- Government Expenditure and Revenue Scotland ( GERS) addresses three questions about Scotland's public sector accounts under the current constitutional arrangements:
- What revenues were raised in Scotland?
- How much did the country pay for the public services that were consumed?
- To what extent did the revenues raised cover the costs of these public services?
- GERS is a National Statistics publication. It is assessed by the independent UK Statistics Authority to ensure that it meets the Code of Practice for Official Statistics.
- The estimates in GERS are consistent with the UK Public Sector Finances published in July 2017 by the Office for National Statistics ( ONS). Feedback from users of the publication is welcome. A correspondence address is available in the back leaf of the publication. Comments can be emailed to email@example.com.
Recent changes to GERS
- A number of methodological and presentational changes have been introduced in the publication this year. These include changes to the methodologies used to estimate a number of taxes. These were consulted on with the Scottish Economic Statistics Consultation Group ( SESCG) and formed part of a wider public consultation. The changes are discussed in the main chapters of the publication, and are summarized in the Scottish Government response to the consultation. 
- The ONS has reclassified Scottish, Welsh, and Northern Irish housing associations  into the public sector, bringing the devolved administrations into line with the treatment applied in England since 2015. On average, the change increases Scottish public sector revenue by around £360 million a year and public sector expenditure by £530 million a year. This produces a small deterioration in the Scottish net fiscal balance since 2008‑09. The changes to the treatment of housing associations elsewhere in the UK similarly impacted on the overall UK net fiscal balance.
- Table S.1 shows two estimates of Scotland's public sector revenue: (i) excluding North Sea revenue, and (ii) including an illustrative geographical share of North Sea revenue. Estimates including a population share of North Sea revenue are available in the main chapters.
- Scotland's estimated non-North Sea revenue in 2016-17 was £57.7 billion. As a percentage of GDP, non-North Sea revenues increased to 38.5%.
- Non-North Sea revenue in Scotland grew by 6.1% in 2016-17, similar to that for the UK as a whole, 6.2%. This relatively strong growth is driven by increased national insurance contributions and corporation tax revenue. The increase in national insurance contributions reflects the impact of policy change, such as the abolition of the contracting out rebate, whilst the increase in corporation tax in part reflects weaker business investment, which reduces tax-deductible allowances.
- Including an illustrative geographical share of the North Sea, total Scottish revenue was £58.0 billion, an increase of 6.3% between 2015-16 and 2016-17. This is faster than the growth in non‑North Sea revenue, reflecting the increase in Scottish North Sea revenue, which grew from £56 million in 2015-16 to £208 million in 2016-17. This is the first time that Scottish North Sea receipts have increased since 2011-12. Although Scottish North Sea receipts increased, Scottish North Sea GDP continued to decline.
- Scotland's non-North Sea revenue was 8.0% of total UK revenue in 2016-17.
Table S.1: Total Revenue: 2012‑13 to 2016‑17
|Scotland - Excluding North Sea revenue||48,912||50,805||52,640||54,446||57,743|
|Scotland - Including North Sea revenue (geographical share)||53,556||54,252||54,014||54,501||57,952|
|As % of UK total revenue|
|Scotland - Excluding North Sea revenue||8.1%||8.1%||8.0%||8.0%||8.0%|
|Scotland - Including North Sea revenue (geographical share)||8.8%||8.6%||8.2%||8.0%||8.0%|
|As % of GDP|
|Scotland - Excluding North Sea revenue||37.2%||36.8%||36.6%||37.4%||38.5%|
|Scotland - Including North Sea revenue (geographical share)||35.9%||34.8%||34.4%||35.0%||36.4%|
|UK - including all North Sea revenue||36.1%||36.1%||35.8%||36.2%||37.0%|
- Table S.2 below shows estimates of revenue per person for Scotland and the UK. Excluding North Sea revenue, revenue per person in Scotland is lower than the UK average by £349 in 2016-17, and has been consistently lower by around £300 in earlier years.
- Including an illustrative geographical share of North Sea revenue, the difference between revenue per person in Scotland and the UK is quite variable. In the latest year, including an illustrative geographical share of North Sea revenue, revenue per person was £312 lower than the UK average.
Table S.2: Revenue per person: Scotland and UK 2012‑13 to 2016‑17
|£ per person|
|Excluding North Sea revenue||9,199||9,527||9,832||10,118||10,684|
|Including North Sea revenue (geographical share)||10,072||10,174||10,089||10,129||10,722|
|Excluding North Sea revenue||9,467||9,808||10,134||10,451||11,033|
|Including North Sea revenue||9,562||9,879||10,160||10,450||11,035|
|Difference (Scotland minus UK)|
|Excluding North Sea revenue||-268||-281||-302||-333||-349|
|Including North Sea revenue (geographical share)||511||295||-71||-321||-312|
- Table S.3 below shows estimates of total managed expenditure for Scotland and the UK, the measure of overall public spending in the UK public sector finances. Expenditure increased from £69.0 billion in 2015-16 to £71.2 billion in 2016-17. Scotland's share of UK expenditure is relatively stable over the period, at around 9.2%.
