- Government Expenditure and Revenue Scotland ( GERS) is a National Statistics publication. It is assessed by the independent UK Statistics Authority to ensure that it meets the Code of Practice for Official Statistics.
- The report estimates the contribution of revenue raised in Scotland towards the goods and services provided for the benefit of Scottish residents under the current constitutional arrangements. The estimates are consistent with the UK Public Sector Finances published in July 2016 by the Office for National Statistics ( ONS).
- Following a user consultation, the publication has been brought forward by seven months to August to provide more timely estimates of Scotland's public sector finances. This follows efforts in previous years to reduce the time lag in publishing the report, and means that GERS is now published more than 10 months earlier than it was in 2012, and 16 months earlier than it was before 2008. Accelerating the publication schedule involves changes to the expenditure methodology which are discussed in Chapter 3.
- The UK Statistics Authority has confirmed that the release of GERS at this time is consistent with the requirements of the Code of Practice to release statistical reports as soon as they are judged ready, according to a published timetable that takes account of user needs, without being influenced by non-statistical matters. This helps ensure that there is no opportunity, or perception of opportunity, for the release to be withheld or delayed.
- The ONS reclassified English Housing Associations ( HAs)  into the public sector on 30 October 2015. In 2015-16, this increased UK public sector revenue by £6.9 billion and UK expenditure by £10.8 billion, resulting in a £3.9 billion increase in the UK net fiscal deficit. A similar impact is seen in earlier years. Scotland is apportioned none of this additional revenue or expenditure in GERS. The ONS have not yet announced a decision on the classification of Scottish Housing Associations. Further information on the impact of the change on the UK figures is available in Chapters 1 and 3.
- In order to answer some of the most common queries the Scottish Government receives about GERS, a "Frequently Asked Questions" box has been added to the document, Box S.1.
- Feedback from users of the publication is welcome. A correspondence address is available in the back leaf of the publication. Comments can be emailed to email@example.com.
Scotland's revenue and expenditure
- Table S.1 shows two of the estimates of Scotland's public sector revenue presented in GERS: (i) excluding North Sea revenue, and (ii) including an illustrative geographical share of North Sea revenue. Estimates including a population share of North Sea revenue are available in the main chapters.
- Scotland's estimated non-North Sea revenue in 2015-16 was £53.7 billion. As a percentage of GDP, non-North Sea revenues increased to 36.5% in 2015-16, the highest level since 2007-08, before the financial crisis.
- Non-North Sea revenue in Scotland grew by 3.7% in 2015-16, similar to that for the UK as a whole, 3.8%.
- Including an illustrative geographical share of the North Sea, total Scottish revenue increased 0.3% between 2014-15 and 2015-16. This is lower than the growth in non‑North Sea revenue, reflecting the decline in UK North Sea revenue, which fell from £2.3 billion in 2014‑15 to £76 million in 2015-16.
- The increase in Scottish revenue as a percentage of GDP is smaller when including the North Sea, as Scottish North Sea GDP declined by 24% in 2015-16. The fall in North Sea revenue and GDP occurred because relatively high operating costs and falling prices have reduced North Sea profits and therefore GDP.
|Table S.1: Total Revenue: 2011-12 to 2015-16|
|Scotland - Excluding North Sea revenue||47,328||48,192||50,054||51,765||53,689|
|Scotland - Including North Sea revenue (geographical share)||56,961||53,498||54,053||53,567||53,748|
|As % of UK total revenue|
|Scotland - Excluding North Sea revenue||8.0%||8.0%||8.0%||7.9%||7.9%|
|Scotland - Including North Sea revenue (geographical share)||9.5%||8.8%||8.6%||8.2%||7.9%|
|As % of GDP|
|Scotland - Excluding North Sea revenue||36.4%||36.1%||35.7%||35.8%||36.5%|
|Scotland - Including North Sea revenue (geographical share)||37.2%||35.1%||34.1%||34.0%||34.3%|
|UK - including all North Sea revenue||36.7%||36.0%||35.9%||35.7%||36.1%|
Note: Scotland as a % of UK is lower than previously published for all years shown here by around 0.1 - 0.2 percentage points due to the inclusion of English HAs in the UK figure, which increases UK revenue.
- Table S.2 below shows estimates of revenue per person for Scotland and the UK. Excluding North Sea revenue, revenue per person in Scotland is lower than in the UK by approximately £400 per year.
