Autumn budget 2019-2020: supporting document

Introduction

1. This booklet provides information for the Parliament and others in support of the 'Budget (Scotland) Act 2019 (Amendment) Regulations 2019' – the Autumn Budget Revision. The Order is a Scottish Statutory Instrument laid before the Scottish Parliament by the Scottish Government in September 2019. The booklet itself has no statutory force – it is produced as an aid to understanding the Order.

2. The purpose of the Autumn Budget Revision is to amend the Budget (Scotland) Act 2019, which authorises the Scottish Government's spending plans for the financial year 2019-20.

3. The main changes to the Scottish Government's spending plans, as set out in the supporting document to the Budget Bill, are explained below:

i) funding changes to reflect deployment of available resources to portfolios (total net increase to the budget of £497.1 million);

ii) technical adjustments (net increase to the budget of £26.9 million);

iii) Whitehall Transfers and HM Treasury allocations to the Scottish Government (£13.1 million); and

iv) the transfer of resources between Scottish Government portfolios (-£0.2 million due to roundings).

In total these changes will increase the Scottish Government budget by £536.9 million from £42,557.9 million to £43,094.8 million.

4. The purpose of the Autumn Budget Revision is to seek Parliamentary approval for these changes.

Funding Changes

5. Four changes have been made in this Revision, the first is to allocate £330.1 million, £269.9 million of which was received in specific consequentials from HM Treasury, to cover most of the costs incurred by public bodies as a result of the increase to employer pensions contributions from April 2019. The second is to allocate £141.0 million to Local Government for funding the Teachers pay settlement. The third is to allocate £17.0 million of Financial Transactions to the Transport, Infrastructure and Connectivity portfolio for the Low Carbon Transport Loan Fund and £9.0 million is allocated to the Environment, climate Change and Land Reform portfolio for Peatlands, giving total additional funding of £497.1 million.

Technical Adjustments

6. Technical adjustments have been made to correct the presentation of the Scottish Water and Motorways and Trunk Roads PPP/PFI budgets and to allocate additional non cash cover to the Rural Economy budget These are non-cash adjustments and none of these changes have any affect on the Scottish Government's discretionary expenditure (£26.9 million).

Transfers

7. There are seven Whitehall Transfers recognised as part of the Autumn Budget Revision. Machinery of Government transfers of £3.9 million from Money Advice Service and £2.1 million from Department for Work and Pensions for Surestart Maternity Grant following devolution of functions. £0.5 million from the Department for Work and Pensions for the Single Gateway Project, £0.3 million from BEIS in respect of GovTech Catalyst funding, two transfers from the Cabinet Office for of £1.3 million and £0.2 million Cyber Security and £4.8 million from DEFRA for Forestry Commission UK Cross-Border Functions.

8. 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 Education & Skills to Local Government for school counselling and integration (£120 million);
• transfer from Health & Sport to Education & Skills in respect of nursing and midwifery education (£60.0 million);
• transfers from Social Security & Older People to the Communities & Local Government for Bedroom Tax (£64.4 million);
• transfer from Social Security & Older People to the Communities & Local Government for delivery of the Scottish Welfare Fund (£37.9 million);
• transfer from Finance, Economy & Fair Work to the Communities & Local Government for the Winchburgh development (£8.5 million) ); and
• transfer from Health & Sport to Education & Skills in respect of Clinical Academic and Senior Academic GP salaries (£6.0m).

Format of Supporting Document

9. The Scottish Government continues to discuss with the Finance and Constitution Committee and others how it can improve the presentation and usefulness of supporting information.

10. The summary tables on pages 4 to 9 set out the changes sought in the Order at portfolio level, and the effect of the proposed changes on the overall cash authorisations. There is a clear read across from the numbers shown on the face of the Budget Act to those in these tables, and to the revised numbers shown in the Autumn Budget Revision Order itself. Tables 1.5 and 1.6 provide a reconciliation between the resource budgets and the cash authorisations. Tables 1.7 (a) and (b) show the sources of funding that support the changes applied and the movement of available resources. Table 1.8 shows the voted Capital Spending and Net Investment for each portfolio following the ABR adjustments. It should be noted that for the remainder of the document, only spending that scores as capital in the Scottish Government's or Direct Funded Bodies' annual accounts is shown as capital.

11. The main body of the document then provides a more detailed analysis of the proposed changes on a portfolio by portfolio basis. For each portfolio and direct-funded body, it shows:

• a summary of the changes proposed for the portfolio;
• how the proposed revised portfolio budget is comprised in terms of operating and capital resources, divided into the main spending aggregates: Expenditure Limit, UK Funded AME (Annually Managed Expenditure) and Other spending to show TME (Total Managed Expenditure) in respect of the Scottish Budget;
• details of the proposed major changes; and
• details of the proposed revised budgets disaggregated to Level 3.

12. The Scottish Government's spending proposals are in the main presented to Parliament in resource terms. But to meet the requirements of the "Public Finance and Accountability (Scotland) Act 2000", Budget Bills and Revisions seek authority for the budgets of NDPBs in cash, and NDPB numbers in this supporting document are also given in cash terms. In order to allow comparison with NDPB budgets presented in other Scottish Government publications, the following table compares cash and resource budgets.

Table A – Revised NDPB Cash and Resource Budgets by Portfolio, 2019-20

Process for the Budget Revision

13. Following detailed consideration by the Subordinate Legislation and Finance Committees, the Scottish Parliament has an opportunity to vote on the Autumn Budget Revision order subject to a recommendation by the Finance and Constitution Committee.