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.Jump to full report >>
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