- Including an illustrative geographical share of North Sea revenue, the difference between revenue per person in Scotland and the UK is quite variable. In the latest year, including an illustrative geographical share of North Sea revenue, revenue per person was £400 lower than the UK average. Note that UK revenue in all years has been increased by approximately £100 per person compared to estimates in previous editions of GERS, due to the reclassification of English housing associations.
|Table S.2: Revenue per person: Scotland and UK 2011-12 to 2015-16|
|£ per person|
|Excluding North Sea revenue||8,900||9,100||9,400||9,700||10,000|
|Including North Sea revenue (geographical share)||10,700||10,100||10,100||10,000||10,000|
|Excluding North Sea revenue||9,300||9,400||9,800||10,100||10,400|
|Including North Sea revenue||9,500||9,500||9,800||10,100||10,400|
|Difference (Scotland minus UK)|
|Excluding North Sea revenue||-400||-400||-400||-400||-400|
|Including North Sea revenue (geographical share)||1300||500||300||-100||-400|
|Note: Figures rounded to nearest £100|
- Table S.3 below shows estimates of total managed expenditure for Scotland and the UK, the principle measure of overall public spending in the UK public sector finances. Scotland's share of UK expenditure is relatively stable over the period, at around 9.1%. This is slightly lower than previously estimated in GERS as UK spending has been revised up due to the inclusion of English housing associations.
- Expenditure as a share of GDP including an illustrative geographical share of the North Sea increased in 2015-16. This reflects the decline in North Sea GDP discussed above.
|Table S.3: Public Sector Total Managed Expenditure: 2011-12 to 2015-16|
|Scotland - £ millions||65,758||67,495||67,035||67,879||68,581|
|Share of UK (%) 1||9.2%||9.2%||9.1%||9.1%||9.1%|
|As % of GDP|
|Scotland - excluding North Sea||50.6%||50.5%||47.9%||46.9%||46.6%|
|Scotland - including geographic share of North Sea||42.9%||44.3%||42.3%||43.1%||43.7%|
|UK - including all North Sea||43.8%||43.2%||41.8%||40.7%||40.1%|
Note: Scottish public expenditure in 2012-13 is higher by £788 million due to the transfer of the Royal Mail Pension Plan into the public sector. This is a population share of a £9.5 billion increase in UK expenditure.
- Table S.4 below shows estimated expenditure per person for Scotland and the UK. Expenditure for Scotland has been consistently higher per person than the UK average over the period. Note that UK expenditure in all years has been increased by approximately £100 per person, compared to estimates in previous editions of GERS, due to the inclusion of English housing associations.
|Table S.4: Total Managed Expenditure per person: Scotland and UK 2011-12 to 2015‑16|
|£ per person|
|Difference (Scotland minus UK)||1,100||1,200||1,100||1,100||1,200|
Note: Figures rounded to nearest £100
Scotland's Overall Fiscal Position
- GERS provides two measures of Scotland's fiscal position, the current budget balance and the net fiscal balance.
- The current budget balance shows the difference between revenue and current expenditure. It measures the degree to which taxpayers meet the cost of paying for day‑to-day public services, excluding capital investment. It is shown in Table S.5 below.
- Excluding North Sea revenue, the current budget balance for Scotland tends to move in line with the figure for the UK, although the deficit in Scotland is typically six to seven percentage points larger. In 2015-16, the Scottish non-North Sea current budget balance improved by 0.6 percentage points, whilst the UK improved by 0.9 percentage points. When including the North Sea, the movement in Scotland's current budget balance is more variable, and does not follow the same pattern as the UK. Between 2014-15 and 2015-16, Scotland's current budget balance including the North Sea revenue worsened by 0.7 percentage points, reflecting the decline in North Sea revenue and GDP in this year.
|Table S.5: Current Budget Balance: Scotland and UK 2011-12 to 2015-16|
|Scotland - Excluding North Sea||-15,186||-15,008||-14,015||-13,333||-12,688|
|Scotland - Including North Sea (geographical share)||-5,553||-9,703||-10,015||-11,531||-12,628|
|As % of GDP|
|Scotland - Excluding North Sea||-11.7%||-11.2%||-10.0%||-9.2%||-8.6%|
|Scotland - Including North Sea (geographical share)||-3.6%||-6.4%||-6.3%||-7.3%||-8.1%|
- The net fiscal balance measures the difference between total public sector expenditure and public sector revenue. It therefore includes public sector capital investment, such as the construction of roads, hospitals, and schools, which yields benefits not just to current taxpayers but also to future taxpayers. It is shown in Table S.6 below.
|Table S.6: Net Fiscal Balance: Scotland and UK 2011-12 to 2015-16|
|Scotland - Excluding North Sea||-18,430||-19,303||-16,981||-16,114||-14,892|
|Scotland - Including North Sea (geographical share)||-8,797||-13,997||-12,982||-14,311||-14,833|
|As % of GDP|
|Scotland - Excluding North Sea||-14.2%||-14.5%||-12.1%||-11.1%||-10.1%|
|Scotland - Including North Sea (geographical share)||-5.7%||-9.2%||-8.2%||-9.1%||-9.5%|
- The net fiscal balance tends to move in the same way as the current budget balance, but is approximately 2 percentage points larger when expressed as a share of GDP. This reflects the fact that capital spending is relatively stable as a share of total spending over time.
