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Publication - Statistics Publication

Government Expenditure & Revenue Scotland 2015-16

Published: 24 Aug 2016
Part of:
Statistics
ISBN:
9781786523730

Government Expenditure and Revenue Scotland (GERS) for 2015-16.

67 page PDF

1.8MB

67 page PDF

1.8MB

Contents
Government Expenditure & Revenue Scotland 2015-16
Chapter 3: Public Sector Expenditure

67 page PDF

1.8MB

Chapter 3: Public Sector Expenditure

Total Public Sector Expenditure: Scotland 2015-16

Introduction

This chapter provides detailed estimates of public sector expenditure for Scotland. Expenditure is shown by type of spend, using a presentation based on the UN's Classification of the Functions of Government ( COFOG). Further information is provided in the Glossary in Annex D. Current and capital expenditure are shown separately.

The primary data sources used to estimate Scottish public sector expenditure in GERS are HM Treasury's Public Expenditure Statistical Analyses [20] and the supporting Country and Regional Analysis ( CRA). [21]

This edition of GERS sees a change in methodology to allow earlier estimates of expenditure to be produced. Whilst expenditure for years prior to 2014-15 continues to be based on the CRA, the 2015-16 estimate is primarily based on data from the Scottish Government accounts system combined with data from HM Treasury's Public Expenditure Statistical Analyses. [22] Further information on the methodological change is set out in the detailed expenditure methodology paper available at the link below.
http://www.gov.scot/Topics/Statistics/Browse/Economy/GERS/Methodology.

The presentation of EU Transactions has also changed in this edition of GERS, to align the publication with the presentation used by HM Treasury in Public Expenditure Statistical Analyses. Previously EU Transactions in GERS were included as part of the accounting adjustments line. They are now shown separately.

The EU Transactions line in the tables below shows contributions to the EU, less funding received from the EU by the public sector. Funding received primarily consists of common agricultural policy payments and European regional development funding. The one contribution to the EU which is not included in the EU Transactions line is the traditional own resource contribution. This covers EU customs duties collected by the UK and transferred to the EU. As these are EU duties, neither the revenue nor expenditure is included in the UK Public Sector Finances. However, it is normally included in estimates of the UK's total contribution to the EU budget. This is discussed in Box 3.2.

In order to present expenditure figures on a National Accounts basis, the international reporting standards used by governments, a number of accounting adjustments are included in total expenditure. These are primarily symmetric adjustments that also form part of revenue, and therefore have little impact on the net fiscal balance. Further information is set out in Annex A.

Recent Statistical Classification Decisions

On 30 October 2015, the ONS announced that private providers of registered social housing in England, which includes many housing associations, have been reclassified from the private sector to the public sector. This increases UK capital expenditure (currently included as an accounting adjustment) and UK public sector debt interest in current expenditure. None of this expenditure is apportioned to Scotland in GERS. As a result, Scotland's share of total UK public sector debt interest is lower than a population share in this edition of GERS, as Scotland is apportioned only a population share of UK public sector debt interest excluding English Housing Associations.

The ONS decision only affects bodies in England, and the UK Government has stated its intention to change legislation in this area to return them to the private sector [23] . The ONS is currently reviewing the classification of similar bodies in the devolved administrations, with a decision expected later this year. The tables in Chapter 1 show the broad impact on UK revenues as a result of this decision.

As discussed in GERS 2014-15 the ONS reclassified the Special Purpose Vehicle set up to deliver the Aberdeen Western Periphery Route into the public sector. This expenditure has not yet been incorporated into the ONS Public Sector Finances, and as such is not included in either the Scottish or UK expenditure totals in GERS. The treatment of this expenditure is discussed in the Expenditure Accounting Adjustments section in Annex A.

