Autumn budget 2017-2018: supporting document

Introduction

1. This booklet provides information for the Parliament and others in support of the ‘Budget (Scotland) Act 2017 (Amendment) Regulations 2017’ – the Autumn Budget Revision. The Order is a Scottish Statutory Instrument laid before the Scottish Parliament by the Scottish Government in September 2017. 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 2017, which authorises the Scottish Government’s spending plans for the financial year 2017-18.

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 £7.7 million);

ii) technical adjustments mainly in respect of Motorways and Trunk Roads and Prisons PFI (net increase to the budget of £6.3 million);

iii) Whitehall Transfers and HM Treasury allocations to the Scottish Government (£5.2 million); and

iv) the transfer of resources between Scottish Government portfolios (-£0.2m due to roundings).

In total these changes will increase Scottish Government budget by £19.0 million from £39,300.2 million to £39,319.2 million.

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

Funding Changes

5. Two changes have been made in this Revision, the first is to allocate £10m to the Economy, Jobs and Fair Work portfolio in respect of the Scottish Growth Fund offset by a second transfer of funding from the Coastal Communities Fund of -£2.3m, giving net additional funding of £7.7m.

Technical Adjustments

6. The non-cash budgets for Motorways and Trunk Roads and Prisons have been increased by £5 million and £4.9m respectively to align the budget with accounting requirements. -£1m has been transferred to Judicial salaries which sit outside Scottish Parliamentary budgets. A -£2m transfer of non-cash budget from NRS to Historic Environment Scotland shows as a reduction as only NDPB cash grant-in-aid is included in Scottish Budgets (see paragraph 12). Finally, a couple of minor adjustments are made to allow bodies to access cash reserves (£-0.6m).

Transfers

7. There are 2 Whitehall Transfer recognised as part of the Autumn Budget Revision. A budget transfer of £5.1 million from HM Treasury in respect of Coastal Communities and a £0.1m transfer for the Edinburgh Cultural Summit.

8. 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 (£55.0 million);
• transfer from Health & Sport to Education & Skills in respect of clinical academics and senior clinical GPs (£6.6 million);
• transfer from Rural Economy and Connectivity to Economy, Jobs and Fair Work for Food and Drink Industry team (£5.2 million);
• transfer from to Rural Economy and Connectivity to Environment for Peatland Restoration Programme (£6.1 million); and
• transfer from Rural Economy and Connectivity to the Forestry Commission for the Strategic Timber Transport Scheme (£5.0 million).

Format of Supporting Document

9. 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.

10. The summary tables on pages 4 to 9 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. Tables 1.5 and 1.6 provide a reconciliation between the resource budgets and the cash authorisations. Tables 1.7 (a) and (b) are new and 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.

11. 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.

12. 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, 2017-18

Process for the Budget Revision

13. 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.