Larger Public Spending for People in Scotland

The Scottish Government’s Government Expenditure and Revenue (GERS) figures for 2024-25 present that folks in Scotland profit by £2,669 extra per head of further spending in comparison with the UK common, because of the redistribution of wealth all through the UK, and the influence of our Plan for Change. This is a rise of £358 on the earlier yr [£2,311 in 2023-24].

In 2024-25, £91.4 billion in tax receipts was raised in Scotland by means of devolved and reserved taxation, in comparison with £117.6 billion in public spending for Scotland. That works out to eight.0 per cent of UK income and 9.1 per cent of spending.

The figures additionally reveal that the ‘notional deficit’, or web fiscal stability, in Scotland grew to round £26.5 billion, or 11.7 per cent of GDP, greater than double the UK deficit of 5.1 per cent of GDP. This is a rise of £5.1 billion on the earlier yr [£21.4 billion in 2023-24]. 

The UK Government is dedicated to retaining the Barnett Formula and funding preparations agreed with the Scottish Government by means of the Fiscal Framework, which allows this greater spending for Scotland. We are additionally dedicated to working in partnership with the Scottish Government to drive financial development in Scotland as a part of our Plan for Change.

Despite this, the Scottish Government not too long ago confirmed that its coverage is to finish the present software of the Barnett components in Scotland, a transfer that might imply a funding hole of greater than £14 billion that the Scottish Government wanted to handle.

Scottish Secretary Ian Murray mentioned:

These figures underline the collective financial power of the United Kingdom and the way Scotland advantages from the redistribution of wealth contained in the UK. By sharing assets with one another throughout the UK, Scots profit by £2,669 extra per head in public spending than the UK common. It additionally implies that Devolved Governments have the monetary heft of the broader UK behind them when taking choices. 

That means more cash for faculties, hospitals and policing, if the Scottish Parliament chooses to put money into these areas. People in Scotland will rightly anticipate to see higher outcomes.

These figures additionally underline that the Scottish Government’s coverage of full fiscal autonomy would imply turbo-charged austerity and financial chaos for Scotland. That’s why the UK Government will arise for the pooling and sharing assets throughout the UK as a part of our Plan for Change – to develop the financial system and put more cash in working folks’s pockets.

A latest Westminster Scottish Affairs Committee inquiry examined the effectiveness of the Barnett Formula – the mechanism which determines the extent of funding the UK Government sends to Scotland yearly. The MPs discovered the measure was “fit for purpose”. The committee additionally rejected requires the components to shift and supply funding to Scotland based mostly on want. The report mentioned Scotland already receives extra funding per head than every other nation within the UK, and a change within the framework might see funding reduce.

At the Spending Review the Chancellor set out a document settlement for the Scottish Government. It will obtain an additional £9.1 billion over the course of the Spending Review interval, which means that the Block Grant is forecast to extend in actual phrases for yearly of the Spending Review and will probably be value £52 billion by 2028/29, the very best since devolution. 

The UK Government can be investing immediately in Scotland – together with £1.7 billion in native development tasks. £750 million for Edinburgh’s supercomputer, £250 million to improve Faslane, and £200 million within the Acorn undertaking. And in fact the billions the UK Government is spending on defence disproportionately profit Scottish jobs and trade. 

The GERS figures are printed here