Scotland’s Public Spending Outpaces UK Average, GERS Report Shows

Scotland continues to benefit from higher public spending compared to the rest of the United Kingdom, according to the latest Government Expenditure and Revenue (GERS) figures for the fiscal year 2024-25. The assessment indicates that Scots receive an additional £2,669 per capita in public services than the UK average. Despite this financial advantage, the report highlights a concerning trend: Scotland’s public finances are weakening, with expenditure growing faster than revenue.

The GERS report, published annually by economists at the Scottish Government, aims to inform the public about fiscal dynamics in Scotland. It has frequently been utilized by both pro-UK and pro-independence advocates to support their positions on Scotland’s constitutional future. In the last fiscal year, Scotland generated £91.4 billion in tax receipts, while public spending reached £117.6 billion, representing 8 percent of UK revenue and 9 percent of total spending.

Deficit and Economic Implications

According to the report, Scotland’s notional deficit, or net fiscal balance, has increased to approximately £26.5 billion, or 11.7 percent of GDP. This figure is significantly higher than the UK’s overall deficit of 5.1 percent of GDP, marking a rise of £5.1 billion from the previous year.

Ian Murray, the Scottish Secretary, commented on the findings, stating that they underscore the economic strength of the UK and the advantages Scotland gains from this financial arrangement. He asserted, “These figures underline the collective economic strength of the United Kingdom and how Scotland benefits from the redistribution of wealth inside the UK.” Murray argued that full fiscal autonomy for Scotland, a goal of the Scottish National Party (SNP), could lead to “turbo-charged austerity,” jeopardizing public services.

He emphasized that the current system allows for critical funding in areas such as education, healthcare, and policing, contingent upon decisions made by the Scottish Parliament. “People in Scotland will rightly expect to see better outcomes,” he added, advocating for continued support of shared resources across the UK.

Reactions from the Scottish Government

Responding to the GERS report, Shona Robison, the SNP Finance Secretary, highlighted the growth of devolved revenues, which have outpaced devolved expenditure for four consecutive years. She noted, “Scotland’s public finances are better than many other parts of the UK, with the third highest revenue per person in the UK, behind only London and the South East.”

Robison also addressed challenges stemming from Scotland’s exit from the European Union, stating that the departure has impacted revenues by £2.3 billion. Additionally, she pointed to the rising costs associated with UK Government debt, which contribute an extra £500 million to the deficit.

She acknowledged the difficulties posed by declining oil prices and a reduction in extraction but affirmed the Scottish Government’s commitment to a just transition for the oil and gas sector, aligning with climate change objectives and energy security.

As the debate over fiscal autonomy continues, the GERS report serves as a critical reference point, illustrating both the benefits and challenges facing Scotland’s economy within the broader context of the United Kingdom. The ongoing discussion will likely influence future policy decisions and the direction of Scotland’s financial governance.