Government Expenditure and Revenue Scotland 2022-23

Annex B: Revisions

This section presents revisions from the previous GERS 2021-22 publication.

Revisions to Non-North Sea Revenue Estimates from GERS 2021-22

Table B.1 summarises the revisions in this edition of GERS to total non-North Sea revenue. Revisions to Scottish estimates can stem from three sources: revisions to UK totals; revisions to apportionment data; and updated apportionment methodologies. Revisions to UK totals will reflect greater uncertainty to the provisional 2021-22 figures due to the coronavirus pandemic.

There are a number of revisions to UK revenue totals from GERS 2021-22, with overall UK revenue for 2021-22 revised by 0.4%. The main revisions relate to income tax, corporation tax, non-domestic rates, reserved stamped duties, and other receipts. In general, revenue in 2021-22 continued to have been affected by the pandemic, which is likely to have resulted in larger than usual revisions.

Further detail on all these revisions is available from the UK Public Sector Finances.^[30]

Table B.1: Revision to Estimates of Total Non-North Sea Revenue

	2019-20	2020-21	2021-22
Scotland
Estimates published in GERS 2021-22	65,225	61,900	70,311
Estimates published in GERS 2022-23	65,339	61,670	70,035
Revision (£m)	114	-229	-276
UK
Estimates published in GERS 2021-22	828,679	794,210	913,339
Estimates published in GERS 2022-23	826,024	792,980	916,648
Revision (£m)	-2,655	-1,230	3,309
Scotland/UK ratio
Estimates published in GERS 2021-22	8.0%	7.9%	8.1%
Estimates published in GERS 2022-23	8.0%	7.9%	7.9%
Revision (% point)	0.0%	0.0%	-0.2%

Scottish revisions broadly reflect these UK revisions, the main differences relating to national insurance contributions and onshore corporation tax, where the latest outturn data has resulted in a larger downward revision to Scottish revenue.

Table B.2: Revision to Estimates of Public Sector Revenue: Scotland and UK 2021-22

	£ million		%
	Scotland	UK	Scotland	UK
Income tax	-181	-2,888	-1.2%	-1.3%
National insurance contributions	-131	101	-1.1%	0.1%
Value added tax	-43	921	-0.4%	0.6%
Corporation tax (excluding North Sea)	205	6,297	5.3%	10.1%
Fuel duties	200	0	9.7%	0.0%
Non-domestic rates	0	1,029	0.0%	4.2%
Council tax	-7	372	-0.3%	0.9%
VAT refunds	188	816	9.6%	3.7%
Capital gains tax	-74	353	-10.9%	2.4%
Inheritance tax	2	-3	0.8%	0.0%
Reserved stamp duties	4	-1,890	1.3%	-9.1%
Scottish Land & Buildings transaction tax	-12	-12	-1.5%	-1.5%
Scottish landfill tax	-4	-4	-2.8%	-2.8%
Air passenger duty	-1	0	-1.0%	0.0%
Tobacco duties	-120	0	-9.3%	0.0%
Alcohol duties	-3	-27	-0.2%	-0.2%
Insurance premium tax	7	-15	1.5%	-0.2%
Vehicle excise duties	1	33	0.2%	0.5%
Environmental levies	0	0	0.0%	0.0%
Other taxes	53	-181	2.1%	-0.6%
Total Non-North Sea taxes	86	4,902	0.1%	0.6%
Other Revenue
Interest and dividends	20	464	1.0%	1.9%
Gross operating surplus	-134	-819	-1.9%	-1.3%
Other receipts	-248	-1,238	-57.9%	-37.4%
Total non-North Sea revenue	-276	3,309	-0.4%	0.4%

A time series of revisions is available in the accompanying spreadsheets online.

Revisions to North Sea Revenue Estimates from GERS 2021-22

Table B.3 summarises the revisions to North Sea revenues in this edition of GERS by comparing the estimates contained in this report with last year’s publication. Revenue has been revised down in 2021-22, reflecting both a downward revision to the UK total but also a downward revision to the Scottish share. Last year, we anticipated that rising energy prices would see the share of corporation tax raised in Scottish waters fall from 118% to 100%. It is now estimated that it fell to 88%. Estimates for previous years are largely unrevised.

Table B.3: Revisions to North Sea Revenue: 2019-20 to 2021-22

	£ million
	2019-20	2020-21	2021-22
Scotland (illustrative geographical share)
Estimates published in GERS 2021-22	833	765	3,464
Estimates published in GERS 2022-23	825	752	2,446
Revision	-8	-13	-1,018
UK
Estimates published in GERS 2021-22	643	522	3,214
Estimates published in GERS 2022-23	643	522	2,662
Revision	0	0	-552

Revisions to Expenditure Estimates from GERS 2021-22

Table B.4 sets out the changes in estimates of public expenditure in Scotland and the UK between this report and GERS 2021-22. These reflect revisions to Scottish Government and Scottish local government spending data, revisions to UK spending totals, and revisions to the data sources used to apportion expenditure to Scotland. Revisions to public expenditure that can be traced to changes to the total expenditure on services (TES) measure are specified separately.

