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Government Expenditure and Revenue Scotland 2020-21

Government Expenditure and Revenue Scotland (GERS) is a National Statistics publication. It estimates the revenue raised in Scotland and the goods and services provided for the benefit of Scotland.

This document is part of a collection


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)
2016-17 2017-18 2018-19 2019-20 2020-21
Scotland 5,410 5,428 5,444 5,464 5,466
UK 65,746 66,139 66,526 66,868 67,081
As % of UK total 8.2% 8.2% 8.2% 8.2% 8.1%

Note: Financial year estimates are calculated as the weighted average of the relevant mid-year estimates. I.e., the 2019-20 population is estimated as three-quarters of the 2019 population plus one quarter of the 2020 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
£ million
2016-17 2017-18 2018-19 2019-20 2020-21
Current Budget
Revenue
Excluding North Sea revenue 59,303 61,225 64,158 65,312 62,287
Including North Sea revenue (population share) 59,306 61,331 64,256 65,365 62,321
Including North Sea revenue (geographical share) 59,461 62,367 65,516 66,157 62,837
Current expenditure 66,860 68,487 70,508 73,175 89,372
Capital consumption 5,379 5,334 5,737 6,074 8,607
Balance on current budget
(surplus is positive, deficit is negative)
Excluding North Sea revenue -12,937 -12,596 -12,086 -13,937 -35,693
Including North Sea revenue (population share) -12,934 -12,490 -11,989 -13,884 -35,659
Including North Sea revenue (geographical share) -12,778 -11,455 -10,728 -13,092 -35,143
Capital Budget
Capital expenditure 8,856 9,038 8,738 8,802 9,804
Capital consumption -5,379 -5,334 -5,737 -6,074 -8,607
Net Investment 3,477 3,704 3,001 2,728 1,197
Net Fiscal Balance (surplus is positive, deficit is negative)
Excluding North Sea revenue -16,413 -16,300 -15,088 -16,665 -36,889
Including North Sea revenue (population share) -16,410 -16,194 -14,990 -16,612 -36,856
Including North Sea revenue (geographical share) -16,255 -15,159 -13,729 -15,821 -36,340

GDP

Table A.3 below provides the financial year GDP estimates used in GERS.

Table A.3: Scottish GDP including and excluding North Sea GDP
£ million
2016-17 2017-18 2018-19 2019-20 2020-21
Scottish GDP
Excluding North Sea and share of UK extra-regio 152,384 157,704 164,011 167,185 154,866
Including North Sea (population share) 153,377 159,030 165,609 168,548 155,747
Including North Sea (geographical share) 160,985 169,583 178,574 179,395 162,251
UK GDP 2,016,681 2,082,483 2,163,750 2,223,595 2,098,761

Source: Quarterly National Accounts Scotland, https://www.gov.scot/collections/economy-statistics/; ONS

Note: Scottish GDP including a geographical share of the North Sea also includes a population share of UK overseas public administration and defence activity. Table E in Quarterly National Accounts Scotland provides a more detailed breakdown.

General Government estimates

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 European Commission and the International Monetary Fund (IMF) 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 net fiscal balance results on this basis. As revenue and expenditure are primarily estimated on a financial year and public sector basis, the calendar year estimates below are illustrative and have been derived by apportioning the main GERS estimates.

Table A.4: Calendar year general government estimates: Scotland and UK
£ million
2016 2017 2018 2019 2020
Net Fiscal Balance
Excluding North Sea revenue -16,867 -15,978 -16,101 -16,483 -33,353
Including North Sea revenue (per capita share) -16,896 -15,882 -16,007 -16,401 -33,342
Including North Sea revenue (geographical share) -17,411 -14,852 -14,893 -15,321 -33,023
UK -65,829 -50,056 -47,329 -50,925 -258,157
As % of GDP
Excluding North Sea revenue -11.2% -10.2% -9.9% -9.9% -21.4%
Including North Sea revenue (per capita share) -11.1% -10.1% -9.8% -9.7% -21.2%
Including North Sea revenue (geographical share) -11.0% -8.9% -8.4% -8.5% -20.1%
UK -3.3% -2.4% -2.2% -2.3% -12.2%

Confidence intervals

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.

Note that the confidence intervals relate to the latest year of survey data. As GERS often uses data from previous years to estimate values for the latest year, there will likely be larger uncertainty around the latest year estimates than suggested by the table below.

