Budget (Scotland) Act: Autumn Budget Revision 2021-2022

Introduction

1. This booklet provides information for the Parliament and others in support of the ‘Budget (Scotland) Act 2021 (Amendment) Regulations 2021’ – the Autumn Budget Revision. The Order is a Scottish Statutory Instrument laid before the Scottish Parliament by the Scottish Government in September 2021. 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 2021, which authorises the Scottish Government’s spending plans for the financial year 2021-22.

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) Funding changes to reflect deployment of available resources to portfolios (total net increase to the budget of £1,173.8 million);

ii) Technical adjustments (net increase to the budget of £267.2 million);

iii) Whitehall Transfers and HM Treasury allocations to the Scottish Government (£29.4 million); and

iv) the transfer of resources between Scottish Government portfolios (net zero).

4. In total these changes will increase the Scottish Government budget by £1,470.4 million from £55,024.8 million to £56,495.2 million. These changes reflect Barnett consequential funding confirmed through the UK Main Estimate process, 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 at Supplementary Estimate.

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

Restructuring of Portfolios

6. As a result of the First Minister's announcement on 19 May 2021 on the restructuring of the Scottish administration the budgets shown in this document reflect the new portfolios. Table A provides a reconciliation between the former Scottish Government portfolios and the new Scottish Government structure. This provides an explicit link with table E2 of the Scottish Budget 2021-22.

Funding Changes

7. Covid allocations amounting to £1,050.6 million have been allocated in this budget revision. This is funded from a combination of Covid-19 consequentials added at the UK Main Estimate Process and drawdowns from the Scotland Reserve.

8. Additional non-Covid-19 related funding allocations have been made from a combination of reprioritised resources where available, additional drawdowns from the Scotland Reserve and non Covid-19 consequentials. In total the funding changes amount to £1,173.8 million as outlined in table 1.2 in the document. Sources of funding for all allocations are detailed in table 1.7.

Technical Adjustments

9. Technical adjustments have been made to the NHS and Teachers pensions budgets to reflect revised estimates from HMT and are mainly due to an increase in the estimate of current service costs following the agreed pay rise for the NHS. As these are Annually Managed Expenditure (AME) adjustments these changes have no effect on the Scottish Government’s discretionary expenditure (£267.2 million).

Transfers

10. There are three Whitehall Transfers recognised as part of the Autumn Budget Revision. An increase to Scotland’s share of the Immigration Health Surcharge collected by the Home Office (£24.5m), a transfer of £3.5 million from the Money Advice Service for the devolution of Debt Advice Levy and a transfer from the Cabinet Office for Cyber Security of £1.4 million.

11. 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:

• transfer from Health & Social Care to Social Justice, Housing & Local Government to support integration, school counselling services, carer’s act, free personal and nursing care and the living wage (£292.6 million);
• transfer from Health & Social Care to Social Justice, Housing & Local Government to support the living wage for adult social care workers (£30.5 million);
• transfer from Health & Social Care to Education & Skills in respect of nursing and midwifery education (£59.4 million);
• transfer from Health & Social Care to Education & Skills in respect of additional medical student places (£5.2 million) ;
• transfer from Health & Social Care to Finance & Economy to support Research Data Scotland (£5.0 million) ;
• transfer from Education & Skills to Social Justice, Housing & Local Government to support Education recovery (£60.0 million) ;
• transfer from Education & Skills to Social Justice, Housing & Local Government for free school meals (£28.0 million) ;
• transfer from Education & Skills to Social Justice, Housing & Local Government for free school meals holiday support (£21.8 million) ;
• transfer from Education & Skills to Social Justice, Housing & Local Government for Additional Support for Learning (£15.0 million);
• transfer from Education & Skills to Social Justice, Housing & Local Government for Summer of Play Activities for Children (£15.0 million);
• transfer from Net Zero, Energy & Transport to Social Justice, Housing & Local Government for 100 Day Nature Restoration Fund (£5.0 million)
• transfers from Social Justice, Housing & Local Government to Net Zero, Energy & Transport for the Energy Efficiency budget (£184.7 million);
• transfer from Social Justice, Housing & Local Government to Net Zero, Energy & Transport to fund the installation of zero emission heating systems (£5.0 million);
• transfer from Social Justice, Housing & Local Government to Finance & Economy to fund the delivery of the Parental Employability Support Fund (£8.7 million);
• transfer from Social Justice, Housing & Local Government to Education & Skills to support the mental health and wellbeing of children and young people (£7.5 million);
• transfer from Social Justice, Housing & Local Government to Finance & Economy for Self-Isolation Support Grant (£10.7 million);
• transfer from Finance & Economy to Social Justice, Housing & Local Government iro the Building Scotland Fund (net £6.5 million);
• transfer from Justice & Veterans to Scottish Courts and Tribunals Service to support the Justice Recover, Renew, Transform programme (£24.5 million);
• transfer from Justice & Veterans to Crown Office and Procurator Fiscal Service to support the Justice Recover, Renew, Transform programme (£5.0 million); and
• transfer from Net Zero, Energy & Transport to Rural Affairs & Islands for delivery of SRDP Business Development Schemes (£10.5 million)

Format of Supporting Document

11. The Scottish Government will continue to discuss with the Finance and Public Administration Committee and others how it can improve the presentation and usefulness of supporting information.

12. The summary tables on pages 7 to 12 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. 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 Non Departmental Public Bodies (NDPB) 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 table B compares cash and resource budgets.