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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Annex B Revisions

This section presents revisions from the previous GERS 2019-20 publication.

Revisions to Non-North Sea Revenue Estimates from GERS 2020-21

Table B.1 summarises the revisions in this edition of GERS to total non-North Sea revenue. Revisions to Scottish estimates can stem from three sources: revisions to UK totals; revisions to apportionment data; and updated apportionment methodologies.

There are a number of revisions to UK revenue totals from GERS 2020-21. However these are relatively small, and overall UK revenue for 2020-21 has been revised by 0.3%. The main revisions relate to income tax, corporation tax, and non-domestic rates, where revenue has been affected by the pandemic. This is offset by upward revisions to gross operating surplus, reflecting the incorporation of train operating companies into the public sector as public corporations.

Further detail on all these revisions is available from the UK Public Sector Finances.[30]

Table B.1: Revision to Estimates of Total Non-North Sea Revenue
£ million
2017-18 2018-19 2019-20 2020-21
Scotland
Estimates published in GERS 2020-21 61,225 64,158 65,312 62,287
Estimates published in GERS 2021-22 61,174 63,754 65,225 61,900
Revision (£m) -51 -404 -88 -387
UK
Estimates published in GERS 2020-21 781,950 815,193 828,358 796,386
Estimates published in GERS 2021-22 780,016 812,855 828,679 794,210
Revision (£m) -1,934 -2,338 321 -2,176
Scotland/UK ratio
Estimates published in GERS 2020-21 7.8% 7.9% 7.9% 7.8%
Estimates published in GERS 2021-22 7.8% 7.8% 7.9% 7.8%
Revision (% point) 0.0% 0.0% 0.0% 0.0%

Scottish revisions broadly reflect these UK revisions, the main difference relating to national insurance contributions, where the latest outturn data has resulted in a larger downward revision to Scottish revenue.

Table B.2: Revision to Estimates of Public Sector Revenue: Scotland and UK 2020-21
£ million %
Scotland UK Scotland UK
Income tax -107 -2,575 -0.8% -1.3%
National insurance contributions -460 -184 -4.0% -0.1%
Value added tax 77 -602 0.8% -0.5%
Corporation tax (excluding North Sea) 249 4,001 7.8% 7.9%
Fuel duties -49 25 -2.8% 0.1%
Non-domestic rates 0 -1,698 0.0% -8.0%
Council tax -7 -877 -0.3% -2.3%
VAT refunds -128 -7 -6.7% 0.0%
Capital gains tax 26 519 5.4% 4.9%
Inheritance tax 0 0 0.0% 0.0%
Reserved stamp duties -2 1 -0.8% 0.0%
Scottish Land & Buildings transaction tax 3 3 0.5% 0.5%
Scottish landfill tax 0 0 0.2% 0.2%
Air passenger duty -8 3 -24.6% 0.9%
Tobacco duties -87 2 -6.5% 0.0%
Alcohol duties -27 -291 -2.2% -2.3%
Insurance premium tax 16 -75 3.7% -1.2%
Vehicle excise duties 0 0 -0.1% 0.0%
Environmental levies 0 0 0.0% 0.0%
Other taxes -122 -1,134 -5.5% -4.3%
Total Non-North Sea taxes -627 -2,889 -1.2% -0.4%
Other Revenue
Interest and dividends -111 -1,541 -5.3% -6.1%
Gross operating surplus 347 2,284 5.6% 4.1%
Other receipts 4 -30 0.9% -0.9%
Total non-North Sea revenue - 387 -2,176 -0.6% -0.3%

A time series of revisions is available in the accompanying spreadsheets online.

Revisions to North Sea Revenue Estimates from GERS 2020-21

Table B.3 summarises the revisions to North Sea revenues in this edition of GERS by comparing the estimates contained in this report with last year's publication. Revenue has been revised up in 2020-21, reflecting updated both revisions to the UK total but also updates to the assessment of corporation tax paid by fields in Scottish waters. Estimates for previous years are largely unrevised.

Table B.3: Revisions to North Sea Revenue: 2017-18 to 2020-21
£ million
2017-18 2018-19 2019-20 2020-21
Scotland (illustrative geographical share)
Estimates published in GERS 2020-21 1,142 1,358 844 550
Estimates published in GERS 2021-22 1,141 1,361 833 765
Revision 0 3 -11 215
UK
Estimates published in GERS 2020-21 1,297 1,196 643 414
Estimates published in GERS 2021-22 1,297 1,196 643 522
Revision 0 0 0 108

Revisions to Expenditure Estimates from GERS 2020-21

Table B.4 sets out the changes in estimates of public expenditure in Scotland and the UK between this report and GERS 2020-21. These reflect revisions to Scottish Government and Scottish local government spending data, revisions to UK spending totals, and revisions to the data sources used to apportion expenditure to Scotland. Revisions to public expenditure that can be traced to changes to the total expenditure on services (TES) measure are specified separately.

The main revisions to spending relate to the coronavirus loan schemes. Scotland was allocated a population share of this expenditure in last year's publication. This has been revised down to be consistent with the shares published in the Country and Regional Analysis publication, which reflect the location of the businesses receiving the loans.