In December 2013, the ONS announced that Network Rail had been reclassified into the public sector. In previous editions of GERS, Network Rail expenditure had been included in the accounting adjustments line. In this edition of GERS, it is included in the accounting adjustments for years 2014-15 and earlier, but included in transport spending in 2015-16. This causes an increase in Other UK Government transport spending in 2015-16, as shown in Table 3.8, with a corresponding reduction in Other UK Government accounting adjustments.

Public Sector Expenditure

Total public sector expenditure for Scotland in 2015-16 is estimated to be £68.6 billion. This is shown by spending category in Table 3.1. This was equivalent to 9.1% of total UK public sector expenditure, shown in Table 3.2.

Table 3.1: Total Expenditure: Scotland 2015-16
Scotland
£ million % of total expenditure
General public services
Public and common services 1,395 2.0%
International services 839 1.2%
Public sector debt interest 2,802 4.1%
Defence 3,030 4.4%
Public order and safety 2,834 4.1%
Economic affairs
Enterprise and economic development 1,042 1.5%
Science and technology 499 0.7%
Employment policies 228 0.3%
Agriculture, forestry and fisheries 839 1.2%
Transport 3,226 4.7%
Environment protection 1,233 1.8%
Housing and community amenities 1,363 2.0%
Health 12,176 17.8%
Recreation, culture and religion 1,430 2.1%
Education and training 7,990 11.7%
Social protection 23,591 34.4%
EU transactions 211 0.3%
Accounting adjustments 3,854 5.6%
Total Expenditure 68,581 100%

Total public sector expenditure for Scotland is estimated to have increased to £68.6 billion in 2015-16, an increase of 1.0% compared to 2014-15. UK public expenditure grew at a similar rate, 0.9%.

Table 3.2: Total Current and Capital Expenditure: Scotland and UK
£ million
Scotland UK
2011-12 2012-13 2013-14 2014-15 2015-16 2011-12 2012-13 2013-14 2014-15 2015-16
Current 58,734 59,560 60,213 60,961 61,958 645,965 656,120 666,426 673,287 679,528
Capital 7,024 7,935 6,822 6,917 6,623 69,140 74,702 69,487 73,324 73,499
Total 65,758 67,495 67,035 67,879 68,581 715,105 730,822 735,913 746,611 753,027
Of which English HAs 0 0 0 0 0 9,412 8,705 9,654 10,245 10,800

Table 3.3 shows the split of total expenditure between current and capital for Scotland. The capital spending share is quite variable between 2011-12 and 2015-16. This reflects a number of factors, such as the transfer of the Royal Mail Pension Plan into the public sector in 2011-12.

Table 3.3: Current and Capital Expenditure (% of Total Expenditure): Scotland
per cent
2011-12 2012-13 2013-14 2014-15 2015-16
Current 89.3% 88.2% 89.8% 89.8% 90.3%
Capital 10.7% 11.8% 10.2% 10.2% 9.7%

Table 3.4 below shows estimates of Scottish and UK public sector expenditure as a share of GDP. This provides an illustration of the relative size of public spending between countries and over time. It is not an estimate of the contribution of public spending to the economy as much of this spending consists of transfers from government to individuals and businesses. Excluding North Sea GDP, public spending in Scotland has been declining, as a share of GDP, since 2011-12. This follows the same trend for the UK as a whole. Including a geographical share of North Sea GDP, public spending as a share of GDP has increased over the five years since 2011-12, reflecting the fall in North Sea GDP over this period.

Table 3.4: Total Managed Expenditure as a Share of GDP
per cent of GDP
2011-12 2012-13 2013-14 2014-15 2015-16
Scottish TME as a Share of GDP:
Excluding North Sea GDP 50.6% 50.5% 47.9% 46.9% 46.6%
Including population share of North Sea GDP 49.7% 49.8% 47.2% 46.4% 46.3%
Including geographical share of North Sea GDP 42.9% 44.3% 42.3% 43.1% 43.7%
UK TME as a share of GDP:
100% of North Sea GDP 43.8% 43.2% 41.8% 40.7% 40.1%

Table 3.5 shows estimated total public sector expenditure for Scotland and the UK per person. Since 2011-12, spending per head in Scotland has been between 9.7% and 10.8% higher than the UK average. Around one percentage point of this difference is due to water and sewerage services being provided by the public sector in Scotland, and therefore included in Scottish expenditure, whilst in England and Wales they are operated by the private sector and therefore excluded from UK expenditure. Tables 3.6 and 3.7 show current, capital, and total expenditure for Scotland and the UK respectively.

