Scottish Economic Statistics 2003
chapter six: Public Sector
Public Sector Receipts
The amount of money raised from taxes and other sources in Scotland is estimated in the annual Government Expenditure and Revenue in Scotland (GERS) exercise. Most UK taxes are collected centrally, and so information on the source region is unavailable. There are several difficulties that arise in allocating a share to Scotland, and these are outlined in the GERS publication. It is estimated, however, that Scotland contributed 30.9 billion in the financial year 2000/01, which amounted to 8.2 per cent of the total UK revenue (excluding North Sea).
Chart 6.1 illustrates the proportions of the estimated total revenue originating from various sources. It can be seen from table 6.1 that compared with the UK as a whole, Scotland pays more local taxes relative to its population, but contributes less to income tax revenue. The Scottish Local Authorities collected a total of 2.86 billion in Council Tax and non-domestic rates in 2000-01.
Chart 6.1: Estimated government revenue from Scotland by source 2000/01
Government Expenditure
The GERS analysis also provides estimates of Government expenditure in Scotland. Some expenditure can be directly attributed to Scotland, and is termed as identifiable. Information on this is published in Public Expenditure Statistical Analyses by HM Treasury. Chart 6.2 shows the distribution of identifiable expenditure among various services in Scotland.
Chart 6.2: Identified total managed expenditure in Scotland by programme 2000/01
Other expenditure is made at the UK level, and cannot be assigned to a particular geographical region. Defence is the main example of this 'non-identifiable' expenditure. Allocation of Scotland's share of non-identifiable expenditure can be done in different ways. For most items Scotland's proportion of UK GDP is used, although for some, including defence which is the largest item, Scotland's share of the UK population is taken (based on a 'who benefits' principle). Table 5.3 gives the estimates of identifiable and non-identifiable expenditure on different services.
Total managed expenditure in Scotland in 2000/01 amounted to an estimated 31.8 billion, which was 10 per cent of the UK total. The largest category of spending was Social Security, which accounted for 9.9 billion or over 9 per cent of total UK Social Security spending (the Scottish share of the UK population in 2000 was 8.6 percent). More information on Social Security recipients is presented in chapter 5. The second largest category of expenditure was health and personal social services, which accounted for 6.9 billion.
Public Spending on Roads and Transport in Scotland
The total expenditure in Scotland on roads and transport in 2000/01 was 947 m, according to the HM Treasury analysis shown in table 6.3. Detailed information on expenditure that is the responsibility of the Scottish Parliament and of the Scottish Local Authorities is published in Scottish Transport Statistics and summarised in table 6.6 . Chart 6.3 illustrates recent trends in each of these.
Central Government expenditure on roads and transport that is within the Scottish Executive's responsibility came to 378m in 2000-01. Two thirds of this was spent on roads - 166 m on the building and maintenance of motorways and trunk roads and a net 83 m invested in local road projects. The remainder was spent on public transport capital investment and subsidies to transport industries. The majority of Local Government transport expenditure was on road maintenance (except motorways and trunk roads), with the remainder on subsidising public transport, road lighting, traffic and parking management and school crossing patrols.
Other transport costs incurred by the UK Government in Scotland (about 14 percent of the total spent on roads and transport in Scotland) include the Driving Standards Agency and DVLA.
Chart 6.3: Expenditure on transport in Scotland, 1993/94 to 2000/01
Public Sector Employment
Table 6.7 gives an estimate of total public sector employment in Scotland as 531,300. The National Accounts definition of 'Public Sector', as used in the expenditure figures above, is slightly narrower than this. For example, universities belong to the 'Non Profit Institutions Serving Households' sector. An estimate of total public sector employment on a National Accounts basis is therefore around 480,000. The information in the table has been drawn from several sources, and includes full-time equivalent figures where they were available (see footnotes to table). The total number of employees in the public sector will therefore be higher. This suggests that just over 20 percent of the Scottish work-force is in the public sector.
Table 6.1: General Government Revenues, 2000/01
| UK billion | Scottish estimate, billion | Estimated % share of UK |
Income tax (after tax credits) | 104.7 | 7.3 | 6.9 |
VAT | 58.5 | 4.8 | 8.3 |
Social Security contributions | 60.6 | 5.1 | 8.3 |
Local Authority revenues | 30.8 | 2.9 | 9.3 |
Corporation Tax (excluding North Sea) | 30.2 | 2.6 | 8.7 |
All Other revenues 1 | 93.9 | 8.3 | 8.8 |
Total Receipts2 | 378.7 | 30.9 | 8.2 |
Source: GERS, Scottish Executive (Not National Statistics)
1. The figures for the individual items in the table are on a cash basis; an accruals adjustment is included in all other revenues. Includes estimates of all taxes and duties not specified above, plus accounting adjustments and other receipts.
2. Excluding North Sea revenues.Table 6.2: Summary of Local Authorities' Revenue and Capital Income and Expenditure by category 1, 2000/01
million
Gross Expenditure | Income | Net Expenditure |
Total Gross Expenditure | 12,753 | Total Income | 13,031 | -278 |
Revenue Expenditure | 11,951 | Revenue Income | 12,788 | -837 |
Employee Costs | 4,499 | Non-domestic rates 5 | 1,663 | |
Operating expenses 2 | 5,655 | Council Tax | 1,273 |
Revenue contributions to capital | 219 | Government Grants | |
General fund contributions to housing and trading services 3 | 40 | Revenue Support Grant (RSG) 6 | 3,441 |
Support service costs | 417 | Council Tax rebate grants 7 | 279 |
Other | 356 | Other grants and subsidies 8 | 1,892 |
Adjustment for inter account and inter authority transfers 4 | -337 | Sales | 50 |
Loan Charges | 1,101 | Fees and charges including rents | 1,781 |
Other income | 2,278 |
Contributions from General Fund | 137 |
Increase on revenue balances | -6 |
Capital Expenditure9 | 803 | Capital Income | 243 | 559 |
Acquisition of land leases, existing buildings or works | 13 | Sale of fixed assets 10 | 150 | |
New construction and the purchase and sale of vehicles, plant machinery and equipment | 728 | Repayment of loans by private sector | 19 |
Capital grants to private sector | 48 | Private sector contributions | 26 |
Gross lending to private sector | 13 | Public sector contributions | 48 |
Capital grants to public corporations | - | | |
1. Excludes water and sewerage. Revenue figures are on an accruals basis; capital on a cash basis.
2. Including transfer payments.
3. Excluding contributions to transport undertakings. Including reserve fund contributions in respect of trading services.
4. All inter account and inter authority transfers are deducted from expenditure.
5. This is the Distributable Amount as per the Local Government Finance (Scotland) Order 2000
6. Re-determined as per Local Government Finance (Scotland) Order 2001.
7. Council tax rebate paid by DWP.
8. As defined in Appendix B of the Report to the Local Government Finance (Scotland) Order 2000 and as returned by local authorities.
9. Excludes capital expenditure which is financed from revenue.
10. HRA sales of assets income is not consistent with previous years due to changes in how HRA set aside receipts are recorded. The figure shows only the proportion of asset sales available to finance new borrowing.