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Government Expenditure and Revenue in Scotland 2001-2002
Section 9: Medium-term Developments
1997-98 to 2001-02 Estimates
Each edition of the PESA publication provides a consistent five-year run of identifiable public expenditure figures for each of the four countries of the UK. These figures are directly comparable 12 and can be used to generate estimates of total expenditure by country, including Scotland. When combined with estimates of total revenue, the calculation of the Scottish fiscal position for earlier years can be updated from those published in previous editions of GERS.
UK and Scottish Identifiable Expenditure on Services
Table 9.1 shows that identifiable expenditure on services in Scotland has been rising steadily since 1997-98 and reached 31.6 billion in 2001-02.
Scotland's share of identifiable UK expenditure, however, has remained stable at 10.3 per cent over the five-year period (Table 9.2). Across all countries, there have been small changes in the relative distribution of spending.
Tables 9.3 and 9.4 show that identifiable expenditure per head in 2001-02 remained significantly above the UK average in Northern Ireland, Scotland and Wales. In that fiscal year, identifiable expenditure per head was 6,246 in Scotland, and around 20 per cent higher than the UK average.
Tables 9.5 and 9.6 provide a detailed breakdown of expenditure and revenue (excluding North Sea revenues) for Scotland over the period from 1997-98 to 2001-02.
Table 9.7 outlines the latest series of estimates of net borrowing (excluding oil revenues) for Scotland over the five-year period. It shows that, in recent years, the Scottish deficit (excluding oil revenues) has tended to mirror the changes that have taken place in the UK fiscal stance, albeit with the balance being a higher proportion of GDP.
In the period examined in this report, Scottish net borrowing has risen from 1999-2000 to 2001-02; the most recent ratios stood at 10.3 per cent and 0.6 per cent for Scotland and the UK, respectively. The Scottish ratio has maintained a positive differential in the order of 7.1 to 9.7 percentage points over the five-year period.
Revisions to the 2000-01 Estimate
Table 9.8 shows revisions made to the estimate of key fiscal aggregates for Scotland for 2000-01. The estimates were first published in GERS 2000-01.
The Net Borrowing estimate (excluding oil revenues, and based on unrounded figures) for 2000-01 has been revised upwards by around 0.9 billion to 6.3 billion (from 7.1 per cent to 8.3 per cent of GDP).
The changes on the expenditure side are mainly a reflection of revisions to data
sources. In PESA 2003 identifiable expenditure for the UK was revised downwards by 3.3 billion but the Scottish share increased by 0.3 billion. At the same time, non-identifiable for the UK was revised upwards by 6.7 billion, which accordingly led to an increase of the Scottish share by 0.6 billion. This was partly offset by the reduction in other expenditure.
The reduction in revenue by 0.3 billion is mainly attributable to a lower share in Social Security contributions and Other Revenues for Scotland.
The Longer-term Fiscal Position
The two charts on the next page show the fiscal positions of the UK and Scotland over the last two decades. 13 Since the early nineties we can observe a slight downward trend in public expenditure and net borrowing in both territories, which reverses from 2000-01 onwards.
Although the Scottish pre-1997-98 data are not directly comparable with the data presented in this edition of GERS, they provide a valuable context, especially alongside the broadly comparable UK data.
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