Table 3.5: Total Expenditure Per Person

£ per person
2011-12 2012-13 2013-14 2014-15 2015-16
Scotland 12,400 12,700 12,600 12,700 12,800
UK 11,300 11,500 11,500 11,500 11,500
Difference (Scotland minus UK) 1,100 1,200 1,100 1,100 1,200
Relative Expenditure for Scotland ( UK = 100) 109.9 110.8 109.7 109.9 110.5

Note: Figures rounded to the nearest £100

Box 3.1 Social protection spending in Scotland

Social protection spending is the largest single spending line in GERS, and covers a range of different spend types.

The largest spending element within social protection is expenditure on the state pension by the Department for Work and Pensions ( DWP). This is followed by DWP's spending on other social security such as disability and incapacity related benefits, income support, jobseekers allowance, and housing benefit. Tax credits and child benefit are part of HMRC spending, which also includes universal credit. Scottish Government social security spend includes the Scottish Welfare Fund, Council Tax Reduction Scheme, and Scottish Government expenditure on Discretionary Housing Payments, all of which are administered by Local Authorities.

Some UK social security expenditure, mostly associated with the state pension, is paid to non- UK residents. Scotland is allocated a population share of this expenditure in GERS.

Social protection spending for Scotland (£ million)
2011-12 2012-13 2013-14 2014-15 2015-16
Social security spending in Scotland
State pension 6,328 6,791 7,051 7,324 7,552
Housing benefit 1,728 1,789 1,770 1,776 1,772
Other DWP social security 5,749 5,795 5,621 5,659 5,734
HMRC child benefit and tax credits 3,173 3,134 3,019 2,957 2,917
Scottish Government social security 418 408 409 412 401
Social security spending in Scotland 17,396 17,917 17,461 17,716 17,975
Share of benefit spending outside UK and corporate spend 479 518 458 545 665
Other social protection
Public sector pensions 732 866 881 961 961
Social care for the elderly 2,096 2,249 2,263 2,230 2,304
Other 954 916 1,265 1,451 1,686
Total social protection 21,657 22,465 22,328 22,903 23,591

Other social protection spending consists primarily of Local Authority expenditure on social care to families and children.

A more detailed breakdown of social security spending is published by DWP, available at the link below.
https://www.gov.uk/government/collections/benefit-expenditure-tables

Spending by different parts of the Public Sector

Table 3.8 below provides a breakdown of Scottish expenditure by the Scottish Government, Local Authorities and Public Corporations and Other UK GoveArnment departments.

