Autumn Budget 2016-2017: supporting document

Introduction

1. This booklet provides information for the Parliament and others in support of the 'Budget (Scotland) Act 2016 (Amendment) Order 2016' - the Autumn Budget Revision. The Order is a Scottish Statutory Instrument laid before the Scottish Parliament by the Scottish Government in September 2016. 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 2016, which authorises the Scottish Government's spending plans for the financial year 2016-17.

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 £151.8 million);

ii) technical changes in respect of Motorways and Trunk Roads and Student Loans (net increase to the budget of £107.0 million);

iii) Whitehall Transfers and HM Treasury allocations to the Scottish Government (£0.6 million); and

iv) the transfer of resources between Scottish Government portfolios.

In total these changes will increase Scottish Government budget by £259.4 million from £36,949.4 million to £37,208.8 million.

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

Restructuring of Portfolios

5. As a result of the First Minister's announcement on 18 May 2016 on the restructuring of the Scottish administration the budgets shown in this document reflect the new portfolios. Table 1.8 provides a reconciliation between the former Scottish Government portfolios and the new Scottish Government structure. This provides an explicit link with table 1.4 of the Supporting Document to the 2016-17 Budget Bill.

Funding Changes

6. As in past years, as part of the internal robust monitoring process and in line with good practice, we have taken the opportunity at the Autumn Budget Revision to ensure that we maximise the budget available in 2016-17. This proactive budget management strategy is reflected in the portfolio schedules.

Technical Changes

7. The ODEL non-cash budget for Motorways and Trunk Roads has been increased by £157 million to align the budget with accounting requirements and the Student Loans RAB ring-fenced RDEL budget has been reduced by £50 million in line with projected requirement.

Transfers

8. There is one Whitehall Transfer recognised as part of the Autumn Budget Revision. A budget transfer of £0.6 million from HM Treasury from the proceeds of the Tampon Tax to support women's charities.

9. 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 & Sport to Education & Skills in respect of nursing and midwifery education (£54.0 million);
• transfer from Health & Sport to Education & Skills in respect of clinical academics and senior clinical GPs (£6.6 million);
• transfer from Education & Skills to Local Government for Kinship Care Allowances (£10.1 million);
• transfer from Education & Skills to Local Government for the Named Persons scheme (£9.4 million);
• transfer from Economy Jobs and Fair Work to Local Government for Enterprise Zones (£12.0 million);
• transfer from Economy, Jobs and Fair Work to Rural Economy and Connectivity for Wave Energy Scotland (£10.0 million); and
• transfer from Justice to Scottish Courts and Tribunals Service for judicial pensions (£10.1 million).

Table A: Revisions by type

Format of Supporting Document

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

11. The summary tables here 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 Autumn Budget Revision Order itself. A third set of summary tables provides a reconciliation between the resource budgets and the cash authorisations. Table 1.7 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.

12. 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: DEL (Departmental Expenditure Limit), AME (Annually Managed Expenditure) and spending outside DEL ( ODEL) 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.

13. 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 B: Revised NDPB Cash and Resource Budgets by Portfolio, 2016-17

Process for the Budget Revision

14. 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 Committee.