The main revisions to spending relate to the coronavirus business support grants and Other UK Government Health spending. Business support grants were included in accounting adjustments in last year’s publication, but this year are shown against Enterprise and Economic Development spending. This results in a downward revision to accounting adjustments (Other UK Government) and an upward revision of £740 million to Scottish Government spend on Enterprise and Economic Development.

Other UK Government spending on health has been revised up by £701 million. This reflects spending associated with NHS Test and Trace, were Scotland is allocated a population share in the Country and Regional Analysis. At the time of last year’s publication, it was challenging to identify how much Department of Health and Social Care was associated with such schemes. We will continue to review the amount of Department of Health and Social Care spending is allocated to Scotland in future years.

Table B.4: Revisions to Estimates of Total Expenditure: 2019-20 to 2021-22

	£ million
	2019-20	2020-21	2021-22
Scotland
Estimates published in GERS 2021-22	81,960	98,439	97,502
Estimates published in GERS 2022-23	82,775	100,275	97,380
Revision	816	1,836	-122
UK
Estimates published in GERS 2021-22	884,119	1,104,299	1,060,301
Estimates published in GERS 2022-23	888,650	1,106,729	1,041,465
Revision	4,531	2,430	-18,836
Scotland/UK Ratio
Estimates published in GERS 2021-22	9.3%	8.9%	9.2%
Estimates published in GERS 2022-23	9.3%	9.1%	9.4%
Revision (% point)	0.0%	0.1%	0.2%

The table below shows the revisions to spend in 2021-22 by function, and by Scottish Government, Scottish local government, Scottish public corporations, and Other UK government bodies. Overall, Scottish spend in 2021-22 has been revised down by £122 million, primarily due to revisions to accounting adjustments.

Table B.5: Revisions to Estimates of Public Sector Expenditure: Scotland and UK 2021-22

	£ million
	Scotland					UK
	SG	LG	PC	Other UKG Bodies	Total
General public services
Public and common services	6	-174	0	76	-91	453
International services	0	0	0	25	25	273
Public sector interest expenditure	0	0	0	-355	-355	1,667
Defence	0	0	0	16	16	58
Public order and safety	3	0	0	-166	-163	-2,525
Economic affairs
Enterprise and economic development	740	-11	0	-5	724	3,092
Science and technology	0	0	0	-156	-156	-774
Employment policies	0	0	0	11	11	0
Agriculture, forestry and fisheries	0	-13	1	52	40	-388
Transport	5	-64	21	168	130	-546
Environment protection	-1	-61	0	5	-57	-119
Housing and community amenities	0	-105	-62	0	-167	-41
Health	0	0	0	701	701	-548
Recreation, culture and religion	-1	25	0	35	59	128
Education and training	2	662	0	-2	662	-123
Social protection	-52	-200	0	547	295	1,348
EU Transactions	0	0	0	-7	-7	-175
Accounting adjustments	-52	0	118	-1,855	-1,789	-20,617
Total revision	650	59	78	-910	-122	-18,836

Notes: SG: Scottish Government. LG: Local Government. PC: Public Corporations. UKG: UK Government.

Revisions to Estimates of Capital Consumption

Table B.6 sets out the changes to estimates of capital consumption in Scotland and the UK between this report and the previous publication of GERS. Capital consumption, which represents the capital stock consumed to provide services within the year, is included alongside current expenditure when calculating the current budget balance. It does not affect the estimate of the net fiscal balance. Note that these figures do not match the figures for capital consumption shown in Table A.8, as the table below includes capital consumption associated with public corporations, whimatch is not included in accounting adjustments.

Table B.6: Revisions to capital consumption: 2019-20 to 2021-22

	£ million
	2019-20	2020-21	2021-22
Scotland
Estimates published in GERS 2021-22	6,164	5,783	5,499
Estimates published in GERS 2022-23	5,952	5,641	5,443
Revision	-212	-142	-56

In general, capital consumption in all years has been revised down in all years, reflecting updated data from the ONS.

Unlike for public corporations’ expenditure and operating surplus, detailed capital consumption data are not available on a public corporation basis from the ONS, as they are not separately identified within its perpetual inventory model.

Revisions to Fiscal Aggregates

Table B.7 shows revisions to the current budget balance from the previous publication of GERS. The Scottish current budget deficit has increased in all years. This reflects the revisions to public sector interest expenditure discussed above.

