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Publication - Factsheet

Fiscal framework: factsheet

Last updated
11 July 2024 - see all updates
Topic
Money and tax, Public sector

Detailed information about the fiscal framework agreed between the Scottish and UK Governments.

Scotland Reserve

The Scotland Act 2016 replaced a previous power under the Scotland Act 2012 (to operate a limited cash reserve) and the HMT rules on the Budget Exchange Mechanism with a new Scotland Reserve. This allows the us to build up funds when devolved revenues are higher than forecast, smooth all types of spending (including carrying-forward underspends), assist the management of tax volatility and determine the timing of expenditure. The Scotland Reserve applied from 2017-18 onwards and is split between resource and capital.

As of 2023 to 2024 and the conclusion of the review of the fiscal framework, the Reserve is capped at £700 million in 2023 to 2024 prices, (meaning these limits will be uprated annually from 2024 to 2025 using the OBR's GDP deflator forecast at the time of our draft Budget). In addition, the previous drawdown limits of £250 million for resource and £100 million for capital have been removed.

Updates on the balance of the Scotland Reserve are published at the following times of the year:

  • Spring Budget Revision (February)
  • Provisional Outturn Statement (June)
  • Fiscal framework Outturn Report (September)

We also report at each budget what funding it intends to draw down from the Reserve to underpin the forthcoming year’s spending plans.

Contact

Email: ceu@gov.scot

First published
20 November 2017
Last updated
11 July 2024 - show all updates

  1. Information added to the updates page.

  2. Multiple pages updated.

  3. Multiple pages updated.

  4. Publications page updated with text and link to statement.

  5. Publications page updated with text and link to statement.

  6. Minor update to amend link to annex 'B' in Scottish Government’s Medium Term Financial Strategy.

  7. Added link to the Scottish Government’s Medium Term Financial Strategy.

  8. Added link to letter to the Chief Secretary to the Treasury regarding agreement in principle to commission an independent report on the Block Grant Adjustment arrangements on publications page.

  9. Added link to 22 July letter about the income tax reconciliation process and the provisional 2019-20 income tax reconciliation.

  10. Added link to 15 March letter about the BGAs for the Scottish Budget 2021-2022 on publications page.

  11. Updated following the Scottish Budget 2021-2022.

  12. Link to 23 December letter regarding fiscal powers and flexibility added to publications page.

  13. Link to 7 December letter regarding fiscal powers and flexibility added to publications page.

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