Scottish Spending Review 2011 and Draft Budget 2012-13

Annex G Glossary

Annually Managed Expenditure ( AME)

Annually Managed Expenditure is spending that does not fall within Departmental Expenditure Limits ( DEL). AME is generally less predictable than expenditure in DEL and is not subject to multi-year limits. It is set each year and contains those elements of expenditure that are not readily predictable, for example, NHS and Teachers' pensions.

Barnett Formula

The Barnett Formula allocates to Scotland a population share of changes in comparable spending programmes in England. For comparable expenditure, Scotland gets exactly the same pounds per head increase as in England. Comparability is the extent to which services delivered by Whitehall departments correspond to services delivered by the devolved administrations. Barnett only applies to expenditure classified within Departmental Expenditure Limits - about 85 per cent of Scotland's total budget.

Budget Exchange Scheme

The HM Treasury Budget Exchange Scheme enables the Scottish Government to carry forward DEL underspends and draw down these underspends in the following year within agreed maxima.

Cash Terms

Figures expressed in cash, or nominal, terms are not adjusted for the effect of inflation (see Real Terms).

Common Agricultural Policy ( CAP)

The CAP was set up under the European Union Treaties to support agricultural production, provide a fair standard of living for farmers and make sure that food is available at reasonable prices.

Cross-border public authorities

The Scotland Act 1998 allows for cross-border public authorities to be specified by Order in Council. They are public bodies and agencies, government departments, offices or office-holders, that have functions exercisable in or as regards Scotland that do not relate to reserved matters ( GB/ UK bodies that deal only with reserved matters in Scotland cannot be cross-border public authorities). Examples include the Forestry Commission, the National Criminal Intelligence Service and the British Waterways Board.

Departmental Expenditure Limit ( DEL)

The Departmental Expenditure Limit ( DEL) forms the majority of the Scottish Government's budget. This is budget provision that the Scottish Government can plan and control over the Spending Review period. The DEL budget is presented for both resource DEL and capital DEL. Resource DEL consists of fiscal DEL and non-cash ring-fenced DEL. Non-cash ring-fenced DEL covers depreciation and impairments and does not represent spending power for the Scottish Government.

Depreciation

A depreciation charge is a non-cash item which measures the wearing out, consumption or other reduction in useful life of a non-current asset.

European Structural Funds

European Structural Funds include the European Regional Development Fund ( ERDF), the European Social Fund ( ESF), the European Agricultural Fund for Rural Development ( EAFRD) and the European Fisheries Fund ( EFF). They are used to tackle regional disparities and support regional development through actions including developing infrastructure and telecommunications, developing human resources and supporting research and development. The Scottish Government is the 'managing authority' for the Funds in Scotland.

Executive Agency

Semi-autonomous executive agencies operate within a framework set by the responsible Minister, which specifies policies, objectives and available resources. All agencies are set annual performance targets by their Minister, who in turn accounts to Parliament for the work of the agency.

Gross Domestic Product ( GDP)

The Gross Domestic Product is a measure of the total economic activity in a region. References to growth in the economy are quoting growth in GDP. It is a measure of the total amount of goods and services produced within a year in a country. In the UK, three different approaches (measuring production, income or expenditure) are used in the generation of a single GDP estimate.

Local Government

All 32 local authorities in Scotland.

Non-Departmental Public Body ( NDPB)

A body that operates independently of Ministers, although Ministers have ultimate responsibility for it. There are two main types of NDPB: executive NDPBs, which carry out administrative, regulatory, executive or commercial functions; and advisory NDPBs, which provide independent, expert advice to Ministers.

Non-Profit Distributing ( NPD) model

The Non-Profit Distributing model is a system for funding capital infrastructure projects. It is 100 per cent debt-financed, maximises value for money and allows shareholder transparency.

Prudential Regime

The prudential regime for local authority capital expenditure took full effect on 1 April 2004. It allows local authorities to make their own decisions about how much to borrow or spend, but they are under a duty to determine how much they can afford and to keep that under review.

Real Terms

Any price or value adjusted for the effect of inflation.

Scottish Futures Trust ( SFT)

The Scottish Futures Trust is the independent company established by the Scottish Government to deliver value for money across public infrastructure development.

Single Outcome Agreement ( SOA)

The Concordat between the Scottish Government and COSLA in November 2007 required each local authority and its Community Planning Partners to develop a Single Outcome Agreement. They are intended to set out outcomes at a local level, which local public bodies will work towards in order to contribute to the National Outcomes set by government. They are characterised by streamlined external scrutiny, effective performance management and an outcomes focus.

Strategic Transport Projects Review ( STPR)

The Strategic Transport Projects Review ( STPR) supports the process of prioritisation applied by Scottish Ministers when allocating the capital budget across all sectors and when determining the level of infrastructure investment that can be supported from revenue finance e.g. public private partnerships ( PPP/ PFI), non-profit distributing, and borrowing against regulated asset base ( RAB) for investment in rail infrastructure.

Total Managed Expenditure ( TME)

Total Managed Expenditure comprises the Departmental Expenditure Limit ( DEL) and Annually Managed Expenditure ( AME).