SPENDING REVIEWS
Contents:
Scope
Key Points
Background
Scope
1. This section provides guidance on the biennial spending review process in which Scottish Ministers undertake a detailed examination of portfolio budgets and set spending plans and targets for the forward three year period.
Key Points
2. The spending review process in Scotland is normally undertaken every two years, scheduled around the timeframe of UK spending reviews. The precise arrangements for the spending review process vary from one review to the next.
3. The spending review process is managed by Scottish Government officials who scrutinise and challenge expenditure proposals and provide advice to portfolios and Ministers.
4. At the end of the spending review process, each portfolio is set an agreed three year budget, with the strong expectation that this will not be reopened until the next spending review.
Background
5. Spending plans are normally set during biennial spending reviews, with the last year of one spending review becoming the first year of the next. Thus Spending Review 2004 set revised plans for 2005-06 and new plans for 2006-07 and 2007-08. The spending review scheduled to take place in 2006 was delayed until 2007 when new plans were set for 2008-09, 2009-10 and 2010-11. There is no firm date for the next spending review - originally anticipated for 2009 - and it is now unlikely to take place prior to the next UK general election in 2010.
6. The overall size of the Scottish Budget (or Block) is set in the UK spending review and is largely derived by applying the population-based Barnett formula to changes in planned spending on comparable services by UK government departments. Further details are contained in the Statement of Funding Policy. After deduction has been made for the costs of the Scotland Office, the Scottish Parliament Corporate Body and Audit Scotland the Scottish Spending Review allocates the Block between the Scottish Government's portfolios.
7. At the end of the spending review process, each portfolio is set an agreed three year budget, with the strong expectation that this will not be reopened until the next spending review. The portfolio is expected to manage within this budget, absorbing additional pressures and funding new initiatives from within its agreed spending review settlement.
8. The outcome of the spending review is announced around September and forms part of Phase 2 of the budgeting process. The spending review publication gives details of Level 2 budgets, with the following Draft Budget breaking these down further to Level 3.
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Page Published / Updated: May 2009