Table A.5: Confidence intervals around survey based apportionments: Scotland
£ million
Central estimate 95% lower bound 95% upper bound Range Range (%)
National insurance contributions 11,476 11,281 11,671 +/-195 +/-1.7%
VAT1 9,635 9,423 9,847 +/-212 +/-2.2%
Tobacco duties 1,333 1,310 1,355 +/-23 +/-1.7%
Alcohol duties 1,231 1,133 1,330 +/-99 +/-8%
Betting and gaming duties 223 220 226 +/-3 +/-1.4%
Insurance premium tax 422 414 431 +/-8 +/-2%
Total survey based apportionments 24,321 23,781 24,860 +/-540 +/-2.2%

1 The estimate of VAT uncertainty is a Scottish Government estimate, based on the Living Costs and Food Survey. It is not a measure of the uncertainty associated with the VAT assignment model. Estimates of this are due to be published later in 2021.

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. For the first time, CRA 2017-18 included a detailed line by line description of the methodology used to apportion spending. While many anomalies in previous editions of the CRA have been addressed and are now reflected in both CRA 2019-20 and this GERS report, a small number of supplementary amendments to the CRA 2019-20 dataset are 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.6. They are discussed in the detailed expenditure methodology paper available at https://www.gov.scot/collections/economy-statistics/#governmentexpenditureandrevenuescotland(gers)

As the CRA for 2020-21 is not yet published, there are no formal amendments to individual spending lines in 2020-21. The 2019-20 adjustments are in effect carried forward into 2020-21, adjusted for the spending of the responsible department. Further detail is provided in the expenditure methodology note.

Table A.6: Amendments to Estimates of Total Public Sector Expenditure on Services from CRA 2020
£ million
2016-17 2017-18 2018-19 2019-20
Amendments from the CRA
High Speed 2 -23 -26 -93 -73
Nuclear-related expenditure -60 -57 -53 -38
Pensions revisions -19 -20 -21 -22
Other minor revisions -67 -53 -80 -6
Total CRA amendments -169 -157 -246 -140

Note: Amendments do not include EU Transactions

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.

This year, there are a number of accounting adjustments which relate to COVID-19. These include business support grants which are administered by local authorities as agents as central government, and therefore have not been included in local government spending. They also include COVID-19 loan guarantee schemes. Some spending associated with these schemes is included in Total Expenditure on Services, as they are included in departmental spending data. However, the final amount of spending included in the Public Sector Finances will depend on the rate of repayment of the loans. A decision has not yet been made on how much expenditure to include in the Public Sector Finances, and as such the departmental spending data is removed from the final spending figures in GERS.

Table A.7: Expenditure Accounting Adjustment: UK
£ million
2016-17 2017-18 2018-19 2019-20 2020-21
UK total managed expenditure (TME) 813,858 836,902 854,565 885,971 1,094,494
UK total expenditure on services (TES) 725,452 748,837 771,213 798,598 999,737
UK accounting adjustment 88,406 88,065 83,352 87,373 94,757
of which current expenditure:
Central government capital consumption 28,113 28,694 29,117 30,009 30,761
Local government capital consumption 12,679 13,243 13,919 14,626 14,994
Current VAT refunds 14,854 15,143 16,016 16,622 17,874
Imputed subsidy from Local Authorities to the Housing Revenue Account1 827 1,124 1,399 2,258 2,069
Imputed flows for Renewable Obligation Certificates 2 4,567 5,424 6,124 6,116 6,296
Local authority pensions 400 200 100 0 0
British Transport Police Service Agreements 145 145 145 145 145
Covid-19 Grants to Local Authorities 0 0 0 0 23,200
Current expenditure residual 4,931 3,650 3,036 5,570 4,099
of which capital expenditure:
Capital VAT refunds 2,594 2,129 2,198 2,257 2,317
Housing associations 7,386 6,330 832 165 165
Student loans 7,477 9,893 12,411 14,144 14,144
Covid-19 Loan schemes 0 0 0 0 -18,900
Capital expenditure residual 4,433 2,090 -1,945 -4,538 -2,407

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.