Table 3.6: Total Expenditure: Scotland 2011-12 to 2015-16
£ million
Current Capital Total
2011-12 2012-13 2013-14 2014-15 2015-16 2011-12 2012-13 2013-14 2014-15 2015-16 2011-12 2012-13 2013-14 2014-15 2015-16
General public services
Public and common services 1,288 1,149 1,268 1,275 1,204 181 145 201 199 191 1,470 1,294 1,469 1,474 1,395
International services 597 598 761 692 675 50 46 52 177 164 647 644 813 869 839
Public sector debt interest 3,520 3,146 3,071 2,760 2,802 0 0 0 0 0 3,520 3,146 3,071 2,760 2,802
Defence 2,412 2,260 2,286 2,270 2,295 821 766 734 765 735 3,233 3,026 3,020 3,035 3,030
Public order and safety 2,666 2,652 2,413 2,679 2,740 216 204 139 123 93 2,883 2,857 2,552 2,802 2,834
Economic affairs
Enterprise and economic development 592 696 803 736 790 250 244 196 182 253 842 941 999 919 1,042
Science and technology 31 20 24 45 113 342 308 370 389 386 373 329 394 434 499
Employment policies 281 244 320 296 226 8 7 7 3 2 289 251 327 299 228
Agriculture, forestry and fisheries 826 770 795 740 694 146 152 168 196 145 972 922 962 936 839
Transport 1,456 1,544 1,565 1,335 1,442 1,266 1,429 1,355 1,470 1,784 2,721 2,973 2,920 2,805 3,226
Environment protection 922 888 909 941 945 234 299 363 299 288 1,156 1,187 1,271 1,241 1,233
Housing and community amenities 218 75 123 125 211 1,506 1,541 1,527 1,575 1,151 1,724 1,616 1,649 1,700 1,363
Health 10,469 10,657 10,866 11,145 11,658 644 682 635 487 518 11,113 11,339 11,501 11,633 12,176
Recreation, culture and religion 1,177 1,290 1,203 1,430 1,166 339 332 243 194 264 1,516 1,622 1,446 1,624 1,430
Education and training 6,854 6,867 6,920 6,981 7,246 688 655 636 634 744 7,542 7,522 7,555 7,615 7,990
Social protection 21,592 22,379 22,310 22,868 23,527 65 87 18 35 64 21,657 22,466 22,328 22,903 23,591
EU Transactions -83 158 120 250 211 0 0 0 0 0 -83 158 120 250 211
Accounting adjustments 3,914 4,166 4,457 4,392 4,013 270 1,037 179 189 -159 4,184 5,202 4,636 4,582 3,854
Total 58,734 59,560 60,213 60,961 61,958 7,024 7,935 6,822 6,917 6,623 65,758 67,495 67,035 67,879 68,581
Table 3.7: Total Expenditure: UK 2011-12 to 2015-16
£ million
Current Capital Total
2011-12 2012-13 2013-14 2014-15 2015-16 2011-12 2012-13 2013-14 2014-15 2015-16 2011-12 2012-13 2013-14 2014-15 2015-16
General public services
Public and common services 10,091 9,722 9,502 9,891 10,336 1,415 1,586 1,825 1,775 1,510 11,506 11,308 11,327 11,666 11,846
International services 7,138 7,177 9,170 8,357 8,157 593 546 621 2,133 1,978 7,731 7,723 9,791 10,490 10,135
Public sector debt interest 44,476 40,354 39,703 36,473 36,724 0 0 0 0 0 44,476 40,354 39,703 36,473 36,724
Defence 28,854 27,142 27,564 27,443 27,772 9,801 9,198 8,838 9,240 8,876 38,655 36,340 36,402 36,683 36,648
Public order and safety 30,486 29,861 28,296 28,370 28,818 1,585 1,410 1,258 1,251 1,367 32,071 31,271 29,554 29,621 30,185
Economic affairs
Enterprise and economic development 3,395 4,079 4,517 4,215 4,606 1,376 942 1,178 862 723 4,771 5,021 5,695 5,077 5,329
Science and technology 370 272 363 496 836 3,253 3,061 3,838 3,983 3,951 3,623 3,333 4,201 4,479 4,787
Employment policies 3,143 2,786 3,573 3,115 2,393 84 79 77 32 21 3,227 2,865 3,650 3,147 2,414
Agriculture, forestry and fisheries 5,507 4,970 4,962 4,690 4,121 270 307 409 516 421 5,777 5,277 5,371 5,206 4,542
