What we do
We are the independent fiscal institution for Scotland.
We produce Scotland’s official, independent economic and fiscal forecasts to accompany the Scottish Government’s Budget cycle.
The Scottish Fiscal Commission is a Non-Ministerial Office – this means we are part of the Scottish Administration but not part of the Scottish Government ensuring our operational independence.
We are directly accountable to the Scottish Parliament for the delivery of our functions which were set out in .
The Commission must produce two reports each financial year forecasting income from devolved taxes and expenditure on devolved social security benefits. Our forecasts inform the Scottish Budget and assist in the scrutiny of fiscal events. The Commission also provides an assessment of the reasonableness of the Government’s borrowing projections.
We are based in Governor’s House, Edinburgh. We buy in some administrative support services from the Scottish Government, including IT support, human resources and financial services.
Our budget for 2019-20 is £1.9 million.
We base our values on those set out by the Organisation for Economic Co-operation and Development for Independent Fiscal Institutions. These require us to be independent; transparent; accessible and open and we set out how we fulfil these commitments in our corporate plan.
The need for independent scrutiny of Scotland’s public finances was highlighted by the Smith Commission (2014) resulting from ‘the additional variability and uncertainty that further tax and spending devolution will introduce into the budgeting process’.
The Commission is part of a growing international trend to establish independent fiscal institutions to promote sound fiscal policy and sustainable public finances. The Commission was originally established as a non-statutory body in 2014 as the Scottish Government began to collect devolved taxes. On 1 April 2017 we became a statutory body and our functions expanded to reflect the additional powers devolved in the Scotland Act 2016.
We forecast Scottish Government revenue from fully and partially devolved taxes and devolved social security spending. The Commission is also required to forecast onshore Scottish GDP.
We currently produce five year forecasts of tax revenue for Scottish Non-Savings Non-Dividend Income Tax, Land and Buildings Transaction Tax, Scottish Landfill Tax, Non-Domestic Rates and Air Passenger Duty. We will also forecast Aggregates Levy.
We forecast spending for devolved social security benefits. This covers a wide range of benefits including ill health and disability benefits, carer’s benefits, Discretionary Housing Payments, Best Start Grant and Best Start Foods, Funeral Support Payments, Cold Weather Payments, Winter Fuel Payments and Employability Services.
You can find out more about these in our explainers section
We gather data throughout the year from organisations involved in devolved taxes and social security payments in Scotland. When the Scottish Government begins to set out plans for its next year’s Budget, it shares its proposed policies with us so that, using the data we’ve gathered, we can forecast how much the Government’s proposed policies are likely to raise and cost. It means that on the day the Scottish Government publishes its proposed Budget we also publish a forecast allowing Parliamentarians to properly scrutinise the Budget’s policy implications and go on to approve a final Budget ahead of the new financial year. We publish a second forecast half-way through the year to co-incide with the Scottish Government’s Medium-Term Financial Strategy.
The first forecast is published at the same time as the Scottish Government’s Budget usually in December with a second coinciding with the Scottish Government’s Medium-Term Financial Strategy.
The Commission seeks to adhere to the highest standards for analysis possible. While we do not produce official statistics (we produce forecasts), the Commission and our work voluntarily complies as much as possible with the UK Statistic Authority’s Code of Practice for Statistics. Further details can be found in our Voluntary Statement of Compliance.