A Supplementary Tables
This section presents supplementary tables on public sector revenue and expenditure in Scotland.
Table A.1 below shows the population figures used in calculating per head estimates in GERS.
Table A.1: Financial Year Population Estimates (thousands)
|As % of UK total||8.4%||8.4%||8.3%||8.3%||8.3%|
Note: Financial year estimates are calculated as the weighted average of the relevant mid-year estimates. I.e., the 2014-15 population is estimated as three-quarters of the 2014 population plus one quarter of the 2015 population.
Table A.2 below shows the relationship between revenue, current expenditure, and the current budget balance, and then the transition from the current budget balance to the net fiscal balance.
Table A.2: Current and Capital Budgets: Scotland
|Excluding North Sea revenue||45,530||47,246||48,276||50,051||51,639|
|Including North Sea revenue (population share)||46,234||48,162||48,794||50,446||51,826|
|Including North Sea revenue (geographical share)||52,996||56,878||53,565||54,050||53,443|
|Balance on current budget (surplus is positive, deficit is negative)|
|Excluding North Sea revenue||-16,598||-15,339||-14,911||-14,332||-13,741|
|Including North Sea revenue (population share)||-15,893||-14,423||-14,393||-13,936||-13,555|
|Including North Sea revenue (geographical share)||-9,132||-5,707||-9,622||-10,332||-11,937|
|Net Fiscal Balance (surplus is positive, deficit is negative)|
|Excluding North Sea revenue||-20,175||-18,879||-19,470||-17,431||-16,738|
|Including North Sea revenue (population share)||-19,471||-17,963||-18,952||-17,036||-16,551|
|Including North Sea revenue (geographical share)||-12,710||-9,247||-14,181||-13,432||-14,934|
The tables below set out revenue raised in Scotland from taxes devolved to the Scottish Parliament prior to 2014-15.
Table A.3: Existing Devolved Taxes Revenue
|Non Domestic Rates||1,863||1,954||1,930||1,927||1,915|
The table below shows the estimated historical revenues from the revenues devolved under the Scotland Act 2012.
Table A.4: Revenue under Scotland Act 2012
|Scottish Rate of Income Tax Liabilities (from 2016-17)1||4,427||4,267||4,273||4,288||4,449|
|Stamp duty land tax (from 2015-16)2||334||275||283||389||478|
|Landfill tax (from 2015-16)||129||131||139||150||147|
Source: HMRC, OBR
Notes: 1. This table shows Scottish Rate of Income Tax liabilities rather than receipts. They are therefore calculated on a different basis to the estimates of total Scottish income tax receipts in Table 1.1.
2. Stamp duty land tax has been replaced with Land and Building Transaction Tax in Scotland from 2015-16.
The table below shows the estimated historical revenues from the taxes proposed for devolution under the Scotland Bill 2015-16, following the recommendations of the Smith Commission.
Table A.5: Revenues devolved under Scotland Bill 2015-16 proposals
|Air Passenger Duty (from 2018-19)||185||228||243||273||309|
|Aggregates Levy (date to be decided)||55||48||43||43||54|
|Non-savings and non-dividend income tax liabilities (from 2017-18)||10,392||10,584||10,714||10,911||11,196|
Note: this table shows Scottish non-savings and non-dividends income tax liabilities rather than receipts. They are therefore calculated on a different basis to the estimates of total Scottish income tax receipts in Table 1.1.
The Scotland Bill 2015-16 proposes to assign the Scottish Government receipts from the first 10p of the standard rate of VAT and the first 2.5p of the reduced rate of VAT in Scotland.
Table A.6 shows the VAT that would be assigned to Scotland under this proposal. Within GERS, VAT is shown gross of VAT refunds to government. This is consistent with the approach taken by the ONS in the UK public sector finances. This figure is higher than the actual amount of VAT received by HMRC, which is VAT net of refunds. Table A.6 shows the estimated VAT which would be assigned to Scotland on both a gross and net basis. VAT assigned to the Scottish Government would likely be reported on a net basis in budget documents.
