Budget - provisional outturn 2023 to 2024: briefing note - 20 June 2024

Provisional Outturn – Budget Act

33. Under the Scotland Act 1998, the approval of expenditure is the responsibility of the Scottish Parliament. This responsibility requires the Parliament to set a limit on both the total amount of cash and the total level of resources that the Scottish Government can use. Approval for the final 2023-24 Budget was sought in the Spring Budget Revision laid in February 2024.

34. The largest element of the budget approved by the Scottish Parliament is accounted for within HM Treasury budgetary control totals. Parliamentary budgets also include funding provided annually by HM Treasury (Annually Managed Expenditure or AME) and other budgets which are not subject to the same annual limits.

35. Such budgets can only be used for specific spending, and any under/overspends cannot be deposited in the Scotland Reserve and have no subsequent impact on the Scottish Budget. Variances of this type are generally accounting items such as provisions, NHS impairments and student loans adjustments. These budgets are not available to buy public goods and deliver services.

36. This statement of Provisional Outturn will be followed by reporting on Outturn against the 2023-24 Budget Act limits in a suite of annual accounts which together report on the total Scottish Budget approved by the Scottish Parliament:

• The Annual Accounts of the Scottish Government (and of individual bodies funded from the Scottish Budget) will report on their expenditure compared to the allocation by Budget Act. The annual Scottish Government Consolidated Accounts will be published later in the year.
• There will be a separate additional account reporting on the devolved taxes, showing what was raised and paid into the Scottish Consolidated Fund and was available to fund the activities authorised in the Budget Act.
• The Devolved Taxes Accounts will link to the Account of the Scottish Consolidated Fund, which is a cash account showing all sources of funding, including devolved taxes, to the Scottish Consolidated Fund; these accounts also show the drawdown of funding by the Scottish Government and bodies funded via the Scottish Budget.
• A Statement of Total Outturn for the financial year 2023-24 against the final budget for the Scottish Administration as a whole will also be provided to the Scottish Parliament, on completion of the year end audits for all of the bodies within the Scottish Government budgeting boundary.

37. Table 5 below confirms the overall provisional HM Treasury fiscal outturn variance of £292 million. The footnotes explain the main contributory factors to the different level of reported variances against Parliamentary control totals.

• HMT Budget Variance – is the difference between actual outturn and budget for resource, capital and financial transactions which is reported to HMT. Note the funding adjustments in the table relate to changes to funding post conclusion of the Spring Budget Revision and forms part of the overall Scotland Reserve.
• Non-Cash - used for accounting adjustments, predominantly depreciation. It is not possible to use this ring-fenced non-cash budget to support any day-to-day spending.
• NDPBs / Other Bodies – The Scottish Government Consolidated Accounts includes the Grant in Aid to the Scottish Government sponsored bodies. To reconcile this to HMT Treasury reporting the Grant in Aid is removed and replaced with the actual resource, capital and FT expenditure in those bodies.
• AME / Other – refers to Annually Managed Expenditure and Outside Departmental Expenditure which does not form part of our Scotland Reserve limit and therefore is removed.

* Funding adjustments relate to adjustments made after conclusion of the Spring Budget Revision which are not included in portfolio allocations.

Differences between HMT budget and Scottish Budget (as per the Scottish Consolidated Accounts) is due to:

(a) A combination of adjustments relating to Non-Departmental Public Bodies (NDPBs). The Scottish Government Consolidated Accounts includes the Grant in Aid to the Scottish Government sponsored bodies. For HMT Treasury reporting we must report actual expenditure against the resource, capital and FT expenditure on a resource accounting basis in place of the Grant in Aid.

(b) Small variances relating to other bodies within the portfolios which do not form part of the Scottish Government Consolidated Accounts i.e. Revenue Scotland, Scottish Fiscal Commission, Scottish Courts and Tribunals Service, National Records of Scotland, Scottish Housing Regulator, Office of the Scottish Charity Regulator, Food Standards Scotland, Registers of Scotland, Consumer Scotland, Environmental Standards Scotland, Scottish Parliament Corporate Body and Audit Scotland. Also, any adjustments relating to HM Treasury or Scottish Budgets only.

(c) Variances in Annually Managed Expenditure (AME) and Other expenditure which are only recorded in the Scottish Budget outturn.

(d) Funding adjustments made after conclusion of the Spring Budget Revision can be reflected in our assessment against HMT Treasury totals but not Scottish Budget totals.