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.

This document is part of a collection


Annex 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)
2017-18 2018-19 2019-20 2020-21 2021-22
Scotland 5,428 5,444 5,464 5,469 5,480
UK 66,139 66,526 66,868 67,056 66,980
As % of UK total 8.2% 8.2% 8.2% 8.2% 8.2%

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
2017-18 2018-19 2019-20 2020-21 2021-22
Current Budget
Revenue
Excluding North Sea revenue 61,174 63,754 65,225 61,900 70,311
Including North Sea revenue (population share) 61,280 63,852 65,277 61,942 70,573
Including North Sea revenue (geographical share) 62,315 65,114 66,057 62,665 73,776
Current expenditure 68,551 70,519 72,915 87,552 85,628
Capital consumption 5,450 5,942 6,164 5,783 5,499
Balance on current budget (surplus is positive, deficit is negative)
Excluding North Sea revenue -12,827 -12,708 -13,854 -31,435 -20,816
Including North Sea revenue (population share) -12,721 -12,610 -13,802 -31,392 -20,554
Including North Sea revenue (geographical share) -11,686 -11,347 -13,021 -30,670 -17,352
Capital Budget
Capital expenditure 8,836 9,013 9,045 10,887 11,874
Capital consumption -5,450 -5,942 -6,164 -5,783 -5,499
Net Investment 3,386 3,071 2,881 5,104 6,375
Net Fiscal Balance (surplus is positive, deficit is negative)
Excluding North Sea revenue -16,213 -15,778 -16,735 -36,539 -27,191
Including North Sea revenue (population share) -16,106 -15,681 -16,682 -36,497 -26,929
Including North Sea revenue (geographical share) -15,071 -14,418 -15,902 -35,774 -23,727

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
2017-18 2018-19 2019-20 2020-21 2021-22
Scottish GDP
Excluding North Sea and share of UK extra-regio 158,200 162,966 166,579 151,902 173,782
Including North Sea (population share) 159,493 164,723 168,120 152,612 175,799
Including North Sea (geographical share) 169,759 179,055 180,597 157,910 192,584
UK GDP 2,111,738 2,199,704 2,260,614 2,140,996 2,376,012

Source: Quarterly National Accounts Scotland, Economy statistics - gov.scot (www.gov.scot); 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
2017 2018 2019 2020 2021
Net Fiscal Balance
Excluding North Sea revenue -15,954 -16,409 -16,922 -33,230 -30,319
Including North Sea revenue (per capita share) -15,858 -16,315 -16,839 -33,219 -30,186
Including North Sea revenue (geographical share) -14,826 -15,186 -15,774 -32,832 -28,475
UK -49,341 -46,950 -49,780 -269,874 -182,771
As % of GDP
Excluding North Sea revenue -10.1% -10.2% -10.2% -21.6% -18.1%
Including North Sea revenue (per capita share) -10.0% -10.0% -10.0% -21.5% -17.8%
Including North Sea revenue (geographical share) -8.8% -8.6% -8.7% -20.3% -15.8%
UK -2.4% -2.2% -2.2% -12.6% -7.9%

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 12,243 12,035 12,451 +/-208 +/-1.7%
VAT1 11,796 11,230 12,363 +/-566 +/-4.8%
Tobacco duties 1,290 1,268 1,312 +/-22 +/-1.7%
Alcohol duties 1,299 1,195 1,403 +/-104 +/-8%
Betting and gaming duties 223 220 226 +/-3 +/-1.4%
Insurance premium tax 474 464 483 +/-9 +/-2%
Total survey based apportionments 27,326 26,413 28,238 +/-913 +/-3.3%

1 The estimate of VAT uncertainty is a Scottish Government estimate, based on data published as part of the Scottish VAT Assignment experimental statistics publication[29]

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 concerns in previous editions of the CRA have been addressed and are now reflected in both CRA 2020‑21 and this GERS report, a small number of supplementary amendments to the CRA 2020‑21 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:

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

As the CRA for 2021-22 is not yet published, there are no formal amendments to individual spending lines in 2021-22. The 2020-21 adjustments are in effect carried forward into 2021‑22, 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 2021
£ million
2017-18 2018-19 2019-20 2020-21
Amendments from the CRA
High Speed 2 -26 -93 -72 -80
Nuclear-related expenditure -56 -51 -37 -8
R&D tax credit revisions -145 -206 -312 -332
Other minor revisions -57 -70 -1 13
Total CRA amendments -284 -420 -421 -406

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.

Some elements of COVID-19 expenditure continue to be captured through accounting adjustments. 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.

