Scottish Public Finance Manual

The Scottish Public Finance Manual (SPFM) is issued by the Scottish Ministers to provide guidance on the proper handling and reporting of public funds.

Annual budgeting process


1. This section gives guidance on the annual process by which the spending plans of the Scottish Ministers and other bodies funded directly from the Scottish Consolidated Fund are scrutinised and authorised by the Scottish Parliament.

Key points

2. Following an independent review of the budget process in 2017, the budgeting process is now a year round process involving consideration by the Parliament of indicative spending priorities, budgeting for outcomes and the detailed expenditure and tax proposals for the upcoming financial year which are documented in the Scottish Budget and formalised in the Budget Bill and Scottish Rate Resolution. As an aid to year round scrutiny of the budget by the Parliament, the Scottish Government also publishes a Medium Term Financial Strategy and a Fiscal Framework Outturn Report.

3. The Budget Bill includes expenditure which the Parliament has to approve but is not formally for the Scottish Government to propose - notably expenditure by the Scottish Parliament Corporate Body and by Audit Scotland.

4. In-year transfers of provision between individual entities identified in the Budget Act require the prior approval of the Parliament.

5. In-year transfers of provision between "budget sections" in excess of £75 million (at 2016 values) or 15% of the budget for the receiving section require the prior approval of the Parliament.


6. Section 1 of the Public Finance and Accountability (Scotland) Act 2000 provides that the use of resources by the Scottish Administration and other bodies funded directly from the Scottish Consolidated Fund must be authorised on an annual basis by Budget Act. The Budget Act (as amended by Order) and supported by Budget Documents specifies the purpose for which resources may be used and the maximum amount of related expenditure in the particular financial year to which the Budget Act relates. The principles and procedures for the annual budgeting process, the format of the budget documents and procedures for in-year reallocation of budgetary provision are the subject of a Written Agreement between the Scottish Government and the Scottish Parliament Finance and Constitution Committee.

7. Fiscal, economic and monetary policy, including control over public expenditure, are reserved matters. As a result the devolved administrations‚Äô budgets are set within a framework of public expenditure control and budgeting guidance determined by HM Treasury. Once overall public expenditure budgets have been determined in accordance with the Statement of Funding Policy, the devolved administrations have freedom to make their own spending decisions on devolved programmes but that must take place within the overall totals set by HM Treasury and in compliance with the Consolidated Budgeting Guidance published by HM Treasury.


Page updated: 2021


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