Investing in Scotland's Future: Resource Spending Review

The Resource Spending Review is a public finance document. It sets out the high-level parameters for resource spending to 2026-27 and outlines our high-level spending plans to deliver our Programme for Government and Bute House commitments.

Annex E: Glossary

Barnett Formula: a formula used by HM Treasury to calculate consequentials which form the Block Grant to devolved governments in Scotland, Wales and Northern Ireland. The Barnett formula seeks to give these governments a proportion (or consequential) of UK expenditure incurred in policy areas which are devolved.

Budget: a document prepared by the government to present its anticipated tax revenues and proposed spending/expenditure for a financial year.

Block Grant: the grant received by the Scottish Government made up consequentials of UK expenditure, calculated by the Barnett Formula.

Block Grant Adjustment (BGA): deductions from the Scottish Government's total Block Grant to reflect devolved tax receipts or social security expenditure.

Capital Borrowing: money borrowed specifically for the purpose of Capital Expenditure.

Capital Expenditure: money spent on providing or improving non-current assets, which include land, buildings and equipment, which will be of use or benefit in providing services for more than one financial year.

Consequentials or Barnett Consequentials: a Barnett Consequential is the change to a devolved administration's assigned budget because of changes in comparable spending by the UK Government.

Deficit: occurs when a government spends more money than it takes in.

Demand-led: refers to expenditure which can be predicted at the beginning of the year e.g. the payment of benefits which will depend on the number of eligible claimants. Usually managed through Annually Managed Expenditure (AME).

Fair Work: work that supports job security, fair reward, and opportunities for personal and workplace development.

Fiscal Framework: the Fiscal Framework agreement was published alongside the Scotland Act 2016 setting out the new funding arrangements, fiscal rules, borrowing powers and limits for the Scottish Government.

Fiscal Framework Review: the Fiscal Framework is due to be reviewed in 2022. The review will be preceded by an independent report, on the Block Grant Adjustment arrangements.

Funding Outlook: projection of future funding built up by forecasting separate elements of funding and then aggregating these to produce a path for the total level of potential funding.

Gross Domestic Product: a measure of the size and health of a country's economy over a period of time (usually one quarter or one year).

Income Distribution: covers how a country's total GDP is distributed amongst its population.

Inflation: the increase in prices over time. How quickly those prices go up is the rate of inflation.

Just Transition: the approach to addressing climate change and creating a more cohesive and resilient economy that improves the opportunities, life chances, and wellbeing of every citizen in our country.

National Outcome NPF: outcomes for Scotland determined by Scottish Ministers in consultation with the communities in Scotland and the Scottish Parliament, which are reviewed at least every 5 years.

Net Zero: achieving an overall balance between emissions produced and emissions taken out of the atmosphere.

Omicron: variant of the COVID-19 virus which became dominant in the UK in December 2021.

Reconciliations: adjustments to address historical budgets' forecast errors.

Resource Borrowing: money borrowed specifically for the purpose of Resource Expenditure.

Resource Expenditure: money that is spent on day-to-day resources and administration costs.

Resource Spending Review: a review to balance the spending ambitions of the new Scottish Government within its fiscal constraints.

Scotland Reserve: enables the Scottish Government to manage volatility associated with the fiscal powers.

Social Security: monetary assistance from the state for people with an inadequate or no income.

UK Spending Review: allocation of funding to government departments.

Volatility: the tendency to change rapidly and unpredictably.

Wellbeing economy: an economy that is inclusive and that promotes sustainability, prosperity and resilience, where businesses can thrive and innovate, and that supports all communities across Scotland to access opportunities that deliver local growth and wellbeing.



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