- Expenditure as a share of GDP excluding the North Sea increased in Scotland in 2016‑17, whilst falling in the UK. In part, this reflects weaker nominal GDP growth in Scotland. However, spending growth in Scotland has also been higher than the UK as a whole, primarily driven by increased spending by Local Government in Scotland and Scottish public corporations.
- Expenditure as a share of GDP including an illustrative geographical share of the North Sea increased slightly more than as a share of Scottish GDP excluding the North Sea in 2016-17. This reflects the decline in North Sea GDP discussed above.
Table S.3: Public Sector Total Managed Expenditure: 2012‑13 to 2016‑17
|Scotland - £ millions||68,094||67,581||68,487||69,048||71,209|
|Share of UK (%)||9.3%||9.2%||9.1%||9.2%||9.2%|
|As % of GDP|
|Scotland - excluding North Sea||51.8%||49.0%||47.6%||47.4%||47.5%|
|Scotland - including geographic share of North Sea||45.6%||43.4%||43.6%||44.4%||44.7%|
|UK - including all North Sea||43.3%||41.9%||41.0%||40.0%||39.4%|
- Table S.4 below shows estimates of expenditure per person for Scotland and the UK. Expenditure for Scotland has been consistently higher per person than the UK average over the period. The increase in expenditure per person in Scotland in 2016-17 primarily reflects increases in capital expenditure in Scotland, driven by increased spending by Local Government in Scotland and Scottish housing associations.
Table S.4: Total Managed Expenditure per person: Scotland and UK 2012‑13 to 2016‑17
|£ per person|
|Difference (Scotland minus UK)||1,334||1,205||1,174||1,277||1,437|
Scotland's Overall Fiscal Position
- GERS provides two measures of Scotland's fiscal position, the current budget balance and the net fiscal balance.
- The current budget balance shows the difference between revenue and current expenditure. It therefore excludes public sector capital investment. It measures the degree to which taxpayers meet the cost of paying for day‑to-day public services, excluding capital investment. It is shown in Table S.5 below.
- Excluding North Sea revenue, the current budget balance for Scotland tends to move in line with the figure for the UK, although the deficit in Scotland is typically around 6 percentage points larger. In 2016-17, the Scottish current budget balance excluding the North Sea improved by 1.7 percentage points, the same as for the UK. When including the North Sea, the movement in Scotland's current budget balance is more variable, and does not follow the same pattern as the UK. However, between 2015-16 and 2016-17 Scotland's current budget balance including the North Sea revenue also improved by 1.7 percentage points.
Table S.5: Current Budget Balance: Scotland and UK 2012‑13 to 2016‑17
|Scotland - Excluding North Sea||-14,796||-13,792||-12,989||-11,983||-9,776|
|Scotland - Including North Sea (geographical share)||-10,153||-10,345||-11,615||-11,927||-9,568|
|As % of GDP|
|Scotland - Excluding North Sea||-11.3%||-10.0%||-9.0%||-8.2%||-6.5%|
|Scotland - Including North Sea (geographical share)||-6.8%||-6.6%||-7.4%||-7.7%||-6.0%|
- The net fiscal balance measures the difference between total public sector expenditure and public sector revenue. It therefore includes public sector capital investment, such as the construction of roads, hospitals, and schools, which yields benefits not just to current taxpayers but also to future taxpayers. It is shown in Table S.6 below.
Table S.6: Net Fiscal Balance: Scotland and UK 2012‑13 to 2016‑17
|Scotland - Excluding North Sea||-19,181||-16,776||-15,847||-14,602||-13,465|
|Scotland - Including North Sea (geographical share)||-14,538||-13,329||-14,473||-14,546||-13,257|
|As % of GDP|
|Scotland - Excluding North Sea||-14.6%||-12.2%||-11.0%||-10.0%||-9.0%|
|Scotland - Including North Sea (geographical share)||-9.7%||-8.6%||-9.2%||-9.3%||-8.3%|
- The net fiscal balance tends to move in the same way as the current budget balance, but is approximately 2 percentage points larger when expressed as a share of GDP. This reflects the fact that capital spending is relatively stable as a share of total spending over time.
- The charts overleaf show the estimates of the current budget balance and net fiscal balance for Scotland and the UK since 1998-99. Consistent with other economic statistics, tables in the accompanying spreadsheets contain figures back to 1998-99.
