GERS 2009-10.
A more detailed revenue methodology paper is available on the GERS website which provides a full discussion of the estimation techniques applied for each revenue source4.
Annex C: Expenditure Methodology
Annex C provides a brief summary of the various methodologies that have been applied to estimate public sector expenditure for Scotland. Annex C also highlights where the data contained in GERS differ from that in the underlying PESA CRA database. More detailed analysis is also available on the GERS website5.
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