- The charts overleaf show the estimates of the current budget balance and net fiscal balance for Scotland and the UK since 1998-99. Consistent with other economic statistics, all tables in the accompanying spreadsheets contain figures back to 1998-99.
Box S.1: GERS Frequently Asked Questions
The Scottish Government receives many questions from users about GERS. Below is a summary of some of the most frequently asked questions and their answers.
Q: Is GERS a description of the whole Scottish economy?
A : No. GERS reports only on public sector revenue and expenditure. Although these may be affected by economic performance, GERS does not directly report on Scotland's wider economy. If users are interested in the measurement of the economy as a whole, they should examine other economic statistics products, such as the quarterly Gross Domestic product figures ( www.gov.scot/gdp) or Quarterly National Accounts Scotland ( QNAS, www.gov.scot/snap). These publications provide real terms growth in the economy, and GDP in cash or nominal terms and its components.
Q: Who produces GERS?
A: GERS is produced by Scottish Government statisticians. It is designated as a National Statistics product, which means that it is produced independently of Scottish Ministers and has been assessed by the UK Statistics Authority as being produced in line with the Code of Practice for Official Statistics. This means the statistics have been found to meet user needs, to be methodologically sound, explained well and produced free of political interference.
Q: How do you decide on changes that are made to GERS?
A: In line with the Code of Practice for Official Statistics, changes are only made to GERS after consultation and discussion with users. This includes discussion at the annual Scottish Economic Statistics Consultation Group,  which brings together users of economic statistics from industry, academia and the wider public sector. An annual consultation exercise, open to all, is also carried out every year to allow all users of GERS to comment on planned and suggested changes to GERS.
Q: Do you use company headquarters to assign corporation tax or taxes like VAT?
A: Corporation tax on trading profits is estimated on a company-by-company basis, depending on the economic activity each company has in Scotland, not location of company headquarters. VAT is a consumption tax, and is therefore estimated based on purchases that are made in Scotland, rather than the location of a company's head office.
Q: How do taxes from the whisky industry feature in the GERS estimates?
A: Like any industry, the whisky industry's activity in Scotland generates tax revenue through a range of sources, such as corporation tax on profits, income tax and national insurance contributions on staff earnings, and non-domestic rates payments on business premises. These are all captured in the estimates of Scottish public sector receipts reported in GERS.
In addition, whisky consumed in the UK is subject to VAT and alcohol duty. This is assigned to Scotland on the basis of how much is consumed in Scotland. Whisky which is exported does not generate UK VAT or alcohol duty. There is no export duty in the UK.
Q: What are Accounting Adjustments and why do they feature in the GERS estimates?
A: Accounting adjustments are used to present revenue and expenditure on a National Accounts basis, the international reporting standards used by governments. They normally reflect non-cash items, such as depreciation or pensions liabilities. In general, these adjustments do not affect the net fiscal balance or current budget balance, as they are added to both revenue and expenditure. In 2015-16, accounting adjustments added £4.3 billion to the estimate of Scottish public sector revenue and £3.9 billion to the estimate of Scottish public sector spending. Comparable accounting adjustments are also contained in the estimates of UK public sector spending and revenue. For more information on accounting adjustments and where they appear in the revenue tables, see Table A.10.
Q: Is spending that does not occur in Scotland included in the estimates of Scottish public spending?
A: GERS aims to capture all spending that benefits the residents of Scotland. This means it assigns Scotland a share of some expenditure which takes place outside Scotland. It also means that it does not assign to Scotland expenditure which occurs in Scotland but benefits non-Scottish residents.
For example, expenditure on embassies occurs outside Scotland, but provides benefits to Scottish residents and companies, such as Scottish tourists requiring consular services. As such, Scotland is allocated a population share of this expenditure in GERS. Likewise, spending on museums in Scotland benefits visitors from the rest of the UK, so not all of this spending is assigned to Scotland in GERS
Q: Why does GERS refer to public sector revenues rather than taxes?
A: Public sector revenue covers all income received by the public sector. Although this is mostly taxes, there are some forms of revenue which are not taxes. These include income made by public corporations, such as Scottish Water, or dividend income from companies in which the government holds shares.
