Autumn budget revision 2020 to 2021

Introduction

1. This booklet provides information for the Parliament and others in support of the 'Budget (Scotland) Act 2020 (Amendment) (No.2) Regulations 2020' - the Autumn Budget Revision. The Order is a Scottish Statutory Instrument laid before the Scottish Parliament by the Scottish Government in May 2020. The booklet itself has no statutory force - it is produced as an aid to understanding the Order.

2. The purpose of the Autumn Budget Revision is to amend the Budget (Scotland) Act 2020, which authorises the Scottish Government's spending plans for the financial year 2020-21.

3. The main changes to the Scottish Government's spending plans, as set out in the supporting document to the Budget Bill, are explained below:

i) COVID-19 and other funding changes to reflect deployment of available resources to portfolios (total net increase to the budget of £2,553.4 million);

ii) Reprioritisation - emerging underspends used to manage emerging shortfalls elsewhere with in the budget (-£142.0 million)

iii) technical adjustments (net increase to the budget of £39.8 million);

iv) Whitehall Transfers and HM Treasury allocations to the Scottish Government (£7.5 million); and the transfer of resources between Scottish Government portfolios (-£0.7 million due to roundings).

4. In total these changes will increase the Scottish Government budget by £2,458.0 million from £52,037.9 million to £54,495.9 million. The Scottish Government response to COVID-19 is ongoing and the document presents only the changes made to date. Further allocations will be detailed in the Spring Budget Revision later in the year, alongside details of any additional funding provided by the UK government beyond the amounts shown here.

6. The purpose of the Autumn Budget Revision is to seek Parliamentary approval for these changes.

COVID-19 and other Funding Changes

7. On 23 July the Chief Secretary to the Treasury confirmed a minimum allocation of COVID-19 resource funding for the Scottish Government of £6.5 billion. In addition there are £9 million of COVID-19 capital consequentials and £1 million of Financial Transactions. The changes set out in this Revision include the allocation of a further £2.382 billion of those consequentials (in addition to the £3.581 billion allocated at Summer Budget Revision).. Allocation of the remaining £537 million will be set out in the Spring Budget Revision. The following table details consequentials by funding area:-

Totals and breakdowns (£m)	SG
Total Covid-19 support to date	6,510
Public services	3,247
Health services (DHSC)	2,289
Local authorities (MHCLG)	381
Railway services (DfT)	448
Schools etc (DfE)	81
Other	47
Business support	2,415
Business support grants (total cost)	1,206
Business rates reliefs (total cost)	1,047
Charity support	55
Cultural Recovery Fund	97
Other	10
Individuals	49
LA hardship fund	49
Guaranteed consequentials to be identified	800

£3,063m of these consequentials have been added to the Scottish Government Block Grant at the UK Main Estimate. The balance of these funds are be expected to be added to the Scottish Government budget at UK Supplementary Estimate.

6. A few additional non-COVID-19 related funding allocations have been made from reprioritised resources where emerging pressures have been identified through the monthly monitoring of budgets.

Reprioritisation

7. In areas where underspends have emerged through the monthly budget management and monitoring process, budgets have been reduced and redeployed to areas, including on COVID-19 related measures, where pressures have been identified. The areas affected by these transfers are detailed throughout the document. (-£142 million)

Technical Adjustments

8. Technical adjustments have been made to allocate additional non cash cover to the Health and Sport, Justice, National Records of Scotland and Revenue Scotland budgets. As these are non-cash adjustments none of these changes have any effect on the Scottish Government's discretionary expenditure (£39.8 million).

Transfers

9. There are two Whitehall Transfers recognised as part of the Autumn Budget Revision. A Machinery of Government transfer of £6.0 million from the Money Advice Service for the devolution of Debt Advice Levy and a transfer from the Cabinet Office for Cyber Security of £1.5 million (£7.5 million).

