This item was published during the term of a previous administration that ended in April 2007
Listen
Government Expenditure and Revenue in Scotland 2004-05
11/12/2006
Estimates of the amount of public money spent in Scotland compared to the amount raised, are published in Government Expenditure and Revenue in Scotland 2004-05 (GERS) today.
GERS is an annual publication which uses aggregate expenditure and revenue data to estimate the net borrowing attributable to Scotland.
The report aims to improve public understanding of fiscal issues in Scotland. Expenditures are only included if they are incurred for the benefit of the residents of Scotland. On the revenue side, only tax receipts relating to Scotland's residents and businesses are recorded.
The report concentrates on the 2004-05 data but also provides estimates of Scotland's fiscal position over previous years.
The key findings are:
Expenditure
- In 2004-05, the total expenditure for Scotland is estimated at £47.7 billion or 9.7 per cent of the UK total. This includes devolved and reserved spending in Scotland.
- 'Identifiable' government expenditure in Scotland (spending specifically incurred on behalf of the residents of Scotland) was £38.6 billion, or 9.8 per cent of the corresponding UK total.
- 'Non-identifiable' expenditure (Scotland's share of expenditure that is generally incurred on behalf of the UK people as whole, e.g. defence) was estimated at £6.2 billion or 8.2 per cent of the UK amount
- Accounting adjustments were £2.9 billion, or 12.7 per cent of the UK total
- Expenditure per capita amounted to £7,597 in 2004-05 which is £1,034 (15.8 per cent) higher per head than the UK average
Revenue
In 2004-05, total receipts in Scotland are estimated at £36.4 billion, equivalent to 8.1 per cent of total UK receipts (the main contributions coming from Income tax, Corporation tax, VAT, Social Security contributions, Local Authority revenues). This excludes North Sea oil revenues.
Net Borrowing (NB)
The Net Borrowing attributable to Scotland is the estimate of the extent to which expenditure for Scotland exceeds receipts. In 2004-05 it is calculated at £11.2 billion, equivalent to 12.0 per cent of Scottish GDP. This compares to an equivalent UK ratio of 3.8 per cent. These estimates also exclude North Sea oil revenues.
North Sea Revenues
North Sea Oil and Gas revenues are not included in the main GERS results but are included in sensitivity analysis showing the effects of allocating different shares of North Sea revenue/output to Scotland.
In the event of all North Sea revenue being attributed to Scotland, the 2004-05 Net Borrowing would be £6 billion, or 4.8 per cent of the Scottish GDP (including North Sea output).
Background:
The expenditure estimates in GERS are based on HM Treasury's Public Expenditure Statistical Analyses (PESA) publication.
For public receipts, GERS relies on numerous sources. Many taxes are collected centrally and their distribution by region is often unavailable. Consequently, GERS uses appropriate survey data to estimate Scotland's share of the various revenue sources. For details on the methodology see Appendix B of the publication.
Net borrowing is the difference between expenditure and receipts, defined to exclude North Sea oil revenues. The Net Borrowing figure is an estimate for Scotland, based on expenditure and receipts calculations that by necessity include some estimation. Therefore, the Net Borrowing estimate should be used with some caution.