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Government Expenditure and Revenue in Scotland 2001-2002
Section 1: Introduction
This report is the tenth in the series of official published estimates of government's expenditure and revenue flows in Scotland. It follows previous publications in April 1992, October 1995, October 1996, November 1997, November 1998, December 1999, December 2000, December 2001, and January 2003. 1
The report covers the 2001-02 fiscal year. This is the latest period for which the government expenditure and revenue series are available for Scotland.
Structure of Report
The structure of this report is very similar to that adopted in the previous publications, as is much of the text.
The emphasis is on providing data for 2001-02, using methodology that is in line with UK treatment.
Some of the detailed descriptive background contained in the previous reports is not repeated here; instead, the appropriate cross-references are made to earlier GERS and other publications.
Section 2
This section provides some fiscal background and discusses issues concerning definitions, and the availability and sources of data for calculating expenditure for Scotland.
The section also refers to presentation and the framework of the UK public finances.
Section 3
This section discusses and provides estimates of "identifiable" expenditure: that is, expenditure for services that immediately benefit the population of Scotland.
Section 4
Here the focus is on "non-identifiable" expenditure. This is generally expenditure that is either incurred on behalf of the UK or GB. The principal item is defence expenditure, which accounts for around 51 per cent of total non-identifiable expenditure in the UK.
Section 5
This section examines "other expenditure"; a category that includes public sector debt interest, net public service pensions, and a number of National Accounts and other adjustments required to relate expenditure as reported in the Budget to National Accounts measures of public expenditure.
Section 6
This section brings together the three components of expenditure discussed in Sections 3 to 5 and provides summary estimates for both Scotland and the UK.
Section 7
The revenue side of the public accounts is presented in this section. For public receipts, the available information relating to Scotland is less well-founded. Many taxes are collected centrally and their distribution by region is often unavailable. In addition, for some components of revenue, there are theoretical and practical difficulties in determining an appropriate share to allocate to Scotland. As a result, it is emphasised that there is no uniquely correct way to undertake the exercise. The methodology adopted in this report is described fully.
Section 8
With estimates of both expenditure for Scotland and receipts for Scotland, this section derives an estimate of Net Borrowing (NB) for Scotland in 2001-02 including a sensitivity analysis regarding the impact of oil revenues.
Section 9
This section summarises the Scottish fiscal position for the five years up to 2001-2002. The five-year series for the estimated Scottish Net Borrowing is presented at current prices, as a percentage of GDP, and as a share of the UK Net Borrowing.
Appendices
Appendices A and B present detailed accounts of the derivation of the Scottish estimates on expenditure and receipts respectively. Appendix B also provides a full list of the receipts estimates for Scotland in 2001-02.
Appendix C briefly outlines the format and national accounts basis for the UK public finances and discusses the implications for estimating Scottish flows in relation to EU transactions.
Appendix D lists abbreviations used in the text.
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