Table A.6: VAT Assignment: Scotland 2010-11 to 2014-15
|Gross VAT (from 2019-20)||4,357||4,779||4,832||5,022||5,173|
|Net VAT (from 2019-20)||3,757||4,129||4,183||4,409||4,562|
Note: Assigned VAT receipts are 50% of total receipts in all years. This is an approximation in 2010-11 when the standard rate was 17.5% until January 2011
Further information on the planned devolution of revenue power to the Scottish Government is available in the fiscal framework agreement between the Scottish and UK Governments, available at the following link: http://www.gov.scot/Publications/2016/02/3623/0
Devolved Social Security Benefits
The table below shows the value of social security benefits which will be devolved to the Scottish Government under the Scotland Bill 2015-16 proposals. It does not include existing devolved benefits such as council tax reduction.
Table A.7: Benefits proposed for devolution under Scotland Bill 2015-16 Proposals, 2014-15 (£ million)
|Disability Living Allowance||1,465|
|Winter Fuel Payment||184|
|Personal Independence Payment||164|
|Industrial Injuries Disablement Benefit||92|
|Severe Disablement Allowance||77|
|Cold Weather Payment||7|
|Sure Start Maternity Grant||3|
|Total expenditure on benefits to be devolved||2,684|
Source: Social security for Scotland: Benefits being devolved to the Scottish Parliament http://www.gov.scot/Topics/Statistics/Browse/Social-Welfare/SocialSecurityforScotland/SSfSNov2015
Summary of current and proposed devolved powers
The table below shows estimates of devolved receipts and expenditure under the Scotland Act 2012 and the Scotland Bill 2015-16 proposals.
Table A.8: Fiscal powers before and after Scotland Bill 2015-16 Proposals, 2014-15 (£ million)
|Before Scotland Bill 2015-16||After Scotland Bill 2015-16|
|Non Saving Non Dividend Income Tax Liabilities (devolved from 2016-17)||4,449||11,196|
|Stamp Duties (Land and Buildings) (devolved from 2015-16)||478||478|
|Air Passenger Duty (devolved from 2018-19)||309|
|Landfill Tax (devolved from 2015-16)||147||147|
|Aggregates Levy (date to be decided)||54|
|Total devolved revenues||8,985||16,095|
|Devolved revenue as % of non-North Sea Scottish revenue||17%||31%|
|as % of revenue incl geographical share of North Sea revenue1||17%||30%|
|Assigned VAT2 (assigned from 2019-20)||0||5,367|
|Total devolved and assigned revenues||8,985||21,461|
|Devolved and assigned revenue as % of non-North Sea Scottish revenue||17%||41%|
|as % of revenue incl geographical share of North Sea revenue1||17%||40%|
|Devolved expenditure excluding housing benefit3 (HB)||38,587||41,262|
|Devolved revenue as % of estimated devolved expenditure excl HB||23%||39%|
|Devolved and Assigned revenue as % of estimated devolved expenditure excl HB||23%||52%|
|Devolved expenditure including housing benefit3||40,363||43,038|
|Devolved revenue as % of estimated devolved expenditure incl HB||22%||37%|
|Devolved and Assigned revenue as % of estimated devolved expenditure incl HB||22%||50%|
1 Figures for the shares of devolved revenue as a share of total revenue including a population share of North Sea revenue are the same as the share when excluding North Sea revenue.
2 Assigned VAT is shown on a gross basis, consistent with the National Accounts presentation. If net VAT were to be used, devolved expenditure would also need to be adjusted, as set out in Table A.17. In this case, devolved revenue as a share of estimated devolved expenditure would be 40% excluding housing benefit and 38% including housing benefit. Other Scotland Bill 2015-16 percentages are unchanged.
3 In GERS and the CRA, housing benefit is included in Scottish Local Government spending, as they make the payments to recipients, although it is set centrally and funded by the Department for Work and Pensions. Depending on definitions adopted, it could either be excluded or included in devolved expenditure. GERS presents both approaches.
Table A.9 below provides the financial year GDP estimates used in GERS.