The main methodological change relates to the treatment of tax credits. Scotland's share of this expenditure has been reduced in order to bring it into line with the regional information published in HMRC's Corporate Tax: Research and Development Tax Credits publication:

Corporate tax: Research and Development Tax Credits - GOV.UK (www.gov.uk)

Within GERS, we also assume that the share of research and development tax credits is a good approximation for wider company tax credits paid out by HMRC.

There have also been revisions to estimates of spending associated with student loans, as the methodology for bringing this spending into the public sector has been revised from the initial estimates included last year. The revisions to Scottish spending are broadly in line with those for the UK, apart from public sector interest expenditure, where the methodology change sees higher spending in Scotland. Scotland's share of total public sector expenditure is in general slightly higher in most years as a result of this change. .

Table B.4: Revisions to Estimates of Total Managed Expenditure: 2017-18 to 2020-21
£ million
2017-18 2018-19 2019-20 2020-21
Scotland
Estimates published in GERS 2020-21 77,525 79,246 81,977 99,176
Estimates published in GERS 2021-22 77,387 79,532 81,960 98,439
Revision -138 286 -18 -737
Of which revisions to student loans -155 -181 -128 -71
UK
Estimates published in GERS 2020-21 836,902 854,565 885,971 1,094,494
Estimates published in GERS 2021-22 836,449 857,306 884,119 1,104,299
Revision -453 2,741 -1,852 9,805
Of which revisions to student loans -723 -2,164 -4,754 -3,706
Scotland/UK Ratio
Estimates published in GERS 2020-21 9.3% 9.3% 9.3% 9.1%
Estimates published in GERS 2021-22 9.3% 9.3% 9.3% 8.9%
Revision (% point) 0.0% 0.0% 0.0% -0.1%

The table below shows the revisions to spend in 2020-21 by function, and by Scottish Government, Scottish local government, Scottish public corporations, and Other UK government bodies. Overall, Scottish spend in 2020-21 has been revised down by £737 million, primarily due to revisions to enterprise and economic development expenditure.

Table B.5: Revisions to Estimates of Public Sector Expenditure: Scotland and UK 2020-21
£ million
Scotland UK
Scottish Government Local Government Scottish Public Corporations Other UK Government Bodies Total
General public services
Public and common services -1 -293 0 3 -291 1,066
International services 0 0 0 -9 -9 -65
Public sector interest expenditure 0 0 0 441 441 353
Defence 0 2 0 -12 -10 25
Public order and safety 9 0 0 7 16 256
Economic affairs
Enterprise and economic development -66 -41 0 -1,746 -1,853 2,992
Science and technology 0 0 0 188 188 -133
Employment policies 0 0 0 -11 -11 2
Agriculture, forestry and fisheries 29 27 0 -12 44 -38
Transport -1 21 -19 118 120 4,667
Environment protection 4 -66 0 -11 -73 379
Housing and community amenities 0 -173 -8 0 -172 -286
Health -7 0 0 29 22 -867
Recreation, culture and religion 0 2 0 -106 -105 614
Education and training -6 596 0 -10 580 -530
Social protection -12 -87 0 181 82 2,071
EU Transactions 0 0 0 317 317 1,191
Accounting adjustments -237 0 118 96 -23 -1,892
Total revision -289 -12 91 -537 -737 9,805

Revisions to Estimates of Capital Consumption

Table B.6 sets out the changes to estimates of capital consumption in Scotland and the UK between this report and the previous publication of GERS. Capital consumption, which represents the capital stock consumed to provide services within the year, is included alongside current expenditure when calculating the current budget balance. It does not affect the estimate of the net fiscal balance.

Table B.6: Revisions to capital consumption: 2017-18 to 2020-21
£ million
2017-18 2018-19 2019-20 2020-21
Scotland
Estimates published in GERS 2020-21 5,334 5,737 6,074 8,607
Estimates published in GERS 2021-22 5,450 5,942 6,164 5,783
Revision 116 205 90 -2,825

In general, capital consumption in all years has been revised down in all years, reflecting updated data from the ONS.

Unlike for public corporations' expenditure and operating surplus, detailed capital consumption data are not available on a public corporation basis from the ONS, as they are not separately identified within its perpetual inventory model.

Revisions to Fiscal Aggregates

Table B.7 shows revisions to the current budget balance from the previous publication of GERS. The Scottish current budget deficit has increased in all years. This reflects the revisions to public sector interest expenditure discussed above.

