House of Commons Library

Scotland: Public spending and revenue

Published Thursday, March 10, 2016

Public spending and taxation in Scotland was a hotly debated issue in the run up to the Scottish independence referendum, and has remained so since. A range of statistics exist on the subject: this note summarises what these say and how they are measured.

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Scotland's share of UK public spending, tax revenue and population, 2014/15

  • Statistics on public spending and revenue can be presented in a number of different ways which give contrasting pictures of Scotland’s position relative to the UK as a whole.

  • The allocation of North Sea oil and gas revenues between Scotland and the rest of the UK makes a difference to estimates of government revenue raised in Scotland.

  • Scotland’s public spending per head is higher than the UK average. It is higher than all the English regions and Wales, but lower than Northern Ireland.

  • Scotland accounted for 9.3% of UK public spending in 2014/15. This compares with 8.2% of revenue if a geographical share (around 80%) of receipts from the North Sea are allocated to Scotland or 8.0% of revenue if they are allocated in line with Scotland’s share of the UK population.

  • Public spending in Scotland is higher than the UK as a share of GDP whether North Sea GDP is allocated by geographical or population share.

  • North Sea revenues are volatile. If allocated on a geographical basis, Scotland’s North Sea revenues have fluctuated between £9.6 billion and £1.8 billion over the last 5 years; between 3% and 17% of total Scottish revenue over this period.

  • Forecasts of revenues from the North Sea are highly uncertain, as they depend on a wide range of factors, and are subject to revision.

  • Estimates of total Scottish revenue in 2014/15 range from £51.6 billion if no North Sea revenue is allocated to Scotland, £51.8 billion if a population-based share is allocated to Scotland and £53.4 billion if a geographic share is allocated.

  • On a per head basis, revenue raised in Scotland is slightly below the UK average if Scotland receives no North Sea revenue, or a share in line with its population. If the majority of North Sea revenue is allocated to Scotland, its revenues per head are similar to the UK average at £10,000.

Many of the statistics in this note are taken from the Scottish Government’s publication Government Expenditure and Revenue Scotland 2014-2015 (March 2016).

 

Commons Briefing papers SN06625

Author: Matthew Keep

Topics: Devolution, Economic policy, Public expenditure, Scottish Parliament, Taxation

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