Government Expenditure and Revenue Scotland: 2017-2018
Government Expenditure and Revenue Scotland (GERS) is a National Statistics publication. It estimates the contribution of revenue raised in Scotland toward the goods and services provided for the benefit of Scotland.
Preface
This report is the twenty-fifth in the series of official published estimates of expenditure and revenue balances of the public sector in Scotland.
GERS is classified as National Statistics and produced in accordance with the principles of the Code of Practice for Official Statistics. More information about National Statistics, including the latest assessment report on GERS (number 274), is available on the UK Statistics Authority website. [2]
As there are no methodological changes in this year’s publication, there has been no public consultation on the GERS publication. However, Scottish Government statisticians are currently consulting on a potential new publication on devolved finances in Scotland. This would be additional to the information provided in GERS. Further information is available at the link below: https://www.gov.scot/Topics/Statistics/Browse/Economy/GERS/DevPFSCons18
Feedback from users of the publication is welcome. A correspondence address is available in the back leaf of the publication. Comments can be emailed to: economic.statistics@gov.scot
Recent Statistical Classification Decisions
On 16 November 2017, the ONS announced that registered providers of social housing in England had been reclassified to the private sector, following the passing of The Regulation of Social Housing (Influence of Local Authorities) (England) Regulations 2017. The reclassification was effective immediately, and means that there is a fall in UK public sector revenue (through public corporation gross operating surplus) and capital expenditure in 2017-18, which should be borne in mind when making comparisons between Scotland and the UK in this year.
In Scotland, the Housing (Amendment) (Scotland) Act received royal assent on 6 th July 2018. Changes to regulations governing the influence of Local Authorities will be laid before Parliament in September, with the intention that this will lead to the ONS reclassifying registered social landlords in Scotland back to the private sector.
What Questions Does GERS Address?
GERS addresses three questions about Scotland’s public sector accounts for a given year:
1. What revenues were raised in Scotland?
2. How much did the country pay for the public services that were consumed?
3. To what extent did the revenues raised cover the costs of these public services?
Revenue
Public sector revenue is estimated where a financial burden is imposed on residents and enterprises in Scotland.
In general, the way in which revenue is collected means that separate figures for each country and region of the UK are not available for most revenues. As a result, Scottish public sector revenue is estimated by considering each revenue stream separately. Where Scottish data are unavailable, GERS estimates revenue using a set of apportionment methodologies, refined over a number of years following consultation with and feedback from users. The methodology note on the GERS website provides a detailed discussion of the methodologies and datasets used. [3]
Expenditure
Public sector expenditure is estimated on the basis of spending incurred for the benefit of residents of Scotland. That is, a particular public sector expenditure is apportioned to a region if the benefit of the expenditure is thought to accrue to residents of that region.
This is a different measure from total public expenditure in Scotland. For most expenditure, spending for or in Scotland will be similar. For example, the vast majority of health expenditure by NHS Scotland occurs in Scotland and is for patients resident in Scotland. Therefore, the in and for approaches should yield virtually identical assessments of expenditure. However, for expenditure where the final impact is more widespread, such as defence, an assessment of ‘who benefits’ depends upon the nature of the benefit being assessed. Where there are differences between the for and in approaches, GERS estimates Scottish expenditure using a set of apportionment methodologies, refined over a number of years following consultation with and feedback from users.
The for approach considers the location of the recipients of services or transfers that public sector expenditure finances, irrespective of where the expenditure takes place. For example, with respect to defence expenditure, as the service provided is a national ‘public good’, the for methodology operates on the premise that the entire UK population benefits from the provision of a national defence service. Accordingly, under the for methodology, national defence expenditure is apportioned across the UK on a population basis.
Estimates of spending in Scotland are used in some Scottish Government publications, such as the Quarterly National Accounts. However, these do not provide a complete measure of spending, as some types of spending, such as welfare spending, are not reported. The Scottish Government is currently reviewing the potential to provide users with estimates of spending in Scotland, and information on how this would differ from spending for Scotland.
The Data Sources
The source of the revenue data in GERS is ONS’s Public Sector Finances, which provides disaggregated figures relating to UK public sector revenue. [4]
The primary data sources used to estimate Scottish public sector expenditure in GERS are Scottish Government accounting data, and HM Treasury’s Public Expenditure Statistical Analyses [5] and the supporting Country and Regional Analysis ( CRA). [6]
GERS also makes use of the estimates of Scottish Gross Domestic Product ( GDP) in current market prices published in the Quarterly National Accounts Scotland ( QNAS). [7]
Additional Information on the GERS Website
The GERS website contains a number of additional analyses of Scotland’s public sector finances. In addition to containing copies of the GERS report from 1990-91 onwards, the website also contains the tables underpinning this edition of GERS in Excel format and statistics providing a consistent time series of Scotland’s public sector finances from 1998-99 to 2017-18.
The GERS website can be accessed via http://www.gov.scot/gers.
Comparisons to other countries and regions of the UK
Comparisons of Scottish revenue and expenditure with other parts of the UK are no longer included in GERS, as due to the earlier publication timetable data are not available to produce figures for 2017-18 for each country and region of the UK. Users who are interested in these comparisons are advised to use the Country and Regional Public Sector Finances publication published by the ONS. A comparison between the ONS and GERS figures for Scotland is provided in Box 1.2.
International comparisons
The Scotland figures in the main tables in GERS are produced to be comparable to the UK figures presented in the ONS Public Sector Finances and the OBR Economic and Fiscal Outlook. These report for the public sector as a whole on a financial year basis. In contrast, international organizations such as the European Commission and the International Monetary Fund ( IMF) report countries’ finances on a calendar year basis and for the government sector only. Figures for Scotland on this basis are available in Table A.4.
Contact
Email: economic.statistics@gov.scot
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