Table A.8: Expenditure Accounting Adjustment: Scotland
£ million
2016-17 2017-18 2018-19 2019-20 2020-21
Scottish total managed expenditure (TME) 75,716 77,525 79,246 81,977 99,176
Scottish total expenditure on services (TES) 67,983 69,832 71,875 74,502 90,773
Scottish accounting adjustment 7,733 7,693 7,370 7,475 8,403
Percentage of UK accounting adjustment 8.7% 8.7% 8.8% 8.6% 8.9%
Of which current expenditure:
Central government capital consumption 2,760 2,780 2,775 2,866 2,936
Local government capital consumption 1,302 1,359 1,429 1,501 1,539
Current VAT refunds 1,351 1,379 1,465 1,579 1,688
Imputed subsidy from Local Authorities to the Housing Revenue Account1 62 84 104 168 154
Imputed flows for Renewable Obligation Certificates2 542 644 727 726 747
Local authority pensions 37 19 9 0 0
British Transport Police Service Agreements 12 9 12 12 12
Covid-19 Grants to Local Authorities 0 0 0 0 2,192
Current expenditure residual 406 301 248 456 335
Of which capital expenditure:
Capital VAT refunds 236 194 201 214 219
Housing associations 463 443 276 0 0
Student loans 198 311 285 324 324
Covid-19 Loan schemes 0 0 0 0 -1,546
Capital expenditure residual 364 171 -159 -371 -197

1, 2 See notes to Table A.7

The table below shows which parts of the Scottish expenditure accounting adjustments are included as revenues, and where they appear in the revenue tables.

Table A.9: Accounting Adjustments, Revenue and Expenditure: Scotland, 2020-21
Expenditure AA Revenue AA Revenue line
Of which current expenditure: £ million
Central government capital consumption 2,936 2,936 Gross operating surplus
Local government capital consumption 1,539 1,539 Gross operating surplus
Current VAT refunds 1,688 1,688 VAT refunds
Imputed subsidy from Local Authorities to the Housing Revenue Account 154 - n/a
Imputed flows for Renewable Obligation Certificates 747 747 Environmental levies
Local authority pensions 0 - n/a
British Transport Police Service Agreements 12 12 Other taxes, royalties, and adjustments
Covid-19 Grants to Local Authorities 2,192 - n/a
Current expenditure residual 335 - n/a
Of which capital expenditure:
Capital VAT refunds 219 219 VAT refunds
Housing associations 0 - n/a
Student loans 324 - n/a
Covid-19 Loan schemes -1,546 - n/a
Capital expenditure residual -197 - n/a
Total accounting adjustments 8,403 7,140

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 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.

http://www.gov.scot/Publications/2015/03/1422/8

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 2019-20 rather than 2020-21, as this is the latest year for which published accounts are available for both the Scottish Government and Scottish local government. 2020-21 figures in GERS are based on provisional outturn estimates.

Table A.10: Reconciliation of published budget documents to GERS expenditure Table 3.8
£ billion
2019-20
Scottish Government
Published Scottish Government budget1 42.9
Spending by Audit Scotland and Scottish Parliament 0.1
Public corporation (PC) capital spending 0.6
Timing differences 0.9
Total Scottish Government & associated PC expenditure 44.5
Adjustments to align budget to CRA measure of spending
Grants to other public sector bodies (e.g. local government) -11.6
Pensions -4.7
Depreciation -0.9
Financial transactions associated with student loans and public corporations -1.1
Adjustments to move from spend ‘in’ Scotland to spend ‘for’ Scotland2 -0.1
Other -0.8
Final Scottish Government & PC expenditure on services for Scotland 25.3
Scottish Local Government
Published Local Government gross current expenditure3 16.8
Income excluding grants from Central Government4 -5.2
Housing benefit 1.6
Published Local Government gross capital expenditure5 3.8
Income from sales of capital assets6 -0.1
Final Scottish Local Government & associated PC expenditure on services for Scotland 16.9
Scottish Government, Local Government, & PC expenditure on services for Scotland 42.2
National Accounts adjustments7
Capital consumption 4.4
VAT refunds 1.8
Local Government pension fund interest expenditure 1.5
Other accounting adjustments 0.7
Final Scottish Government, Scottish Local Government & PC TME 50.6

1 Scottish Government Budget 2020-21 Annex D

2 These are adjustments made to Scottish Government spending in HM Treasury’s CRA publication. They primarily relate to spending on museums and pensions, to reflect where spending undertaken by the Scottish Government benefits residents from the rest of the UK.

3 Scottish Local Government Finance Statistics 2019-20, Table B. Total General Fund (excluding the Housing Revenue Account and trading with the public) employee costs, operating costs, and support services costs, less inter-authority recharges (adjustments for LFR purposes).

4 As Note 3. Total General Fund (excluding the Housing Revenue Account and trading with the public) income less government grants

5 Scottish Local Government Finance Statistics 2019-20, Table H. All services total gross capital expenditure

6 Scottish Local Government Finance Statistics 2019-20, Table J. Total capital receipts used from asset sales/disposals

7 See Table A.8

Contact

Email: Economic.Statistics@gov.scot

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