Transport 8,197 7,675 7,666 6,616 10,825 11,216 10,864 11,414 13,683 17,236 19,413 18,539 19,080 20,299 28,061
Environment protection 7,743 7,376 7,608 7,813 8,037 2,757 3,288 3,575 3,753 3,572 10,500 10,664 11,183 11,566 11,609
Housing and community amenities 2,725 3,088 2,987 2,855 2,992 7,428 6,869 6,820 7,340 7,019 10,153 9,957 9,807 10,195 10,011
Health 115,347 117,944 121,968 127,651 133,018 5,907 6,358 7,421 6,402 5,685 121,254 124,302 129,389 134,053 138,703
Recreation, culture and religion 9,634 10,666 9,573 10,425 9,379 2,854 2,044 1,837 2,022 2,048 12,488 12,710 11,410 12,447 11,427
Education and training 77,120 76,007 76,508 76,299 75,908 9,359 8,219 8,838 9,450 8,117 86,479 84,226 85,346 85,749 84,025
Social protection 244,248 252,988 254,373 261,015 263,819 596 450 -402 -107 332 244,844 253,438 253,971 260,908 264,151
EU transactions 4,311 6,705 7,210 6,225 7,671 0 0 0 0 0 4,311 6,705 7,210 6,225 7,671
Accounting adjustments 43,180 47,308 50,883 51,338 44,116 10,646 19,481 11,940 10,989 10,643 53,826 66,789 62,823 62,327 54,759
Total 645,965 656,120 666,426 673,287 679,528 69,140 74,702 69,487 73,324 73,499 715,105 730,822 735,913 746,611 753,027
Table 3.8: Total Expenditure: Scottish Government, Local Authorities, Public Corporations, and Other UK Government: Scotland 2011-12 to 2015-16
£ million
Scottish Government, LAs and Public Corporations Other UK Government Total
2011-12 2012-13 2013-14 2014-15 2015-16 2011-12 2012-13 2013-14 2014-15 2015-16 2011-12 2012-13 2013-14 2014-15 2015-16
General public services
Public and common services 989 855 1,016 1,009 964 481 439 453 465 431 1,470 1,294 1,469 1,474 1,395
International services 0 0 0 0 0 647 644 813 869 839 647 644 813 869 839
Public sector debt interest 0 0 0 0 0 3,520 3,146 3,071 2,760 2,802 3,520 3,146 3,071 2,760 2,802
Defence 3 3 3 3 0 3,230 3,023 3,016 3,032 3,030 3,233 3,026 3,020 3,035 3,030
Public order and safety 2,601 2,597 2,307 2,567 2,605 282 260 245 235 229 2,883 2,857 2,552 2,802 2,834
Economic affairs
Enterprise and econ development 773 743 782 743 773 69 197 217 175 270 842 941 999 919 1,042
Science and technology 5 5 5 5 5 368 324 390 430 494 373 329 394 434 499
Employment policies 0 0 0 0 0 289 251 327 299 228 289 251 327 299 228
Agriculture, forestry and fisheries 961 912 948 918 824 11 11 15 18 15 972 922 962 936 839
Transport 2,573 2,804 2,750 2,623 2,799 148 169 170 181 427 2,721 2,973 2,920 2,805 3,226
Environment protection 935 944 1,013 950 958 221 242 259 291 275 1,156 1,187 1,271 1,241 1,233
Housing and community amenities 1,724 1,616 1,649 1,700 1,363 0 0 0 0 0 1,724 1,616 1,649 1,700 1,363
Health 10,916 11,184 11,354 11,483 12,002 197 155 147 149 173 11,113 11,339 11,501 11,633 12,176
Recreation, culture and religion 1,088 1,119 1,066 1,142 1,004 428 504 380 482 426 1,516 1,622 1,446 1,624 1,430
Education and training 7,519 7,503 7,541 7,587 7,971 23 19 14 28 19 7,542 7,522 7,555 7,615 7,990
Social protection 5,300 5,513 5,481 5,659 5,805 16,356 16,953 16,848 17,244 17,785 21,657 22,466 22,328 22,903 23,591
EU transactions 0 0 0 0 0 -83 158 120 250 211 -83 158 120 250 211
Accounting adjustments 3,660 3,680 3,743 3,647 3,465 523 1,522 893 934 389 4,184 5,202 4,636 4,582 3,854
Total 39,046 39,477 39,658 40,036 40,536 26,712 28,018 27,377 27,842 28,045 65,758 67,495 67,035 67,879 68,581

