Scotland: Public spending and revenue
Public spending and taxation in Scotland was a hotly debated issue in the run up to the Scottish independence referendum, and has remained so since. A range of statistics exist on the subject: here we look at what these say and how they are measured.
This briefing was last updated in September 2021 and will no longer be updated.
Data for 2023/24 is available from the Scottish Government's Expenditure and Revenue Scotland (GERS) 2023-24.
The Coronavirus pandemic greatly affected government spending and revenue in 2020/21
Many of the figures discussed below are for 2020/21, which is the first full year affected by the coronavirus pandemic. Across the UK, in 2020/21, government spent significant amounts to tackle the virus and support households and incomes. Tax revenues also fell, largely due to less economic activity and government policies. It was not a typical year.
Spending and revenue
The Scottish Government estimates that total public spending in Scotland was £99 billion in 2020/21, equivalent to £18,140 per head. This estimate covers all public spending in Scotland: it includes spending by the Scottish Government and Scottish local authorities, but also spending by UK Government departments in Scotland.
Scotland’s public spending per head is higher than the UK average. It is higher than all the English regions and Wales, but lower than Northern Ireland.
Government revenue is largely centralised in the UK with the majority, including much of that raised in Scotland, being collected centrally by HM Revenue and Customs. Despite this it is possible to estimate the amount of tax raised in Scotland. The size of the estimate depends on how North Sea oil and gas revenues are allocated to Scotland. The Scottish Government estimates that around £62 billion-£63 billion of revenues were raised in Scotland in 2020/21, equivalent to approximately £11,400-£11,500 per head.
Scotland accounted for 9.1% of UK public spending, around 7.9% of UK revenues and 8.1% of UK population in 2020/21.
North Sea revenues
In recent years, falls in the oil price combined with high levels of investment and rising decommissioning costs have resulted in North Sea revenues falling to the lowest levels since records began in 1968/69. The UK Government collects North Sea revenues.
The Scottish Government uses two approaches to estimate Scotland’s share of North Sea revenues. One approach shares the revenues between Scotland and the rest of the UK on a population basis: this is often described as a per capita share. The other approach shares the revenues on a geographical basis according to where the oil and gas fields are located.
Allocated to Scotland on a geographical basis, North Sea revenues in 2020/21 are estimated to be £0.6 billion (£550 million); allocated on a population basis, they are estimated to be £0.03 billion (£34 million).
Fiscal deficit
In 2020/21, Scotland’s net fiscal deficit – the difference between estimated revenues and public spending – is estimated at 22.4% of GDP if North Sea revenues are shared according to where the oil and gas fields are located (on a geographical basis) and 23.8% of GDP if North Sea oil and gas are excluded. This compares with a UK fiscal deficit of 14.2% of GDP.
Most of the statistics in this note are from the Scottish Government’s publication Government Expenditure and Revenue Scotland 2020-2021 (August 2021).