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Scotland: Public spending and revenue

Published Thursday, August 25, 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, revenue and population, 2015/16

  • 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.
  • Total public spending in Scotland was £68.6 billion in 2015/16, equivalent to £12,800 per head.
  • On a per head basis, revenue raised in Scotland is slightly below the UK average.
  • An estimated £53.7 billion of revenues were raised in Scotland in 2015/16, equivalent to £10,000 per head.
  • Scotland accounted for 9.1% of UK public spending and 7.9% of UK revenues in 2015/16.
  • Scotland’s net fiscal deficit – the difference between revenues and public spending – in 2015/16 ranges from 10.1% of GDP if North Sea revenues are excluded, to 9.5% of GDP if a geographic share of North Sea revenues are allocated to Scotland. This compares with a UK fiscal deficit of 4.0% of GDP.
  • Falls in the oil price combined with high levels of investment and rising decommissioning costs have resulted in North Sea revenues falling to the lowest levels since records began in 1968/69.
  • In previous years the allocation of North Sea oil and gas revenues between Scotland and the rest of the UK made a difference to estimates of government revenue raised in Scotland. However, in 2015/16, as the revenues are low, their allocation makes little difference.
  • North Sea revenues are volatile. If allocated on a geographical basis, Scotland’s North Sea revenues have fluctuated between £9.6 billion and £60 million over the last 6 years; between 17% and 0.1% of total Scottish revenue over this period.

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

Commons Briefing papers SN06625

Author: Matthew Keep

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

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