Box 3.2: Scotland's Notional Contributions to the European Union Budget

As a member of the European Union ( EU) the UK contributes to the EU budget and receives funding from the EU via a number of programmes.

As discussed at the beginning of this Chapter, the EU Transactions lines in the tables above are produced on a National Accounts basis, and exclude traditional own resource contributions to the EU. These are normally included when reporting on the UK's net contribution to EU budgets. The tables in this box show net payments to the EU including these contributions.

Although contributions to the EU are made by the public sector, funding from the EU is received by both public and non-public sector bodies. Both the EU Transactions line in the above tables and the figures in this box report only on transactions with the EU by the public sector, in common with the presentation used by HM Treasury. EU payments to Higher Education Institutions, which are not part of the public sector, are discussed further below.

Funding the EU Budget

There are three key sources of funding for the EU, which come from each member state:

  • Traditional own resource ( TOR) - Agriculture duties and customs duties levied on agriculture and non-agriculture products from outside the EU.
  • VAT based own resource - Calculated as a percentage of countries' VAT tax base.
  • Gross National Income ( GNI) based own resource - Calculated as a percentage of countries' GNI. This is the EU's single largest source of revenue.

UK Correction (Rebate, or Abatement)

Since 1985, the UK has received a rebate. The UK rebate is broadly equal to 66% of the UK's net contribution (in the previous year). Further detail is available from HM Treasury's European Union Finances 2015 publication.
https://www.gov.uk/government/statistics/european-union-finances-2015

Scotland's contribution to the EU Budget

Scotland does not contribute directly to the EU budget. In this analysis, Scotland is therefore assigned a share of the UK's contribution based on various apportionment methodologies. Scotland's share of the UK's GNI based contribution is estimated using the ratio of Scottish to UK GDP, both including and excluding the North Sea (the non-North Sea share is used in headline GERS estimates). VAT based own resource is assigned to Scotland using Scotland's share of UK VAT receipts, and a population share is used to assign TOR.

Receipts from the EU

Receipts received from the EU are broken down into two categories: public sector receipts and external assistance. Scottish public sector receipts reflect expenditure specifically for Scotland as reported in the Scottish Government's Consolidated Accounts, and include as payments under the Common Agricultural Policy, European Structural Funds, and European Regional Development Funding.

The EU's external assistance budget provides aid to states outside the EU. A share of this expenditure is attributed to the UK based on its contribution to the EU budget. This is shown in the other attributed costs line in the tables below. A population share of this expenditure is assigned to Scotland.

UK's Net Contribution to the EU

Two measures are generally used to illustrate the UK's net contribution to the EU:

  • The primary measure is the UK's net contribution to the EU budget - this is calculated as the difference between the UK's gross contribution to the EU budget (less the rebate) and public sector EU receipts.
  • A secondary measure is the UK's net payment to EU institutions - this is equal to the UK's net contribution to the EU Budget less its share of the EU's external assistance aid budget.

The table below sets out the latest UK figures, as contained in Table C.1 of Public Expenditure Statistical Analyses, published July 2016.

