Summer 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) Regulations 2020' - the Summer 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 Summer Budget Revision is to amend the Budget (Scotland) Act 2020, which authorises the Scottish Government's spending plans for the financial year 2020-21. This is an additional budget revision, brought forward to set out for Parliament detail of the budget measures taken by Scottish Ministers in response to the COVID-19 emergency,

3. The main changes to the Scottish Government's spending plans, as set out in the supporting document to the Budget Bill, are explained in paragraphs 5 and 6. In total these changes will increase the Scottish Government budget by £2,787.2 million from £49,250.7 million to £52,037.9 million. This represents a gross increase in funding of £4,014.4m, which is then offset by a reduction of £972m in Non Domestic Rates income arising as a result of a number of reliefs introduced by Scottish Ministers in response to the COVID-19 emergency, and savings from reprioritisation of £255.2m, to give the net increase of £2,787.2m. The document presents only the changes made to date. The Scottish Government response to COVID-19 is ongoing and any further allocations will be detailed in the Autumn and Spring Budget Revisions later in the year, alongside details of any additional funding provided by the UK government beyond the amounts shown here.

4. The purpose of the Summer Budget Revision is to seek Parliamentary approval for these changes.

Funding Changes

5. This additional budget revision for 2020-21 is specifically aimed at transparently demonstrating how Covid response funding has been applied and is therefore limited to the application of Covid response funding. This allows the Covid response funding to be clearly visible without being obscured by other technical adjustments, which will continue to be processed at the regular autumn and spring budget revisions.

6. The changes that have been made in this Revision include the allocation of £3,581.0 million of consequentials from HM Treasury provided in response to the Covid emergency (of which £972 million is being used to offset the reduction in estimated Non Domestic Rates receipts indicated above), as detailed in the following table:-

£3,063m of these consequentials have been added to the Scottish Government Block Grant at the UK Main Estimate. The balance of these funds would be expected to be added to the Scottish Government budget at UK Supplementary Estimate. However HM Treasury have made clear that they are exploring with UK departments the capacity for them to meet additional Covid related costs from within existing budgets. This implies a risk that not all the consequentials set out here will actually be provided.

7. Details of the allocations that have been made are shown in the portfolio Level 2 and 3 tables in this document. These consequentials have been supplemented by some additional allocations made by Scottish Ministers which have been funded by reprioritisation of existing budgets. These budget changes are also detailed as appropriate.

Format of Supporting Document

8. 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.

9. The summary tables on pages 4 to 8 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 1.4 and 1.5 provide a reconciliation between the resource budgets and the cash authorisations. Tables 1.6 (a) and (b) show the sources of funding that support the changes applied and the movement of available resources. Table 1.7 shows the voted Capital Spending and Net Investment for each portfolio following the SuBR 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.

10. 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.

11. 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.

Process for the Budget Revision

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