Table B.7: Revisions to Estimates of the Current Budget Balance: 2019-20 to 2021-22

	£ million
	2019-20	2020-21	2021-22
Estimates published in GERS 2021-22
Excluding North Sea revenue	-13,854	-31,435	-20,816
Population share of North Sea revenue	-13,802	-31,392	-20,554
Geographical share of North Sea revenue	-13,021	-30,670	-17,352
UK	-12,796	-238,047	-80,036
Estimates published in GERS 2022-23
Excluding North Sea revenue	-14,307	-33,203	-22,220
Population share of North Sea revenue	-14,255	-33,160	-22,002
Geographical share of North Sea revenue	-13,483	-32,451	-19,774
UK	-19,259	-241,257	-73,569
Difference (£ million) (positive shows improvement)
Excluding North Sea revenue	-453	-1,768	-1,404
Population share of North Sea revenue	-453	-1,768	-1,448
Geographical share of North Sea revenue	-461	-1,781	-2,422
UK	-6,463	-3,210	6,467

Table B.8 shows revisions to the net fiscal balance from the previous publication of GERS. In general, these are similar to the revisions to the current budget balance for Scotland

Table B.8: Revisions to Estimates of the Net Fiscal Balance: 2019-20 to 2021‑22

	£ million
	2019-20	2020-21	2021-22
Estimates published in GERS 2021-22
Excluding North Sea revenue	-16,735	-36,539	-27,191
Population share of North Sea revenue	-16,682	-36,497	-26,929
Geographical share of North Sea revenue	-15,902	-35,774	-23,727
UK	-54,797	-309,567	-143,748
Estimates published in GERS 2022-23
Excluding North Sea revenue	-17,437	-38,605	-27,345
Population share of North Sea revenue	-17,384	-38,562	-27,127
Geographical share of North Sea revenue	-16,612	-37,853	-24,899
UK	-61,983	-313,227	-122,155
Difference (£ million) (positive shows improvement)
Excluding North Sea revenue	-702	-2,066	-154
Population share of North Sea revenue	-702	-2,066	-198
Geographical share of North Sea revenue	-710	-2,079	-1,172
UK	-7,186	-3,660	21,593

In addition to revisions to the fiscal aggregates in cash terms, there are also changes to the fiscal aggregates expressed as a share of GDP due to revisions to GDP estimates. These are shown in Tables B.9 and B.10 for the current budget balance and the net fiscal balance respectively. In general, estimates of the fiscal aggregate have improved as a share of GDP for Scotland when including the North Sea, but worsened when the North Sea is excluded. These revisions reflect the downward revision to the nominal value of onshore GDP, and upward revision to the nominal value of offshore GDP, made in the Quarterly National Accounts Scotland for 2022Q3. This reflects routine annual update to bring the value of GVA in line with the latest UK regional accounts.

Table B.9: Impact of Revisions to GDP on Estimates of the Current Budget Balance: 2019-20 to 2021-22

	% GDP
	2019-20	2020-21	2021-22
Estimates published in GERS 2021-22
Excluding North Sea revenue	-7.2%	-19.4%	-9.0%
Population share of North Sea revenue	-8.2%	-20.6%	-11.7%
Geographical share of North Sea revenue	-8.3%	-20.7%	-12.0%
UK	-0.6%	-11.1%	-3.4%
GERS 2021-22 estimate with latest GDP	% GDP
Excluding North Sea revenue	-8.3%	-20.6%	-11.9%
Population share of North Sea revenue	-8.2%	-20.5%	-11.7%
Geographical share of North Sea revenue	-7.1%	-18.9%	-8.9%
UK	-0.6%	-11.4%	-3.4%
Change (positive shows improvement)	% point difference
Excluding North Sea revenue	-1.1%	-1.2%	-2.9%
Population share of North Sea revenue	0.0%	0.1%	0.0%
Geographical share of North Sea revenue	1.2%	1.7%	3.1%
UK	0.0%	-0.3%	-0.1%

Table B.10: Impact of Revisions to GDP on Estimates of the Net Fiscal Balance: 2019-20 to 2021-22

	% GDP
	2019-20	2020-21	2021-22
Estimates published in GERS 2021-22
Excluding North Sea revenue	-8.8%	-22.7%	-12.3%
Population share of North Sea revenue	-9.9%	-23.9%	-15.3%
Geographical share of North Sea revenue	-10.1%	-24.1%	-15.7%
UK	-2.4%	-14.5%	-6.1%
GERS 2021-22 estimate with latest GDP	% GDP
Excluding North Sea revenue	-10.0%	-24.0%	-15.6%
Population share of North Sea revenue	-9.9%	-23.8%	-15.3%
Geographical share of North Sea revenue	-8.7%	-22.1%	-12.2%
UK	-2.4%	-14.8%	-6.1%
Change (positive shows improvement)	% point difference
Excluding North Sea revenue	-1.2%	-1.3%	-3.3%
Population share of North Sea revenue	0.1%	0.1%	0.0%
Geographical share of North Sea revenue	1.4%	2.0%	3.4%
UK	0.0%	-0.4%	-0.1%