UK : Transactions with the institutions of the EU, 2011-12 to 2015-16

£ million
2011-12 2012-13 2013-14 2014-15 2015-16
GNI based contribution 11,218 12,303 13,845 14,154 12,570
UK abatement -3,516 -3,172 -4,130 -4,811 -4,068
VAT-based contribution to the EU 2,276 2,398 2,163 2,316 2,751
Expenditure transfers to the EU 9,978 11,529 11,879 11,658 11,253
Receipts to cover collection costs of TOR -735 -720 -733 -743 -771
TOR 2,940 2,891 2,933 3,006 3,085
Gross contribution to the EU budget 12,184 13,699 14,079 13,921 13,567
Public sector EU receipts -4,771 -4,022 -3,856 -4,690 -2,811
Net contributions to the EU budget 7,413 9,678 10,223 9,231 10,756
less other attributed costs 163 82 79 0 0
Net payments to EU institutions 7,250 9,595 10,143 9,231 10,756

Source: Public Expenditure Statistical Analyses (July 2016), Table C.1
https://www.gov.uk/government/statistics/public-expenditure-statistical-analyses-2016

Scotland's Net Contribution to the EU

Estimates are provided for Scotland in the table below, showing the GNI contribution assigned using Scotland's share excluding and including the North Sea. As discussed at the beginning of this Chapter, the difference between Scotland's net payments to EU institutions (based on GDP excluding the North Sea) in the table below and the EU Transactions line in Tables 3.6 and 3.8 is Scotland's share of UK TOR.

Scotland: Estimated transactions with the institutions of the EU 2011-12 to 2015-16


£ million
2011-12 2012-13 2013-14 2014-15 2015-16
GNI based contribution ( GDP exc North Sea ( NS)) 893 972 1,102 1,116 984
GNI based contribution ( GDP inc NS) 1,053 1,110 1,243 1,211 1,046
UK abatement (Population share) -294 -264 -343 -398 -335
VAT-based payments to the EU 193 204 187 199 237
Expenditure transfers to the EU ( GDP exc NS) 792 912 946 917 885
Expenditure transfers to the EU ( GDP inc NS) 953 1,050 1,087 1,012 948
Receipts to cover collection costs of TOR -61 -60 -61 -61 -64
TOR 246 241 244 249 254
Gross contribution to the EU budget ( GDP exc NS) 976 1,093 1,128 1,104 1,076
Gross contribution to the EU budget ( GDP inc NS) 1,137 1,230 1,270 1,200 1,138
Public sector EU receipts -800 -687 -758 -606 -610
Net contributions to the EU budget ( GDP exc NS) 176 406 370 498 465
Net contributions to the EU budget ( GDP inc NS) 337 543 512 594 528
less other attributed costs 14 7 7 0 0
Net payments to EU institutions ( GDP exc NS) 163 399 364 498 465
Net payments to EU institutions ( GDP inc NS) 323 537 505 594 528

EU Payments to Higher Education Institutions

This box has covered the transactions that the Scottish and UK public sector has with the EU. However, the EU also makes payments to bodies outside the public sector, such as Higher Education Institutions ( HEIs), which are considered private sector not-for-profit institutions. The Higher Education Statistics Agency ( HESA) produces statistics on these payments. These payments are not included in the tables shown above as they are not transactions with the public sector and are therefore out of the scope of public sector finances.

Payments to HEIs from the EU include:

  • Payments from EU government bodies
  • Payments from EU-based charities through an open competitive process
  • Payments from EU industry, commerce and public corporations
  • Payments from other EU bodies

To illustrate the size of these payments, the table below shows research grants and contracts income from the EU to HEIs for Scotland and the UK for academic years 2010-11 to 2014-15, which is the latest year for which figures are available. This spending is outside the public sector, and therefore has no impact on the figures reported in GERS.

EU Payments to Higher Education Institutions, Academic Year 2010-11 to 2014-15
£ million
2010-11 2011-12 2012-13 2013-14 2014-15
Scotland 64.1 74.7 81.4 88.8 94.1
UK 513.0 599.7 690.3 789.2 836.1

Note: The academic year runs from 1 August to 31 July
These figures have been reproduced with the permission of the Higher Education Statistics Agency ( HESA). More details on these statistics can be found on the HESA website ( www.hesa.ac.uk ).

