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The Scottish Public Finance Manual (SPFM) is issued by the Scottish Ministers to provide guidance on the proper handling and reporting of public funds.
1. This section provides guidance on the spending review process during which Scottish Ministers undertake a detailed examination of portfolio budgets to set future spending plans and targets over a multi-year period.
2. The aim of a spending review is to develop a longer term spending plan for Scotland. A spending review will be tailored in its approach including the period which it covers. In the past, spending reviews have commonly covered a three year period although they can cover shorter or longer periods.
Funding arrangements for Scotland
3. The UK Government provides funding to the Scottish Government via a “Block Grant”. This is derived by applying the population-based Barnett formula to changes in planned spending on comparable services by UK government departments. This funding arrangement is detailed in the HM Treasury “Statement of Funding Policy”.
4. The Scottish Government can also raise income through devolved taxes. Under the Fiscal Framework agreed with the UK Government, the Block Grant provided to the Scottish Government is reduced to account for any revenues the UK Government foregoes by devolving these taxes. Further detail on the operation of the Fiscal Framework is set out in the Scottish Government’s “Fiscal Framework Outturn Report”.
5. When the UK Government provides Scottish Ministers with a firm indication of funding over a multiple year period, this enables Scottish Ministers to plan their spend priorities over a longer period. A spending review is part of this planning process.
Key points
6. The spending review process in Scotland is managed by Scottish Government officials who scrutinise and challenge portfolio expenditure proposals across the Scottish Government and provide advice to portfolios and Ministers.
7. The spending review process helps Scottish Ministers identify their key spend priorities over a multiple year period. This can result in Scottish Ministers developing a Scottish Budget for more than one year. However, these are separate activities. When Scottish Ministers undertake a spending review, they have a choice on how to approach the determination of future Scottish Budgets including whether they wish to set a Scottish Budget for more than one year.
Updates to wording of Annex 2 Internal control checklist for Certificates of Assurance.
New FGN note added - FGN 2025/03 financial memoranda that accompany Scottish Government bills.
Updates to the following sections following SPFM Strategic Review: Foreword, Accountability (and annexes), risk and subsidy Control. Also the addition of FGN 2025/02 explaining the updates
Link in point 23 of Settlement, Severance, Early Retirement, Redundancy section updated.
numbering in Annex 2 Internal control checklist for Certificates of Assurance updated due to a typo
Updated Annex 2 Internal control checklist for Certificates of Assurance, added FGN 2025/01 re CoA checklist and added in a word version of the checklist.
updated missing text in document SPFM - Non-Ministerial Offices model framework document July 2024.
Adding in FGN 2024/03 re the updated AO Spend Control Template and Guidance.
Updating the SRO Appointment letter in the documents section to include a point on construction projects in the Annex.
Executive agencies model framework document updated.
Non-Ministerial Offices model framework document updated.
Updating the SRO Appointment letter in the documents section to this years dates
Updated link to 'On Board: A Guide for Members of Statutory Boards' within Governance statements chapter.
Updates made to model framework document templates.
Updates made to text within Procurement chapter.
Replaced non-ministerial office model framework document and advisory non-departmental public bodies model framework with updated versions.
Document updated with an additional date - Settlement Agreement supporting documentation - final confirmation of terms
Replaced Non-Ministerial Offices model framework document
Updates to the Settlement, Severance, Early Retirement and Redundancy section. The main section and Annex's A, B C have all been updated along with updated documents and a Finance Guidance Note to explain the changes
Updated the Certificates of Assurance chapter, Annex 2 with the CoA checklist questions for 2023/24 and added a Finance Guidance note outling the changes.
Updates made to proportionate due diligence wording, Accountable Officer tests guidance, risk exposure guidance, public bodies duties, monitoring and management, exit arrangements.
Procurement chapter updated.
Updated 'Major investment projects' paragraph 12 and the SRO appointment letter.