Net Fiscal Balance: Scotland & UK 1998-99 to 2016-17
Current Budget Balance: Scotland & UK 1998-99 to 2016-17
Box S.1: GERS Frequently Asked Questions
The Scottish Government receives many questions from users about GERS. Below is a summary of some of the most frequently asked questions and their answers.
Q: Is GERS a description of the whole Scottish economy?
A : No. GERS reports only on public sector revenue and expenditure. Although these may be affected by economic performance, GERS does not directly report on Scotland's wider economy. If users are interested in the measurement of the economy as a whole, they should examine other economic statistics products, such as the quarterly Gross Domestic product figures ( www.gov.scot/gdp) or Quarterly National Accounts Scotland ( QNAS, www.gov.scot/snap). These publications provide estimates of real terms growth in the economy, and GDP in cash or nominal terms and its components.
Q: What is the public sector?
The public sector contains all government bodies, and all bodies which are controlled by government. This includes publicly controlled businesses, such as Scottish Water or the Bank of England. Following recent decisions by the ONS, housing associations are now included in the public sector. In GERS, the Scottish Government, Scottish Local Authorities, and the public corporations they control, such as Scottish Water and Scottish housing associations, are all considered to be Scottish bodies. All other UK public sector bodies are described as 'Other UK Government bodies'.
Q: Who produces GERS?
A: GERS is produced by Scottish Government statisticians. It is designated as a National Statistics product, which means that it is produced independently of Scottish Ministers and has been assessed by the UK Statistics Authority as being produced in line with the Code of Practice for Official Statistics. This means the statistics have been found to meet user needs, to be methodologically sound, explained well and produced free of political interference.
Q: How do you decide on changes that are made to GERS?
A: In line with the Code of Practice for Official Statistics, changes are only made to GERS after consultation and discussion with users. This includes discussion at the annual Scottish Economic Statistics Consultation Group,  which brings together users of economic statistics from industry, academia and the wider public sector. An annual consultation exercise, open to all, is also carried out every year to allow all users of GERS to comment on planned and suggested changes to GERS.
Q: Do you use company headquarters to assign corporation tax or taxes like VAT?
A: Corporation tax on trading profits is estimated on a company-by-company basis, depending on the economic activity each company has in Scotland, not location of company headquarters. VAT is a consumption tax, and is therefore estimated based on purchases that are made in Scotland, rather than the location of a company's head office.
Q: How do taxes from the whisky industry feature in the GERS estimates?
A: Like any industry, the whisky industry's activity in Scotland generates tax revenue through a range of sources, such as corporation tax on profits, income tax and national insurance contributions on staff earnings, and non-domestic rates payments on business premises. These are all captured in the estimates of Scottish public sector receipts reported in GERS.
In addition, whisky consumed in the UK is subject to VAT and alcohol duty. This is assigned to Scotland on the basis of how much is consumed in Scotland. Whisky which is exported does not generate UK VAT or alcohol duty. There is no export duty in the UK.
Q: What are Accounting Adjustments and why do they feature in the GERS estimates?
A: Accounting adjustments are used to present revenue and expenditure on a National Accounts basis, the international reporting standards used by governments. They normally reflect non-cash items, such as depreciation or pensions liabilities. In general, these adjustments do not affect the net fiscal balance or current budget balance, as they are added to both revenue and expenditure. In 2016-17, accounting adjustments added £4.3 billion to the estimate of Scottish public sector revenue and £5.1 billion to the estimate of Scottish public sector spending. Comparable accounting adjustments are also contained in the estimates of UK public sector spending and revenue. For more information on accounting adjustments and where they appear in the revenue tables, see Table A.9.
Q: Is spending that does not occur in Scotland included in the estimates of Scottish public spending?
A: GERS aims to capture all spending that benefits the residents of Scotland. This means it assigns Scotland a share of some expenditure which takes place outside Scotland. It also means that it does not assign to Scotland expenditure which occurs in Scotland but benefits non-Scottish residents.
For example, expenditure on embassies occurs outside Scotland, but provides benefits to Scottish residents and companies, such as Scottish tourists requiring consular services. As such, Scotland is allocated a population share of this expenditure in GERS. Likewise, spending on museums in Scotland benefits visitors from the rest of the UK, so not all of this spending is assigned to Scotland in GERS.
Q: Why does GERS refer to public sector revenues rather than taxes?
A: Public sector revenue covers all income received by the public sector. Although this is mostly taxes, there are some forms of revenue which are not taxes. These include income made by public corporations, such as Scottish Water, or dividend income from companies in which the government holds shares. This year's edition of GERS provides a breakdown of revenue into tax and non-tax categories.
Email: Sandy Stewart, firstname.lastname@example.org
Phone: 0300 244 4000 – Central Enquiry Unit
The Scottish Government
St Andrew's House
There is a problem
Thanks for your feedback