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Publication - Advice and guidance

Scottish Public Finance Manual

Last updated
29 August 2024 - see all updates
Directorate
Financial Management Directorate
Topic
Money and tax, Public sector

The Scottish Public Finance Manual (SPFM) is issued by the Scottish Ministers to provide guidance on the proper handling and reporting of public funds.

Supporting documents

Spending reviews

Scope

1. This section provides guidance on the spending review process during which Scottish Ministers undertake a detailed examination of portfolio budgets to set future spending plans and targets over a multi-year period.

2.  The aim of a spending review is to develop a longer term spending plan for Scotland. A spending review will be tailored in its approach including the period which it covers. In the past, spending reviews have commonly covered a three year period although they can cover shorter or longer periods.

Funding arrangements for Scotland

3.  The UK Government provides funding to the Scottish Government via a “Block Grant”. This is derived by applying the population-based Barnett formula to changes in planned spending on comparable services by UK government departments. This funding arrangement is detailed in the HM Treasury “Statement of Funding Policy”.

4. The Scottish Government can also raise income through devolved taxes. Under the Fiscal Framework agreed with the UK Government, the Block Grant provided to the Scottish Government is reduced to account for any revenues the UK Government foregoes by devolving these taxes. Further detail on the operation of the Fiscal Framework is set out in the Scottish Government’s “Fiscal Framework Outturn Report”.

5.  When the UK Government provides Scottish Ministers with a firm indication of funding over a multiple year period, this enables Scottish Ministers to plan their spend priorities over a longer period. A spending review is part of this planning process. 

Key points

6. The spending review process in Scotland is managed by Scottish Government officials who scrutinise and challenge portfolio expenditure proposals across the Scottish Government and provide advice to portfolios and Ministers.

7. The spending review process helps Scottish Ministers identify their key spend priorities over a multiple year period. This can result in Scottish Ministers developing a Scottish Budget for more than one year. However, these are separate activities. When Scottish Ministers undertake a spending review, they have a choice on how to approach the determination of future Scottish Budgets including whether they wish to set a Scottish Budget for more than one year.

Contact Details

8. If you have queries on the Scottish approach to spending reviews please contact: ResourceSpendingReview@gov.scot

Page reviewed: September 2021

 

 

First published
23 August 2024
Last updated
29 August 2024 - show all updates

  1. Adding in FGN 2024/03 re the updated AO Spend Control Template and Guidance

  2. Updating the SRO Appointment letter in the documents section to include a point on construction projects in the Annex

  3. Executive agencies model framework document updated.

  4. Non-Ministerial Offices model framework document updated.

  5. Updating the SRO Appointment letter in the documents section to this years dates

  6. Updated link to 'On Board: A Guide for Members of Statutory Boards' within Governance statements chapter.

  7. Updates made to model framework document templates.

  8. Updates made to text within Procurement chapter.

  9. Replaced non-ministerial office model framework document and advisory non-departmental public bodies model framework with updated versions.

  10. Document updated with an additional date - Settlement Agreement supporting documentation - final confirmation of terms

  11. Replaced Non-Ministerial Offices model framework document

  12. Updates to the Settlement, Severance, Early Retirement and Redundancy section. The main section and Annex's A, B C have all been updated along with updated documents and a Finance Guidance Note to explain the changes

  13. Updated the Certificates of Assurance chapter, Annex 2 with the CoA checklist questions for 2023/24 and added a Finance Guidance note outling the changes.

  14. Updates made to proportionate due diligence wording, Accountable Officer tests guidance, risk exposure guidance, public bodies duties, monitoring and management, exit arrangements.

  15. Procurement chapter updated.

  16. Updated 'Major investment projects' paragraph 12 and the SRO appointment letter.

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