Autumn Budget Revision 2023 to 2024: supporting document
Supporting document to the Budget (Scotland) Act 2023 Amendment Regulations 2023. Provides details of Level 2 and 3 budgets.
Technical Adjustments
16. The Autumn Budget Revision records net technical changes of £188 million. The vast majority of these changes (£183 million) relate to the ongoing implementation of International Financial Reporting Standard 16 (‘IFRS 16’) which has resulted in a significant alteration of the accounting treatment for leases, with budgets now adjusted to align with that treatment. We are currently in the second of a three year transition period with budget applied in-year to reflect the changes.
17. These changes provide additional capital and non-cash budget cover to be applied for existing and new assets acquired under lease arrangements, to allow for their reclassification and subsequent depreciation. There are also changes to the resource budget position to adjust for the elements of the rental costs that are now capitalised.
18. Ring-fenced budget cover is being provided by HM Treasury to support this change in accounting treatment and the Scottish Government’s net discretionary funding will not be impacted by these changes subject to agreement with HM Treasury. Final IFRS16 budget cover requirements will be provided to Treasury ahead of the UK Supplementary Estimates exercise.
19. Excluding IFRS16 the largest technical adjustment is in respect of a pre-payment for the sleeper service (£5 million).
Whitehall transfers
20. There are 5 specific Whitehall transfers and allocations from HM Treasury recognised at the Autumn Budget Revision. The net positive impact on the Scottish Budget is £13.1 million.
21. The largest of the Whitehall transfers is the £5.795 million being provided to the Social Justice portfolio for the Debt Advice Levy. This will be used to fund essential debt advice services provided by a range of organisations across Scotland as per the requirements of HM Treasury.
22. The Education and Skills portfolio is receiving two Whitehall transfers totalling £5.8 million. £5.6 million of this funding is for the Ukraine Education Tariff. These amounts are passed on to Local Authorities for the costs of providing childcare and educational support to Ukrainian children and young people aged 2 to 18 who have entered the UK via the Resettlement Scheme. A further £0.2 million is provided for the National Cyber Security CyberFirst Programme.
23. The Justice portfolio will receive £1.3 million of UK Cyber Security Funding to fund various cyber-crime prevention projects, while the Deputy First Minister and Finance portfolio will receive £0.1 million for Hidden Economy Conditionality. This is HMRC's strategy for tackling the hidden economy - taxis, private hire vehicles and scrap metal dealers - by making licence renewals conditional on tax checks.
| Scottish Government Portfolios | Changes Proposed | Total Technical changes | ||
|---|---|---|---|---|
| Whitehall | IFRS16 | Other Technical | ||
| £m | £m | £m | £m | |
| NHS Recovery, Health and Social Care | 0.0 | 164.0 | 0.0 | 164.0 |
| Social Justice | 5.8 | (0.5) | 0.0 | 5.3 |
| Wellbeing Economy, Fair Work and Energy | 0.0 | (0.8) | 0.0 | (0.8) |
| Education and Skills | 5.8 | (0.4) | 0.0 | 5.4 |
| Justice and Home Affairs | 1.3 | (0.4) | 0.0 | 1.0 |
| Transport, Net Zero and Just Transition | 0.0 | (0.6) | 5.0 | 4.4 |
| Rural Affairs, Land Reform and Islands | 0.0 | (0.4) | 0.0 | (0.4) |
| Constitution, External Affairs and Culture | 0.0 | 0.0 | 0.0 | 0.0 |
| Deputy First Minister and Finance | 0.1 | 8.8 | 0.0 | 8.9 |
| Crown Office and Procurator Fiscal Service | 0.0 | 2.1 | 0.0 | 2.1 |
| Scottish Government | 13.1 | 171.7 | 5.0 | 189.8 |
| Scottish Housing Regulator | 0.0 | 0.7 | 0.0 | 0.7 |
| National Records of Scotland | 0.0 | 0.1 | 0.0 | 0.1 |
| Office of the Scottish Charity Regulator | 0.0 | 0.0 | 0.0 | 0.0 |
| Scottish Courts and Tribunals Service | 0.0 | 3.9 | 0.0 | 3.9 |
| Scottish Fiscal Commission | 0.0 | (0.1) | 0.0 | (0.1) |
| Revenue Scotland | 0.0 | 0.0 | 0.0 | 0.0 |
| Registers of Scotland | 0.0 | 0.6 | 0.0 | 0.6 |
| Environmental Standards Scotland | 0.0 | 0.0 | 0.0 | 0.0 |
| Food Standards Scotland | 0.0 | 0.0 | 0.0 | 0.0 |
| Consumer Scotland | 0.0 | 0.0 | 0.0 | 0.0 |
| Scottish Teachers’ and NHS Pension Schemes | 0.0 | 0.0 | 0.0 | 0.0 |
| Scottish Administration | 13.1 | 176.9 | 5.0 | 195 |
| Direct-Funded Bodies | ||||
| Scottish Parliamentary Corporate Body | 0.0 | 0.0 | 0.0 | 0.0 |
| Audit Scotland | 0.0 | 6.3 | 0.0 | 6.3 |
| Total Scottish Budget | 13.1 | 183.2 | 5.0 | 201.3 |
Internal Transfers
24. 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 fund service delivery in one portfolio where the policy responsibility rests with another, or 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 NHS Recovery, Health & Social Care to Local Government within the Deputy First Minister and Finance portfolio including funding for the Real Living Wage for staff providing direct Adult Social Care in commissioned services in the third and independent sectors (£333.5 million).
- Transfer from NHS Recovery, Health & Social Care to Local Government within the Deputy First Minister and Finance portfolio to support the investment in integration of Health Social Care (£257.2 million).
- Transfer from NHS Recovery, Health & Social Care to Local Government within the Deputy First Minister and Finance portfolio to provide funding to increase the capacity of care at home (£124 million).
- Transfer from NHS Recovery, Health & Social Care to Local Government within the Deputy First Minister and Finance portfolio to ensure delivery of the commitments set out in the Mental Health Transition and Recovery Plan (£120 million).
- Transfer from Education & Skills to Local Government within the Deputy First Minister and Finance portfolio to fund additional Teachers and Support Staff (£100 million).
- Transfer from NHS Recovery, Health & Social Care to Local Government within the Deputy First Minister and Finance portfolio to provide funding for the implementation of the Carers Act (£60.4 million).
- Transfer from NHS Recovery, Health & Social Care to Education and Skills portfolio to pay teaching grant for Nursery and Midwifery students (£57.8 million).
- Transfer from Social Justice to Local Government within the Deputy First Minister and Finance portfolio to distribute Discretionary Housing Payments (£55.7 million).
- Transfer from NHS Recovery, Health & Social Care to Local Government within the Deputy First Minister and Finance portfolio to provide Free Personal and Nursing Care to care home residents (£42.3 million).
- Transfer from Education & Skills to Local Government within the Deputy First Minister and Finance portfolio to provide funding for the delivery of the Whole Family Wellbeing Fund (£32 million).
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