Table A.9: Scottish GDP including and excluding North Sea GDP: (£m)
|Excluding North Sea revenue||123,775||128,178||130,336||135,293||140,835|
|Including North Sea revenue (per capita share)||126,104||130,545||132,328||137,214||142,179|
|Including North Sea revenue (geographical share)||146,872||151,751||149,613||153,472||153,340|
Source: Quarterly National Accounts Scotland, http://www.gov.scot/snap; ONS
The headline GERS figures cover the whole of the public sector. As such, they include revenue and expenditure associated with public corporations such as Scottish Water and the Bank of England. They are on a financial year basis.
When conducting international comparisons, bodies such as the IMF or the OECD present figures on a calendar year basis and covering only general government; i.e., excluding public corporations. In order to help comparisons with such figures, the table below presents the GERS results on this general government and calendar year basis
Table A.10: General government revenue, expenditure, and balance: Scotland and UK
|Excluding North Sea revenue||43,610||45,997||46,756||49,922||50,673|
|Including North Sea revenue (per capita share)||44,314||46,914||47,274||50,317||50,860|
|Including North Sea revenue (geographical share)||51,076||55,630||52,045||53,921||52,477|
|Net Fiscal Balance|
|Excluding North Sea revenue||-21,396||-19,622||-21,057||-16,927||-17,616|
|Including North Sea revenue (per capita share)||-20,692||-18,705||-50,539||-16,532||-17,429|
|Including North Sea revenue (geographical share)||-13,930||-9,989||-15,768||-12,928||-15,812|
|Excluding North Sea revenue||-17.5%||-15.4%||-16.3%||-12.6%||-12.6%|
|Including North Sea revenue (per capita share)||-16.4%||-14.3%||-15.5%||-12.0%||-12.3%|
|Including North Sea revenue (geographical share)||-9.5%||-6.6%||-10.5%||-8.4%||-10.3%|
Note: an error was identified in the North Sea revenue figures in Table A.10 on 9 March 2016. This did not affect figures in any other table in the publication. Estimates of revenue excluding the North Sea were not affected. Estimates of revenue including a per capita share of North Sea revenue have been reduced by an average of £0.1 billion per year in 2012, 2013 and 2014, and revised upwards by a similar amount in 2010 and 2011. Estimates of revenue including a geographic share of North Sea revenue have been reduced by an average of £0.9 billion per year in 2012, 2013 and 2014, and revised upward by an average of £0.6 billion in 2010 and 2011. Revisions to the cash estimate of the net fiscal balance are the same as revisions to revenue. As a share of GDP, the net fiscal balance including a population share of North Sea revenue is on average unchanged in 2012, 2013 and 2014, and revised to be on average 0.1% of GDP smaller in 2010 and 2011. Including a geographical share of North Sea revenue, the net fiscal balance has been revised to be on average 0.6% of GDP larger in 2012, 2013 and 2014, and to be on average 0.5% smaller in 2010 and 2011.
Public Sector Unitary Charge Payments
The table below presents figures for expenditure on public sector unitary charges for projects in Scotland. These are payments by the Scottish public sector to private companies for assets delivered through forms of Public Private Partnerships, such as the Private Finance Initiative or the Non-Profit Distributing model.
Table A.11: Public Sector Unitary Charge Expenditure in Scotland
|Scottish Public Sector Unitary Charges1||825||905||954||976||1,007|
|Other UK Government Departments PFI Unitary Charges for Projects in Scotland||23||23||23||23||23|
|Total Unitary Charges in Scotland||848||928||978||999||1,031|
A number of the revenues in GERS are based on survey estimates. As such, they have an associated statistical uncertainty. The table below presents the 95% confidence intervals associated with these revenues. Other revenues are based on administrative data, or modelled data for which confidence intervals are not available. Estimates are not presented for these revenues. Expenditure is primarily based on administrative data, and therefore confidence intervals are not presented for expenditure.
Although tobacco duties and alcohol duties are both based on the Living Costs and Food Survey, the confidence interval for alcohol is larger. This is because the methodology for calculating alcohol duties uses more disaggregate survey data to reflect the different levels of duty, and revenue, received from different types of alcohol. This lower level survey data has a correspondingly larger uncertainty.
