Government Expenditure & Revenue Scotland (GERS) 2021-22

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

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Chapter 4 Devolved Revenue and Expenditure

Devolved and Reserved Revenue in Scotland 2021-22
The percentage of Scottish revenue reserved and devolved,  under recent Scotland Acts
Devolved and Reserved Expenditure in Scotland 2021-22
The percentage of Scottish expenditure reserved, currently devolved and to be devolved

Introduction

This chapter provides information on the amount of public sector revenue and expenditure currently devolved to Scotland and how this is changing with the implementation of the Scotland Act 2016.

Devolved Revenue

The table below sets out revenue raised in Scotland from taxes currently devolved to the Scottish Parliament. Total devolved tax revenue in 2021-22 is estimated at £19.0 billion.

Table 4.1: Currently devolved taxes
£ million
2017-18 2018-19 2019-20 2020-21 2021-22
Council tax 2,261 2,354 2,465 2,593 2,647
Non-domestic rates 2,762 2,847 2,761 1,816 2,108
Land and buildings transaction tax (devolved from 2015-16) 557 554 597 517 827
Scottish landfill tax (devolved from 2015-16) 148 149 119 107 125
Non-savings and non-dividend income tax liabilities (devolved from 2016-17)1 10,916 11,556 11,833 11,948 13,342
Total devolved taxes 16,644 17,460 17,775 16,981 19,049

1 This table shows Scottish Rate of Income Tax liabilities rather than receipts in a given year. They are therefore on a different basis to the estimates of total Scottish income tax receipts in Table 1.1. The figure for 2021-22 is the SFC forecast from January 2022.

Further devolution of taxes is due to continue in the next few years, with Air Passenger Duty and Aggregates Levy due to be devolved following the Scotland Act 2016. As well as further tax devolution, the Scotland Act 2016 allows for the first 10p of the standard rate of VAT receipts and the first 2.5p of the reduced rate of VAT receipts in Scotland to be assigned to the Scottish Government, although policy decisions will remain reserved. The transition period for VAT assignment began on 1 April 2019.

As these taxes are not yet devolved there is no outturn data associated with them, and the table below shows the estimated historical revenues from these taxes.

Table 4.2: Revenue to be devolved under Scotland Act 2016
£ million
2017-18 2018-19 2019-20 2020-21 2021-22
Air passenger duty (date of devolution to be decided) 274 290 273 26 96
Aggregates levy (date of devolution to be decided) 57 55 61 57 58
VAT assignment (in transition from 2019-20) 5,305 5,589 5,538 4,856 5,898

Note: Assigned VAT receipts are 50% of total receipts in all years. Whilst this is appropriate when the standard rate of VAT is 20%, VAT on the hospitality and other industries was reduced to 5% in July 2020, and then increased to 12.5% in October 2021. This is not reflected in the current estimates. HMRC will set out more detail of Scottish assigned VAT relating to 2020-21 in September 2022.

Further information on the planned devolution of taxes to the Scottish Government is available in the fiscal framework agreement between the Scottish and UK Governments.[25] Further information on the funding received by the Scottish Government is set out in the Fiscal Framework Outturn Report.[26]

Devolved Social Security

The table below shows the expenditure in Scotland from social security benefits devolved to the Scottish Parliament prior to implementation of Scotland Act 2016.

Table 4.3: Social security devolved prior to Scotland Act 2016
£ million
2017-18 2018-19 2019-20 2020-21 2021-22
Council tax reduction 327 331 335 374 359
Scottish welfare fund 33 35 38 49 54
Discretionary housing payments 59 62 66 76 79
Total 419 429 443 443 492

As social security benefits are devolved to the Scottish Government, they often initially continue to be administered by the Department for Work and Pensions under an Agency Agreement. The table below shows the latest available figures for social security spending which is due to be devolved to the Scottish Government under the Scotland Act 2016.

Table 4.4: Devolved social security under Scotland Act 2016
£ million
2017-18 2018-19 2019-20 2020-21 2021-22
Administered by Social Security Scotland
Best Start Grant (previously Sure Start maternity grant1) 2 4 21 18 29
Funeral Support Payment (previously Funeral Payment2) 5 5 4 11 11
Scottish Child Payment 6 55
Carer's Allowance Supplement 37 59 59
Child Winter Heating Assistance 3 3
Administered by Department and Work and Pensions under an Agency Agreement
Attendance Allowance 492 506 531 528 524
Carer's Allowance 249 266 279 296 295
Disability living allowance 999 893 801 722 697
Personal independence payment 930 1,138 1,332 1,626 1,784
Industrial injuries disablement benefit 82 82 82 83 81
Severe disablement allowance 12 10 9 7 7
Benefits yet to be devolved
Cold weather payments 22 10 29 21 0
Winter fuel payment 176 173 171 171 172
Total expenditure on social security to be devolved 2,969 3,086 3,295 3,551 3,718

Notes:

1 Sure Start maternity grant was replaced in Scotland by the Scottish Government's Best Start Grant on 10 December 2018.

2 Funeral Payments were replaced in Scotland by the Scottish Government's Funeral Support Payments in September 2019

Further information on the planned devolution of taxes and social security to the Scottish Government is available in the fiscal framework agreement between the Scottish and UK Governments.[27] Further information on the funding received by the Scottish Government is set out in the Fiscal Framework Outturn Report.[28]

Summary of current and proposed devolved powers

The table below shows estimates of devolved receipts and expenditure before and after the implementation of the Scotland Acts 2012 and 2016.

Table 4.5: Fiscal powers before and after Scotland Act 2016, 2021-22 (£ million)
Before Scotland Acts 2012 and 2016 After Scotland Acts 2012 and 2016
Non-saving non-dividend income tax liabilities (devolved from 2016-17) - 13,342
Council tax 2,647 2,647
Non-domestic rates 2,108 2,108
Land and buildings transaction tax (devolved from 2015-16) - 827
Scottish landfill tax (devolved from 2015-16) - 125
Air passenger duty (date to be decided) - 96
Aggregates levy (date to be decided) - 58
Total devolved taxes 4,755 19,203
Devolved taxes as % of non-North Sea Scottish revenue 7% 27%
as % of revenue incl geographical share of North Sea revenue 6% 26%
Assigned VAT (in transition from 2019-20) - 5,898
Total devolved and assigned taxes 4,755 25,101
Devolved and assigned taxes as % of non-North Sea Scottish revenue 7% 36%
as % of taxes incl geographical share of North Sea revenue 6% 34%
Devolved expenditure including housing benefit1 (HB) 58,036 61,753
Devolved taxes as % of estimated devolved expenditure 8% 31%
Devolved and Assigned taxes as % of estimated devolved expenditure 8% 41%

1 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.

Contact

Email: economic.statistics@gov.scot

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