Table A.7: Expenditure Accounting Adjustment: UK
£ million
2017-18 2018-19 2019-20 2020-21 2021-22
UK total managed expenditure (TME) 836,449 857,306 884,119 1,104,299 1,060,301
UK total expenditure on services (TES) 748,391 770,672 796,859 1,011,433 952,319
UK accounting adjustment 88,058 86,634 87,260 92,866 107,982
of which current expenditure:
Central government capital consumption 28,636 29,098 29,996 30,761 31,785
Local government capital consumption 14,063 14,741 15,476 15,867 16,537
Current VAT refunds 15,143 16,016 16,621 17,868 19,781
Imputed subsidy from Local Authorities to the Housing Revenue Account1 1,124 1,403 2,183 1,941 3,692
Imputed flows for Renewable Obligation Certificates 2 5,424 6,124 6,116 6,296 6,296
Local authority pensions 200 100 0 0 0
British Transport Police Service Agreements 145 145 145 145 145
Covid-19 Grants to Local Authorities 0 0 0 23,200 14,400
Current expenditure residual 4,178 2,414 4,764 -14,824 -9,775
of which capital expenditure:
Capital VAT refunds 2,129 2,198 2,257 2,316 2,564
Housing associations 6,330 520 165 165 165
Student loans 9,170 10,247 9,390 10,438 10,438
Capital expenditure residual 1,516 3,628 147 -1,308 11,954

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
2017-18 2018-19 2019-20 2020-21 2021-22
Scottish total managed expenditure (TME) 77,387 79,532 81,960 98,439 97,502
Scottish total expenditure on services (TES) 69,775 71,855 74,250 90,059 87,945
Scottish accounting adjustment 7,612 7,677 7,709 8,380 9,557
Percentage of UK accounting adjustment 8.6% 8.9% 8.8% 9.0% 8.9%
Of which current expenditure:
Central government capital consumption 2,774 2,773 2,865 2,936 3,035
Local government capital consumption 1,443 1,513 1,588 1,629 1,697
Current VAT refunds 1,378 1,464 1,547 1,575 1,738
Imputed subsidy from Local Authorities to the Housing Revenue Account1 84 104 162 145 275
Imputed flows for Renewable Obligation Certificates2 644 727 726 747 747
Local authority pensions 19 9 0 0 0
British Transport Police Service Agreements 9 12 12 12 12
Covid-19 Grants to Local Authorities 0 0 0 2,192 1,397
Current expenditure residual 344 197 392 -1,205 -796
Of which capital expenditure:
Capital VAT refunds 194 201 210 204 225
Housing associations 443 276 0 0 0
Student loans 156 104 196 253 253
Capital expenditure residual 124 297 11 -106 974

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, 2021-22
Expenditure AA Revenue AA Revenue line
Of which current expenditure: £ million
Central government capital consumption 3,035 3,035 Gross operating surplus
Local government capital consumption 1,697 1,697 Gross operating surplus
Current VAT refunds 1,738 1,738 VAT refunds
Imputed subsidy from Local Authorities to the Housing Revenue Account 275 - 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 1,397 - n/a
Current expenditure residual -796 - n/a
Of which capital expenditure:
Capital VAT refunds 225 225 VAT refunds
Housing associations 0 - n/a
Student loans 253 - n/a
Capital expenditure residual 974 - n/a
Total accounting adjustments 9,557 7,454

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.

chapter 5: Public Sector Expenditure - Government Expenditure & Revenue Scotland 2013-14 - gov.scot (www.gov.scot)

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 2020-21 rather than 2021-22, as this is the latest year for which published accounts are available for both the Scottish Government and Scottish local government. 2021-22 figures in GERS are based on provisional outturn estimates.

Table A.10: Reconciliation of published budget documents to GERS expenditure Table 3.8
£ billion
2020-21
Scottish Government
Published Scottish Government budget1 55.4
Spending by Audit Scotland and Scottish Parliament 0.1
Public corporation (PC) capital spending 0.5
Timing differences -0.3
Total Scottish Government & associated PC expenditure 55.8
Adjustments to align budget to CRA measure of spending
Grants to other public sector bodies (e.g. local government) -15.3
Pensions -4.5
Depreciation -0.6
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 -0.3
Final Scottish Government & PC expenditure on services for Scotland 34.0
Scottish Local Government
Published Local Government gross current expenditure3 17.3
Income excluding grants from Central Government4 -5.0
Housing benefit 1.4
Published Local Government gross capital expenditure5 2.6
Income from sales of capital assets6 0.0
Final Scottish Local Government & associated PC expenditure on services for Scotland 16.3
Scottish Government, Local Government, & PC expenditure on services for Scotland 50.2
National Accounts adjustments7
Capital consumption 4.6
VAT refunds 1.8
Local Government pension fund interest expenditure 2.3
Other accounting adjustments 0.4
Final Scottish Government, Scottish Local Government & PC TME 59.2

1 Scottish Government Budget 2022-23 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 2020-21, LA Level -3. Revenue Expenditure and Income by Service and Type. Total General Fund (excluding the Housing Revenue Account and trading with the public) employee costs, operating costs, and support services costs after statutory adjustments, less interauthority 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 2020-21, publication tables Capital Expenditure (chart 3.1) and Financing (chart 3.5). All services total gross capital expenditure.

6 As Note 5. Total capital fund and capital receipts.

7 See Table A.8

Contact

Email: economic.statistics@gov.scot

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