Table A.12: Confidence intervals around survey based apportionments
|Scotland (£ Millions)|
|Central estimate||95% lower bound||95% upper bound||Range||Range (%)|
|Income tax||11,735||11,618||11,852||+/- 117||+/- 1%|
|National insurance contributions||8,969||8,879||9,059||+/- 90||+/- 1%|
|VAT||10,734||10,503||10,965||+/- 231||+/- 2.2%|
|Tobacco duties||1,258||1,237||1,279||+/- 21||+/- 1.7%|
|Alcohol duties||961||878||1,043||+/- 82||+/- 8.6%|
|Betting and gaming and duties||185||182||188||+/- 3||+/- 1.4%|
|Insurance premium tax||206||202||210||+/- 4||+/- 2%|
|Total survey based apportionments||34,047||33,499||34,595||+/- 548||+/- 1.6%|
Amendments to the Country and Regional Analysis database
A number of significant improvements have been made to the HM Treasury Country and Regional Analysis (CRA) database in recent years to apportion expenditure more accurately to countries and regions of the UK. While many anomalies in previous editions of the CRA have been addressed and are now reflected in both CRA 2015 and this GERS report, a small number of supplementary amendments to the CRA 2015 dataset were made in producing GERS. The aim of these refinements is to ensure that the public sector expenditure figure for Scotland captures as accurately as possible expenditure for the benefit of Scottish residents.
The amendments made to the CRA in producing this edition of GERS are shown in Table A.13. They are discussed in the detailed expenditure methodology paper available at http://www.gov.scot/Topics/Statistics/Browse/Economy/GERS/Methodology.
In 2014-15, UK capital expenditure in the CRA associated with the London Olympics is negative. This is because the capital receipts associated with the sale of the former Olympic Village were greater than new investment, and so net capital expenditure is negative.
In GERS, Scotland is allocated none of the expenditure associated with the London Olympics. As the default approach to London Olympics expenditure would be to apportion Scotland a population share of the negative UK expenditure in 2014-15 recorded in the CRA database, apportioning Scotland a zero share increases Scottish expenditure.
Table A.13: Amendments to Estimates of Total Public Sector Expenditure on Services from CRA 2015
|Other minor revisions||-64||-9||-33||-30||-50|
Note: Amendments do not include EU Transactions
Spending in GERS is based on the HM Treasury CRA database.This provides an estimate of Total Expenditure on Services (TES) for Scotland. Accounting adjustments are used to move from TES, which accounts for around 85% of total spending, to Total Managed Expenditure (TME), the primary measure of public spending used in the UK Public Sector Finances. In GERS, EU transactions are included as part of the accounting adjustments, rather than a separate spending line. The adjustments are shown in the table below.
Table A.14: Total Accounting Adjustment: Scotland and UK 2009-10 to 2014-15
|TES to TME accounting adjustment||5,118||5,122||5,638||5,357||5,117|
|Total Scottish accounting adjustment||5,033||4,891||5,645||5,338||5,184|
|TES to TME accounting adjustment||52,262||54,818||62,711||57,516||61,673|
|Total UK accounting adjustment||55,890||56,852||67,018||62,563||65,396|
In order to present Scottish Government and Local Government spending on a TME basis in GERS, it is necessary to allocate different parts of the accounting adjustments to either the Scottish Government or other UK Government departments. Currently, capital consumption, VAT refunds, the subsidy to the Housing Revenue Account and Student Loans, and the Local Authority Pensions are allocated to the Scottish Government or Scottish Local Government. Other elements are allocated to other UK Government departments operating in Scotland.