Table B.7: Revisions to Estimates of the Current Budget Balance: 2017-18 to 2020-21
£ million
2017-18 2018-19 2019-20 2020-21
Estimates published in GERS 2020-21
Excluding North Sea revenue -12,596 -12,086 -13,937 -35,693
Including North Sea revenue (per capita share) -12,490 -11,989 -13,884 -35,659
Including North Sea revenue (geographical share) -11,455 -10,728 -13,092 -35,143
UK -8,349 5,406 -13,813 -242,836
Estimates published in GERS 2021-22
Excluding North Sea revenue -12,827 -12,708 -13,854 -31,435
Including North Sea revenue (per capita share) -12,721 -12,610 -13,802 -31,392
Including North Sea revenue (geographical share) -11,686 -11,347 -13,021 -30,670
UK -12,123 2,336 -12,796 -238,047
Difference (£ million) (positive shows improvement)
Excluding North Sea revenue -231 -621 82 4,258
Including North Sea revenue (per capita share) -231 -621 82 4,267
Including North Sea revenue (geographical share) -231 -619 71 4,473
UK -3,774 -3,070 1,017 4,789

Table B.8 shows revisions to the net fiscal balance from the previous publication of GERS. In general, these are similar to the revisions to the current budget balance for Scotland

Table B.8: Revisions to Estimates of the Net Fiscal Balance: 2017-18 to 2020-21
£ million
2017-18 2018-19 2019-20 2020-21
Estimates published in GERS 2020-21
Excluding North Sea revenue -16,300 -15,088 -16,665 -36,889
Including North Sea revenue (per capita share) -16,194 -14,990 -16,612 -36,856
Including North Sea revenue (geographical share) -15,159 -13,729 -15,821 -36,340
UK -53,655 -38,176 -56,970 -297,694
Estimates published in GERS 2021-22
Excluding North Sea revenue -16,213 -15,778 -16,735 -36,539
Including North Sea revenue (per capita share) -16,106 -15,681 -16,682 -36,497
Including North Sea revenue (geographical share) -15,071 -14,418 -15,902 -35,774
UK -55,136 -43,255 -54,797 -309,567
Difference (£ million) (positive shows improvement)
Excluding North Sea revenue 87 -691 -70 350
Including North Sea revenue (per capita share) 87 -691 -70 359
Including North Sea revenue (geographical share) 87 -688 -81 566
UK -1,481 -5,079 2,173 -11,873

In addition to revisions to the fiscal aggregates in cash terms, there are also changes to the fiscal aggregates expressed as a share of GDP due to revisions to GDP estimates. These are shown in Tables B.9 and B.10 for the current budget balance and the net fiscal balance respectively. For years prior to 2020-21, estimates are largely unchanged. In 2020-21, estimates of the fiscal aggregate have worsened as a share of GDP for Scotland. These revisions reflect the downward revision to the nominal value GDP made in the Quarterly National Accounts Scotland for 2021Q3. This reflects routine annual update to bring the value of GVA in line with the latest UK regional accounts. Revisions to GDP in 2020-21 are larger than in previous years due to the challenges of measuring the economy during the pandemic.

Table B.9: Impact of Revisions to GDP on Estimates of the Current Budget Balance
2017-18 2018-19 2019-20 2020-21
Estimates published in GERS 2020-21 % of GDP
Excluding North Sea revenue -8.0% -7.4% -8.3% -23.1%
Including North Sea revenue (population share) -7.9% -7.2% -8.2% -22.9%
Including North Sea revenue (geographical share) -6.8% -6.0% -7.3% -21.7%
UK -0.4% 0.3% -0.6% -11.6%
GERS 2020-21 estimate with latest GDP estimates % of GDP
Excluding North Sea revenue -8.0% -7.4% -8.4% -23.5%
Including North Sea revenue (population share) -7.8% -7.3% -8.3% -23.4%
Including North Sea revenue (geographical share) -6.7% -6.0% -7.2% -22.3%
UK -0.4% 0.2% -0.6% -11.3%
Change (positive denotes improvement) % point difference
Excluding North Sea revenue 0.0% 0.0% 0.0% -0.4%
Including North Sea revenue (population share) 0.0% 0.0% 0.0% -0.5%
Including North Sea revenue (geographical share) 0.0% 0.0% 0.1% -0.6%
UK 0.0% 0.0% 0.0% 0.2%
Table B.10: Impact of Revisions to GDP on Estimates of the Net Fiscal Balance
2017-18 2018-19 2019-20 2020-21
Estimates published in GERS 2020-21 % of GDP
Excluding North Sea revenue -10.3% -9.2% -10.0% -23.8%
Including North Sea revenue (population share) -10.2% -9.1% -9.9% -23.7%
Including North Sea revenue (geographical share) -8.9% -7.7% -8.8% -22.4%
UK -2.6% -1.8% -2.6% -14.2%
GERS 2020-21 estimate with latest GDP estimates % of GDP
Excluding North Sea revenue -10.3% -9.3% -10.0% -24.3%
Including North Sea revenue (population share) -10.2% -9.1% -9.9% -24.1%
Including North Sea revenue (geographical share) -8.9% -7.7% -8.8% -23.0%
UK -2.5% -1.7% -2.5% -13.9%
Change (positive denotes improvement) % point difference
Excluding North Sea revenue 0.0% -0.1% 0.0% -0.5%
Including North Sea revenue (population share) 0.0% 0.0% 0.0% -0.5%
Including North Sea revenue (geographical share) 0.0% 0.0% 0.1% -0.6%
UK 0.0% 0.0% 0.0% 0.3%

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