Explainers

Funding for the Scottish Budget

The Scottish Budget has become more complex since tax and social security powers were devolved to the Scottish Parliament in the 2012 and 2016 Scotland Acts.

Funding comes from different sources, each with distinct arrangements. These include revenue from Scottish taxes, funding from the UK Government and borrowing by the Scottish Government. These funding arrangements were agreed between the Scottish and UK Governments and are set out in the UK Government’s Statement of Funding Policy and the Fiscal Framework Agreement.

Our role includes presenting a picture of the overall Scottish Budget – how much funding has come from each source and whether the Budget has moved up or down between years. We use this to put our tax and social security forecasts in context and to assess the reasonableness of the Scottish Government’s borrowing plans.