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Executive Summary
- This report provides an analysis of the public finances in Scotland, estimating expenditure, revenue and net borrowing. Special attention is given to 2004-05, the latest fiscal year for which outturns of expenditure and revenue are available for Scotland.
- In 2004-05, total expenditure for Scotland is estimated at £47.7 billion, or 9.7 per cent of the UK total. For reference, Scotland's population share in 2004 was 8.5 per cent and its share of UK Gross Value Added ( GVA, or GDP at basic prices) was 8.2 per cent.
- "Identifiable" government expenditure in Scotland (that is, 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 (defined as Scotland's share of public spending that is generally incurred on behalf of the UK) 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.
- In 2004-05, total receipts (excluding North Sea revenues) in Scotland are estimated at £36.4 billion, equivalent to 8.1 per cent of total UK receipts (excluding North Sea revenues).
- The net borrowing attributable to Scotland is the extent to which expenditure for Scotland exceeds receipts for Scotland. It was calculated at £11.2 billion in 2004-05 (excluding North Sea revenues), equivalent to around 12.0 per cent of Scottish GDP (excluding North Sea output). In the same year, the equivalent UK ratio was 3.8 per cent. Section 6 provides estimates from 2000-2001 to 2004-05.
- Calculations in Section 5 show the effect of allocating different levels of North Sea revenues to Scotland. For example, in the event of all North Sea revenue and output being attributed to Scotland, the 2004-05 net borrowing figure would be £6.0 billion, or 4.8 per cent of "Scottish" GDP (including North Sea output).
- The calculations required to derive net borrowing for Scotland involve the estimation of expenditure and revenue items. Therefore, the net borrowing estimates presented in this report are subject to some statistical uncertainty.
- Section 7 provides an overview of long-term fiscal developments in the UK and Scotland.
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