Table A.15: Public Sector Finances Accounting Adjustment: UK
|UK total managed expenditure (TME)||707,991||707,742||722,081||726,506||737,119|
|UK total expenditure on services (TES)||655,729||652,924||659,370||668,990||675,446|
|UK accounting adjustment||52,262||54,818||62,711||57,516||61,673|
|of which current expenditure:|
|Central government capital consumption||15,019||15,815||16,192||16,560||16,819|
|Local government capital consumption||8,464||8,976||9,497||10,017||10,526|
|Current VAT refunds||11,095||11,672||11,553||11,597||11,434|
|VAT receipts paid to the EU||2,267||2,276||2,397||2,339||2,222|
|Student loans subsidy1||-4,242||-2,215||-3,809||-6,310||-2,151|
|Imputed subsidy from Local Authorities to the Housing Revenue Account2||1,069||441||387||465||598|
|Imputed flows for Renewable Obligation Certificates 3||1,283||1,471||1,966||2,532||3,064|
|Local authority pensions||1,826||1,881||1,966||1,862||1,900|
|British Transport Police Service Agreements||201||194||193||202||238|
|Current expenditure residual||-4,954||-5,929||-4,933||1||-1,651|
|of which capital expenditure:|
|Capital VAT refunds||2,064||2,223||2,143||2,097||2,168|
|Royal Mail Pension Plan||0||0||9,460||0||0|
|Capital expenditure residual||9,536||10,294||9,445||7,488||8,390|
1 TES includes the subsidy implied in student loans being issued at lower than market rate. This is not included in TME - the National Accounts measures the difference between interest received from students and the amount of interest paid by the government on the debt incurred to make the loans.
2 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 impute 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).
3 Renewable Obligation Certificates are bought and sold by energy companies. The ONS have decided that these flows should be channelled through central government and so impute offsetting amounts of spending and income.
4 The residual for the UK in 2014-15 includes a timing adjustment. The TES figure used in GERS is consistent with the latest CRA analysis, which is from November 2015. The TME figure in GERS is consistent with the public sector finances statistical bulletin published in January 2016. In addition, the residual includes changes to TES not reflected in TME and to TME not reflected in TES in the years prior to 2013-14.
Table A.16: Public Sector Finances Accounting Adjustment: Scotland
|Scottish total managed expenditure (TME)||65,705||66,125||67,746||67,482||68,377|
|Scottish total expenditure on services (TES)||60,587||61,003||62,108||62,125||63,260|
|Scottish accounting adjustment||5,118||5,122||5,638||5,357||5,117|
|Percentage of UK accounting adjustment||9.8%||9.3%||9.0%||9.3%||8.3%|
|Of which current expenditure:1|
|Central government capital consumption||1,193||1,272||1,237||1,319||1,273|
|Local government capital consumption||812||877||943||987||1,038|
|Current VAT refunds||1,012||1,093||1,095||1,039||1,027|
|VAT receipts paid to the EU||192||190||201||201||190|
|Student loans subsidy2||76||85||-124||-8||-50|
|Imputed subsidy from Local Authorities to the Housing Revenue Account3||84||35||30||36||47|
|Imputed flows for Renewable Obligation Certificates4||152||175||233||300||364|
|Local authority pensions||166||171||173||169||176|
|British Transport Police Service Agreements||17||17||17||17||20|
|Current expenditure residual||-415||-497||-411||0||-137|
|Of which capital expenditure:|
|Capital VAT refunds||188||208||203||188||195|
|Royal Mail Pension Plan||0||0||788||0||0|
|Capital expenditure residual||799||860||788||620||696|
1See notes to Table A.15
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 3.8 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 pensions expenditure as the difference between monies paid into the pension fund and monies paid out, 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. http://www.gov.scot/Publications/2015/03/1422/8
Table A.17 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 2013-14 rather than 2014-15, as this is the latest year for which published accounts were available for both the Scottish Government and Scottish Local Government when the CRA was published.
Table A.17: Reconciliation of published budget documents to GERS expenditure Table 3.8 (£ billion)
|Published Scottish Government budget1||34.3|
|Spending by Audit Scotland and Scottish Parliament||0.1|
|Total Scottish Government expenditure||34.4|
|Adjustments to align budget to CRA measure of spending|
|Grants to other public sector bodies (e.g. local government)||-10.7|
|Final Scottish Government expenditure from CRA||21.6|
|Scottish Local Government|
|Published Local Government gross current expenditure2||12.3|
|Income excluding grants from Central Government3||-1.9|
|Published Local Government gross capital expenditure4||2.5|
|Income from sales of capital assets4||-0.2|
|Final Scottish Local Government expenditure from CRA||14.4|
|Scottish Government and Scottish Local Government from CRA||36.0|
|National Accounts adjustments5|
|Student loan and Housing Revenue Account subsidy in Scotland||0.0|
|Other accounting adjustments||0.1|
|Final Scottish Government and Scottish Local Government TME||39.7|
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