The Scottish Government's Medium Term Financial Strategy
This is the fourth Medium Term Financial Strategy (MTFS) published by the Scottish Government. The MTFS provides the context for the Scottish Budget and the Scottish Parliament.
List of figures, tables and boxes
Figure 1: Comparison of forecasts of Scottish GDP 8
Figure 2: Comparison of forecasts of Scottish unemployment rate (%) 9
Figure 3: Forecasts of Scottish / UK inflation rate (%) 10
Table 1: Headline economy forecasts 10
Figure 4: Resource funding outlook for the Scottish Government 15
Table 2: Resource funding outlook for the Scottish Government 15
Table 3: Capital grant funding outlook for the Scottish Government (excl. financial transactions) 20
Table 4: National Infrastructure Mission Baseline 22
Table 5: Illustrative cumulative paybill costs (£ billion) 27
Table 6: Current employer pension contribution rates 27
Figure 5: Proportion of people employed by the public sector: UK nations headcount (2021 Q2) 28
Table 7: Illustrative cumulative pay award and workforce costs (£ billion) 28
Figure 6: Modelled funding and spending scenarios 31
Table 8: Summary of key short-term risks to fiscal sustainability 32
Table 9: Summary of key medium- to long-term risks to fiscal sustainability 34
Figure A.1: Contribution to total NSND Income Tax liabilities by income distribution, 2019-20 55
Figure A. 2: Histogram of two simulated tax bases for two hypothetical countries 56
Table A.1: Summary statistics 56
Table A.2: Scenario 1 - uniform 2% growth in earnings across all taxpayers in country A and B 57
Figure A.3: Current IPC BGA mechanism 60
Figure A.4: Proposed "by band" BGA mechanism 60
Table A.6: Comparing alternative BGA indexation methods for NSND Income Tax 61
Table B.1: Forecasts of tax revenues and Block Grant Adjustments 62
table B.2: Forecasts of social security expenditure and Block Grant Adjustments (£ million) 4 63
Table B.3: Confirmed Income Tax reconciliation applying to 2022-23 Budget (£ million) 65
Table B.4: Forecast Income Tax reconciliation applying to 2023-24 Budget (£ million) 65
Table B.5: Forecast Income Tax reconciliation applying to 2024-25 Budget (£ million) 65
Table B.6: 2021-22 revenue forecast (£ million) 66
Table B.7: 2021-22 in-year BGA reconciliations (£ million) 66
Table B.8: change in net position for 2021-22 Scottish Budget (£ million) 67
Table B.9: 2020-21 final BGA reconciliation (£ million) 67
Table B.10: 2020-21 outturn compared with forecasts (£ million) 68
Table B.11: 2021-22 expenditure forecast (£ million) 68
Table B.12: 2021-22 in-year BGA reconciliation (£ million) 69
Table B.13: Change in net position for 2021-22 Scottish Budget (£ million) 70
Table B.14: Social security 2020-21 final BGA reconciliation (£ million) 70
Table B.15: 2020-21 social security outturn compared with forecasts (£ million)1 71
Table B.17: 2020-21 final BGA reconciliation (£ million) 73
Table B.18: 2020-21 outturn compared with forecasts (£ million) 73
Table B.19: Reconciliations applying to 2022-23 Budget 74
Table B.20: Capital borrowing and repayment schedule 75
Table B.21: Medium-term impact of reconciliations and resource borrowing (£ million) 76
Contact
Email: sophie.osborn@gov.scot
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