Publication - Corporate report

Scotland's Fiscal Outlook: The Scottish Government's Medium-Term Financial Strategy

Published: 31 May 2022
Directorate: Tax Directorate, +2 more … Public Spending Directorate, Chief Economist Directorate
Topic: Economy, Money and tax, Scottish Budget
ISBN: 9781804354988

This is the fifth Medium-Term Financial Strategy (MTFS) published by the Scottish Government and provides the context for the Scottish Budget and the Scottish Parliament. This context will also frame the Resource Spending Review.

Supporting documents

Footnotes

1. Office for National Statistics (2022), Consumer price inflation, UK - Office for National Statistics – May 2022

2. Scottish Fiscal Commission (2022), Scotland's Economic and Fiscal Forecasts – May 2022

3. Office for Budget Responsibility (2022), Developments in the outlook for household living standards - Office for Budget Responsibility (obr.uk) - March 2022

4. Bank of England (2022), Monetary Policy Report - May 2022 | Bank of England – May 2022

5. Budget Process Review Group (2017), Final Report – June 2017

6. Scottish Government (2022), National Outcomes | National Performance Framework – May 2022

7. The figures in this chapter are the latest available as of the 18th of May, which was the cut-off point for new economic data releases.

8. Sourced from the jointly published ONS – HMRC Real Time Information Database, covering employees on the PAYE system.

9. Scottish Government (2022), Scottish Consumer Sentiment Indicator: 2022 Quarter 1 - gov.scot (www.gov.scot) - April 2022

10. Institute for Fiscal Studies (2022), Inflation hits 9% with poorest households facing even higher rates - May 2022

11. Scottish Government (2022), Scotland's National Strategy for Economic Transformation - gov.scot (www.gov.scot) - March 2022

12. Scottish Government (2021), Advisory Council for Economic Transformation - gov.scot (www.gov.scot) – July 2021

13. UK Government (2021) – Autumn Budget and Spending Review – October 2021

14. Scottish Government (2021), Fiscal Framework Factsheet – Dec 2021.

15. Scottish Fiscal Commission (2022)– Scotland's Economic and Fiscal Forecast – May 2022

16. Office for Budget Responsibility (2022), Economic and fiscal outlook - March 2022 - Office for Budget Responsibility (obr.uk) – March 2022

17. Scottish Fiscal Commission (2022), Scotland's Economic and Fiscal Forecasts –May 2022

18. Office for Budget Responsibility (2022), Economic and fiscal outlook - March 2022 - Office for Budget Responsibility (obr.uk) – March 2022

19. Scottish Government (2021), The Scottish Government's Medium Term Financial Strategy - gov.scot (www.gov.scot) – December 2021

20. Scottish Fiscal Commission (2021), Forecast Evaluation Report – July 2021

21. Scottish Fiscal Commission (2022), Scotland's Economic and Fiscal Forecasts – May 2022

22. Scottish Government (2022), Scottish Child Payment – February 2021

23. Scottish Government (2022), Public Sector Pay Policy – December 2021

24. Scottish Government (2021), Fiscal framework: factsheet - gov.scot (www.gov.scot) – December 2021

25. See paragraphs 78-82 of the Scotland Act 2012 and 2016: annual implementation report 2021

26. Scottish Government (2022) – Framework for Tax 2021 – December 2021

27. Fiscal Commission NI (2022) FCNI Final Report - More fiscal devolution for Northern Ireland? | Fiscal Commission NI –May 2022

28. The Scottish Government (2021) The Scottish Government's Medium Term Financial Strategy - gov.scot (www.gov.scot); 4. Broad spending outlook - Scotland's Fiscal Outlook: The Scottish Government's Medium-Term Financial Strategy - gov.scot (www.gov.scot) – December 2021

29. The publicly available SPI tables from HMRC show estimates of regional Income Tax revenues (including savings and dividends) which is different from Non-Savings Non-Dividend Income Tax Liabilities that is currently devolved to the Scottish Parliament. However, both are likely to be highly correlated and influenced to similar degrees by factors such as economic performance and changes in policy. Consequently, analysing historic Income Tax revenues can still prove informative for the Scottish context. The latest available SPI data covers 2010-11 to 2019-20 and can be found here.

30. UK Government (2022) Monthly and annual prices of road fuels and petroleum products - GOV.UK (www.gov.uk) – April 2022

31. Note that PAYE RTI statistics do not cover other sources of income such as from pensions, self-employment or investments.

32. The Scottish Government analysis of the RTI average pay data has been generated on a financial year basis from the monthly estimates. These results have been calculated as the total aggregate pay relative to the total number of employees for a given UK country, region or sector for each financial year.

33. IFS (2022), Top income inequality and tax policy (ifs.org.uk) – April 2022

34. IFS(2019), BN253-Characteristics-and-Incomes-Of-The-Top-1%.pdf (ifs.org.uk) – August 2019

35. IFS (2022) Return of bumper pay growth in finance fuels new rise in earnings inequality - Institute For Fiscal Studies - IFS – May 2022

36. Scottish Government (2021), Fiscal framework: factsheet - November 2021

37. See the Fiscal Framework outturn report 2019 for further background.

38. Further information can be found at the Cashback for Communities website

39. Scottish Government (2021), Fiscal framework: factsheet - gov.scot (www.gov.scot) – December 2021