Autumn Budget Revision 2024-25 – Supporting Document

Technical Adjustments

23. The Autumn Budget Revision records net technical changes of £42.2 million. The single largest change is the £40.3 million adjustment for Scottish Water voted loans to reflect the split of capital. There is no impact on the Scottish Government’s discretionary spending as a result of this change as this budget was already included on a HM Treasury basis.

24. The balance of changes primarily relate to the ongoing implementation of International Financial Reporting Standard 16 ('IFRS16’) which has resulted in a significant alteration to the accounting treatment for leases, with budgets now adjusted to align with that treatment. We are currently in the final year of a three year transition period with budget initially applied at Budget Bill to reflect the changes but subject to in-year amendment.

25. 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.

26. 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.

Whitehall transfers

27. There are six specific Whitehall transfers and allocations from HM Treasury recognised at the Autumn Budget Revision. The net positive impact on the Scottish Budget is £18.1 million.

28. The largest of the Whitehall transfers is the £7.7 million being provided to the Ukrainian Resettlement budget in the Social Justice portfolio for Ending Homelessness Funding.

29. A further £7.3 million is 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.

30. The Transport portfolio is receiving a Whitehall transfer of £1.5 million in relation to A75 Union Connectivity Funding, while Digital Strategy in the Deputy First Minister, Economy and Gaelic portfolio will receive £1.3 million of UK Cyber Security funding for a number of cyber projects

31. The Education and Skills portfolio will receive £250k of National Cyber Security Funding in respect of the CyberFirst Programme, while the Health and Social Care portfolio will contribute £20k for the Sport Satellite Programme.

Internal Transfers

32. 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 Local Government within the Finance & Local Government portfolio to support the investment in integration of Health & Social Care (£257.2 million);
• transfer from Education & Skills to Local Government to support the recurring costs of the previous financial year’s Teachers’ Pay Awards (£242 million);
• transfer from Health & Social Care to Local Government for staff providing direct Adult Social Care (£230 million);
• transfer from Health & Social Care to Local Government to provide funding to increase the capacity of care at home (£124 million);
• transfer from Health & Social Care to Local Government to ensure delivery of the commitments set out in the Mental Health Transition and Recovery Plan (£120 million);
• transfer from Social Justice to Local Government to distribute Discretionary Housing Payments (£76.2 million);
• transfer from Health & Social Care to Local Government to provide funding for the implementation of the Carers Act (£60.5 million);
• transfer from 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 to provide the Scottish Welfare Fund (£40.1 million);
• transfer from Net Zero and Energy to Social Justice for the installation of zero emission heating systems as part of the affordable homes programme (£40 million);
• transfer from Transport to Local Government to deliver grant payments to local authorities for the provision of Cycling, Walking and Safer Routes programme (£35 million);
• transfer from Net Zero and Energy to Enterprise, Trade and Investment within the Deputy First Minister, Economy and Gaelic portfolio to allow delivery of the Offshore Wind Investment Programme (£32.9 million)
• transfer from Education & Skills to Local Government within the Finance & Local Government portfolio to provide funding for the delivery of the Whole Family Wellbeing Fund (£32 million).