10. Internal transfers do not affect the Scottish Government's budget as a whole and net to zero. Internal transfers move budget provision within or between portfolios, often to reflect changes in responsibility between portfolios, changes in payment mechanisms and virement intended to maximise the use of available resources. The significant portfolio transfers are as follows:

• transfers from Social Security & Older People to the Communities & Local Government for Discretionary Housing Payments (£73.8 million);
• transfer from Social Security & Older People to the Communities & Local Government for delivery of the Scottish Welfare Fund (£62.9 million);
• transfer from Health & Sport to Education & Skills in respect of nursing and midwifery education (£60.0 million);
• transfer from Communities & Local Government to Rural Economy & Tourism to fund delivery of the shielding box scheme (£32.0 million);
• transfer from Communities & Local Government to Social Security & Older People for the Scottish Child Payment (£21.0 million);
• transfer from Transport, Infrastructure & Connectivity to Communities and Local Government for additional investment in local energy efficiency projects (£16.0 million);
• transfer from Education & Skills to Communities & Local Government for Additional Support for Learning staff (£15.0 million);
• transfer from Health & Sport to Education & Skills in respect of Clinical Academic and Senior Academic GP salaries (£7.1m) ;
• transfer from Communities & Local Government to Economy, Fair Work & Culture for the Parental Employability Support Fund (£5.1 million); and
• transfer from Transport, Infrastructure & Connectivity to Rural Economy & Tourism for the Strategic Timber Transport Scheme (£5.0 million).

Format of Supporting Document

11. The Scottish Government continues to discuss with the Finance and Constitution Committee and others how it can improve the presentation and usefulness of supporting information.

12. The summary tables on pages 5 to 10 set out the changes sought in the Order at portfolio level, and the effect of the proposed changes on the overall cash authorisations. There is a clear read across from the numbers shown on the face of the Budget Act to those in these tables, and to the revised numbers shown in the Summer Budget Revision Order itself. Tables 1.5 and 1.6 provide a reconciliation between the resource budgets and the cash authorisations. Tables 1.7 (a) and (b) show the sources of funding that support the changes applied and the movement of available resources. Table 1.8 shows the voted Capital Spending and Net Investment for each portfolio following the ABR adjustments. It should be noted that for the remainder of the document, only spending that scores as capital in the Scottish Government's or Direct Funded Bodies' annual accounts is shown as capital.

13. The main body of the document then provides a more detailed analysis of the proposed changes on a portfolio by portfolio basis. For each portfolio and direct-funded body, it shows:

• a summary of the changes proposed for the portfolio;
• how the proposed revised portfolio budget is comprised in terms of operating and capital resources, divided into the main spending aggregates: Expenditure Limit, UK Funded AME (Annually Managed Expenditure) and Other spending to show TME (Total Managed Expenditure) in respect of the Scottish Budget;
• details of the proposed major changes; and
• details of the proposed revised budgets disaggregated to Level 3.

14. The Scottish Government's spending proposals are in the main presented to Parliament in resource terms. But to meet the requirements of the "Public Finance and Accountability (Scotland) Act 2000", Budget Bills and Revisions seek authority for the budgets of NDPBs in cash, and NDPB numbers in this supporting document are also given in cash terms. In order to allow comparison with NDPB budgets presented in other Scottish Government publications, the following table compares cash and resource budgets.

Table A - Revised NDPB Cash and Resource Budgets by Portfolio, 2020-21

Portfolios (with at least one Executive NDPB)	NDPB Budget (Cash terms)	Non Cash items	NDPB Budget (Resource Terms)
	£m	£m	£m
Health and Sport	106.8	1.3	108.1
Communities and Local Government	1.9	0.0	1.9
Finance	8.0	0.0	8.0
Education and Skills	2,312.8	33.6	2,346.4
Justice	1,646.9	75.4	1,722.3
Transport, Infrastructure & Connectivity	131.3	12.0	143.3
Environment, Climate Change and Land Reform	109.0	11.0	120.0
Rural Economy and Tourism	145.8	7.1	152.9
Economy, Fair Work and Culture	641.9	20.8	662.7
Total	5,104.4	161.2	5,265.6

Process for the Budget Revision

15 Following detailed consideration by the Subordinate Legislation and Finance Committees, the Scottish Parliament has an opportunity to vote on the Autumn Budget Revision Order subject to a recommendation by the Finance and Constitution Committee.