Modelling of the Sustainable Growth Commission: FOI review

Information requested

The modelling of Scottish spending that First Minister claimed had been completed by the Scottish Government..

Response

I have now completed my review of your request under the Freedom of Information (Scotland) Act 2002 (FOISA) for information relating to the modelling of Scottish spending that Nicola Sturgeon claimed had been completed by the Scottish Government..

I have concluded that the original decision should be confirmed with modifications.

Whilst the 10 year analysis from 2010-11 to 2019-20 had been carried out for Scottish Government resource expenditure in real terms, some additional analysis was carried out for total public expenditure in Scotland in real terms from 2010-11 to 2016-17. This was based on the latest GERS
figures which were available at the time. All estimates are in 2017-18 prices. 
Annex A contains the information already made available to you together with this new information.

ANNEX A
Extract of email sent by Deputy Director of the Office of the Chief Economic Adviser on 5 June 2018.
From: Fuller S (Simon) <Simon.Fuller@gov.scot>
Sent: 05 June 2018 12:14
To: <[redacted under Section 38(1)(b)]@gov.scot>
Cc: <[redacted under Section 38(1)(b)]@gov.scot>; <[redacted under Section 38(1)(b)]@gov.scot>
Subject: RE: Spending Forecasts

EXTRACT BEGINS
Applying Growth Commission Fiscal Rule to the Scottish Government Budget

• Over the ten year period to 2019-20 the Scottish Government’s budget is being cut by £2.6 billion in real terms.
• If instead we had faced a scenario where our fiscal resource budget had grown at 1% less than real GDP over this period, as suggested by the Growth Commission, then the real terms reductions that we are currently facing would have been completely reversed and it is possible that we would even have seen some modest real terms growth of around £700 million. 
• Note that there would still have been individual years between 2010-11 and 2019-10 when the Scottish budget would have fallen in real terms if the Growth Commission rule was applied. But over the period as a whole it would have risen.

Applying Growth Commission Fiscal Rule to total Scottish Public Spending in GERS

• Between 2010-11 and 2016-17, GERS shows that total public spending for Scotland fell by almost £1.5 billion in real terms.
• If the Growth Commission’s fiscal rule had been applied, total public spending for Scotland would have risen by £2.3 billion instead. Note that under such a scenario, Scotland’s notional budget deficit in 2016-17 would also be approximately £3.8 billion higher than estimated in GERS.

EXTRACT ENDS

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