Government expenditure & revenue Scotland 2025-26

About this publication

This report is the thirty-third in the series of official published estimates of expenditure and revenue balances of the public sector in Scotland.

Estimates are consistent with the definitions in UK Public Sector Finances. These are based on methodologies to estimate:

• revenues raised from the people and businesses in Scotland; and
• spending on behalf of the people of Scotland (regardless of whether the funding is from Scottish or UK government sources.

The estimates in this publication are based on multiple data sources. While methodology have been agreed with stakeholders a degree of uncertainty around estimate should be noted. Further details are provided in the methodology publication and web tables.

Estimates of revenue including from the North Sea are presented throughout. The geographic method of allocation, compared with the population method, is used as standard. For further details please refer to the methodology publication

The GERS website Economy statistics - gov.scot (www.gov.scot)

contains:

• a copy of the PDF report,
• GERS tables in Excel format and statistics providing a consistent time series of Scotland’s public sector finances from 1998-99 to 2025-26.
• Methodology publication including frequently asked questions and quality measures. These have been moved from the main publication.
• previous versions of the publication

GERS user feedback form.

We are always reviewing our statistical work programme, so our methods and outputs remain robust and meet our stakeholders needs.

Please feedback on the content and format of the GERS publication by completing the form below:

Government Expenditure and Revenue Statistics – User form

Aims of the publication

Estimates published in Government Expenditure and Revenue Scotland (GERS) aim to answer questions about Scotland’s public sector finances as a devolved nation within the United Kingdom:

• What revenues were raised from the population and businesses in Scotland?
• How much was spent on public services, on behalf of the people of Scotland?
• To what extent did estimated revenues raised in Scotland cover the costs of spending on behalf of the people of Scotland

How does GERS relate to devolved public sector finances?

The fiscal balances in GERS compare total public sector spending to total public sector revenue estimates.

At the UK level the equivalent of the net fiscal balance is termed Public Sector Net Borrowing, excluding public sector banks (PSNB ex).

The net fiscal balance, in this publication, does not represent actual borrowing; it is instead a statistical construct showing the difference between the revenue raised from people and businesses in Scotland and the public sector expenditure from which they benefit.

Separate reports are available on Scottish Government and Scottish Local Government finances. The findings from these publications are shown below.

In 2025-26, the devolved public sector borrowed £2.7 billion. This consisted of:

• £430 million of borrowing by the Scottish Government,^[1] which was all capital borrowing with no resource borrowing. (Sourced from Scottish Budget - provisional outturn 2025-2026: briefing note - 18 June 2026 - gov.scot)
• £2,228 million of Local Government borrowing,^[2] which is used only to finance capital expenditure. (Sourced from Local Government 2025-26 Provisional Outturn and 2026-27 Budget Estimates - gov.scot)

Key definitions

Figure 4 Definition of Revenue

Definition

Public sector revenue is estimated where a financial burden is imposed on people or businesses in Scotland. It is the total income (mainly taxes, but also social contributions, interest, dividends, gross operating surplus and transfers) received by central government and local government bodies as well as public sector controlled corporations. It is recorded on an accrued basis, following National Accounts rules.

How Scotland is estimated

In general, revenue is collected UK wide and so separate figures for Scotland are not available, although a small number of devolved taxes are known for Scotland, including the largest single revenue income tax. Where precise estimates are not available UK revenue totals are taken from UK Public Sector Finances and allocated to Scotland based on the principle of ‘who pays’.

Figure 5 Definition of Expenditure

Definition

Public Sector Expenditure is the total capital and current spending (mainly wages and salaries, goods and services and investment expenditure, but also subsidies, social benefits and other transfers) of central government and local government bodies as well as public sector-controlled corporations. It is recorded on an accrued basis, following National Accounts rules.

How Scotland is estimated

Public sector expenditure is estimated on the basis of spending incurred to provide services for residents of Scotland.

A particular public sector expenditure is allocated to Scotland if the outcome of the expenditure is thought to provide a public service which benefits residents of Scotland.

This is a different measure from total public expenditure in Scotland.

Examples of the ‘for’ and ‘in’ approach

For most expenditure, spending for or in Scotland will be similar.

For example, the vast majority of health expenditure by NHS Scotland occurs in Scotland and is for patients resident in Scotland. Therefore, the in and for approaches should yield virtually identical assessments of expenditure.

For expenditure where the service provided is more collective in nature, such as defence, an assessment of ‘who the service is for’ depends upon the nature of the specific type of expenditure being assessed.

Where there are differences between the for and in approaches, GERS estimates Scottish expenditure using a set of apportionment methodologies, refined over a number of years following consultation with and feedback from users. The for approach considers the location of the recipients of services or transfers that public sector expenditure finances, irrespective of where the expenditure takes place.

Taking defence expenditure for example. As the service provided is a national ‘public good’, the for methodology operates on the premise that the entire UK population benefits from the provision of a national defence service. Accordingly, under the for methodology, national defence expenditure is apportioned across the UK on a population basis.

Main Data Sources

Revenues

ONS’s Public Sector Finances, provides figure relating to UK public sector revenue by revenue type. Revenues are allocated to Scotland based on a who pays basis https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/bulletins/publicsectorfinances/june2026

Scottish Public Sector Expenditure

Spending by the Scottish Government is provided directly by the Scottish Government Directorate for Financial Management

HM Treasury’s Public Expenditure Statistical Analyses

HMT Public Expenditure Statistical Analyses (PESA) - GOV.UK (www.gov.uk)

Country and Regional Analysis (CRA).

Country and regional analysis - GOV.UK (www.gov.uk)

Other sources

Scottish Gross Domestic Product (GDP) in current market prices published in the Quarterly National Accounts Scotland (QNAS).

Economy statistics - gov.scot (www.gov.scot)

For a more comprehensive list of sources refer to the methodology publication

Scotland’s Share of North Sea Revenue

As North Sea revenue is not reported for Scotland, an assumption as to Scotland’s share of the North Sea needs to be made.Two estimates of Scotland’s share of North Sea revenue are shown in GERS:

1. An illustrative geographical share

2. A population share

This publication uses with estimates for revenue inclusive of a geographic share of North Sea revenue, as standard, although figures based on a population share are also shown.

The most common approach to estimating North Sea revenue is to apportion a share of North Sea revenue to Scotland on the geographical location of oil and gas fields.

In order to estimate this share, GERS uses the share reported in the ONS Country and Regional Public Sector Finances publication. Country and regional public sector finances, UK: financial year ending 2025 - Office for National Statistics.

For further details refer to the methodology publication.