Box 3.3: Private Finance Initiative and Non-Profit Distributing Financing support for Public Private Partnerships ( PPPs)

This box gives an introduction to Public Private Partnerships ( PPPs) and the funding models that have been used in Scotland. It also breaks down unitary charge payments by scheme type, by type of procuring authority and by the sector of the project.

The recent GERS consultation highlighted user interest in data on PPPs, and the Private Finance Initiative ( PFI) funding model. Following this response, the information previously provided in Table A.11 in GERS 2014-15 has been expanded in this box to provide more detail on the unitary charge payments associated with PPPs. This analysis uses sources of publically available data, all brought together into an accompanying spreadsheet for users to examine further if they wish. The spreadsheet is available from the GERS website:
http://www.gov.scot/Topics/Statistics/Browse/Economy/GERS/RelatedAreas

Introduction to PFI, PPPs, and NPD

Public Private Partnerships ( PPPs) are long-term contracts for services that include the provision of associated facilities or properties. Under the contract, the private sector is generally responsible for various roles, including designing and constructing a building or facility, and maintaining and servicing it throughout the contract term. The public sector retains accountability for the main public services. The private sector is responsible for financing the project up front and only receives payment from the public sector once construction has been completed and the services have commenced.

The Private Finance Initiative ( PFI) used to be the UK's preferred form of PPP. In Scotland, the Non-Profit Distributing ( NPD) model has been the Scottish Government's preferred procurement option since 2007. For more information on these schemes, and the data sources used in this box, please see the Scottish Government website:
http://www.gov.scot/Topics/Government/Finance/18232/12308

Unitary Charge Payments

Payments for both PFI and NPD projects take the form of a unitary charge which is usually paid annually over the lifetime of the contract. It is worth emphasising that these payments are already fully reflected in the GERS spending figures. In addition, the table below includes Ministry of Defence projects in Scotland which are procured by and entirely funded by the Ministry of Defence. Scotland is assigned a population share of this expenditure in GERS. Unitary charge payments cover repayment of capital, interest payments and in some cases service charge payments. Figures are shown here for the years 2011-12 to 2015-16 to be consistent with other tables in this report. The underlying spreadsheets on the GERS website have data covering the period back to 1998-99 as well as estimated payments into the 2040s. Additional information about the individual procuring authority (e.g. individual local authority and health board information) and comparisons with the UK are also provided.

Unitary charge payments, 2011-12 to 2015-16

£ millions
2011-12 2012-13 2013-14 2014-15 2015-16
By scheme type
Private Finance Initiative 889 924 944 969 1,004
Non-Profit Distributing models 1 39 52 55 59 75
Total Unitary Charge payments 928 977 999 1,028 1,079
By procuring authority




Further Education 2 2 2 2 10
Local Government 459 478 488 496 508
NHS 200 227 235 242 249
Other Scottish Government 105 105 109 118 136
Ministry of Defence 22 23 22 24 25
Scottish Water 139 142 143 146 151
Total Unitary Charge payments 928 977 999 1,028 1,079
By sector of project




Energy 4 4 4 5 5
Further Education 2 2 2 2 10
Health 200 227 235 242 249
IT 1 1 - - -
Ministry of Defence 22 23 22 24 25
Offices 3 3 3 3 3
Police 4 4 4 4 4
Prisons 47 45 46 49 49
Schools 419 436 446 453 465
Transport 71 75 78 84 102
Waste 154 157 158 162 168
Total Unitary Charge payments 928 977 999 1,028 1,079
UK Total Unitary Charge Payments
8,504

9,257

9,740

10,189

10,545
Scotland as % UK
10.9%

10.6%

10.3%

10.1%

10.2%

Note: Non-profit distributing models includes projects delivered by the hub model and projects commissioned prior to 2010. Further detail is available at: http://www.gov.scot/Topics/Government/Finance/18232/12308
Source: HM Treasury and Scottish Government figures. See the accompanying spreadsheet for full details of all sources


Contact

Email: Mairi Spowage, economic.statistics@gov.scot