This report is the twenty-third in the series of official published estimates of expenditure and revenue balances of the public sector in Scotland.
GERS is classified as National Statistics and produced in accordance with the principles of the Code of Practice for Official Statistics. More information about National Statistics, including the latest assessment report on GERS (number 274), is available on the UK Statistics Authority website. 
The GERS content and methodology is continually reviewed in conjunction with users. The latest consultation about this edition of GERS was carried out between May and July 2016. An initial response was published in July 2016, and a more detailed response has been published alongside this publication. 
Feedback from users of the publication is welcome. A
correspondence address is available in the back leaf of the
publication. Comments can be emailed to:
What Questions Does GERS Address?
GERS addresses three questions about Scotland's public sector accounts for a given year:
- What revenues were raised in Scotland?
- How much did the country pay for the public services that were consumed?
- To what extent did the revenues raised cover the costs of these public services?
Public sector revenue is estimated where a financial burden is imposed on residents and enterprises in Scotland.
Under current UK budgetary accounting procedures, separate figures for each country and region of the UK are not available for most revenues. As a result, Scottish public sector revenue is estimated by considering each revenue stream separately. Where Scottish data are unavailable, GERS estimates revenue using a set of apportionment methodologies, refined over a number of years following consultation with and feedback from users.
The methodology note on the GERS website provides a detailed discussion of the methodologies and datasets used. 
Public sector expenditure is estimated on the basis of spending incurred for the benefit of residents of Scotland. That is, a particular public sector expenditure is apportioned to a region if the benefit of the expenditure is thought to accrue to residents of that region.
This is a different measure from total public expenditure in Scotland. For most expenditure, spending for or in Scotland will be similar. For example, the vast majority of health expenditure by NHS Scotland occurs in Scotland and is for patients resident in Scotland. Therefore, the in and for approaches should yield virtually identical assessments of expenditure. However, for expenditure where the final impact is more widespread, such as defence, an assessment of 'who benefits' depends upon the nature of the benefit being assessed. Where there are differences between the for and in approaches, GERS estimates Scottish expenditure using a set of apportionment methodologies, refined over a number of years following consultation with and feedback from users.
The for approach considers the location of the recipients of services or transfers that government expenditure finances, irrespective of where the expenditure takes place. For example, with respect to defence expenditure, as the service provided is a national 'public good', the for methodology operates on the premise that the entire UK population benefits from the provision of a national defence service. Accordingly, under the for methodology, national defence expenditure is apportioned across the UK on a population basis.
The methodology note on the GERS website provides a detailed discussion of the methodologies and datasets used to undertake this task. 
The Data Sources
The source of the revenue data in GERS is ONS's Public Sector Finances, which provides disaggregated figures relating to UK public sector revenue. 
The primary data sources used to estimate Scottish public sector expenditure in GERS are HM Treasury's Public Expenditure Statistical Analyses  and the supporting Country and Regional Analysis ( CRA). 
GERS also makes use of the estimates of Scottish Gross Domestic Product ( GDP) in current market prices published in the Quarterly National Accounts Scotland ( QNAS). 
Additional Information on the GERS Website
The GERS website contains a number of additional analyses of Scotland's public sector finances. In addition to containing copies of the GERS report from 1990-91 onwards, the website also contains the tables underpinning this edition of GERS in Excel form and statistics providing a consistent time series of Scotland's public sector finances from 1998-99 to 2015-16.
The Scottish Government, other devolved administrations, and HMRC are committed to working together to reconcile, and where possible, align methodologies for estimating receipts for the countries and regions of the UK. Further details on this work can be seen in Box 1.1 in Chapter 1.
The GERS website can be accessed via http://www.gov.scot/gers.
Comparisons to other countries and regions of the UK
In the last two editions of GERS, experimental statistics of comparisons to other parts of the UK have been included for both revenue and expenditure. These are not included in this edition of GERS as, due to the earlier publication timetable, data are not available to produce figures for 2015-16 for each country and region of the UK. Comparative estimates for 2014-15 are available in last year's GERS. The ONS ran a consultation on producing public sector finances estimates for the UK country and regions earlier in the year. The report of this consultation has been published,  and as a result, ONS intend to produce initial estimates during the course of 2017.
The Scotland figures in the main tables in GERS are produced to be comparable to the UK figures presented in the ONS Public Sector Finances and the OBR Economic and Fiscal Outlook. These report for the public sector as a whole on a financial year basis. In contrast, international organizations such as the European Commission and the International Monetary Fund ( IMF) report countries' finances on a calendar year basis and for the government sector only. Figures for Scotland on this basis are available in Table A.4.
Email: Mairi Spowage, firstname.lastname@example.org