New era for Scottish Budget – our latest forecast

The Scottish Fiscal Commission today emphasised the growing size and complexity of Scotland’s budget when it published its latest five year forecasts.

Two key elements of the fiscal framework, which sets out the arrangements for funding devolution to Scotland, will soon come into operation.

April 2020 will see a further £3 billion of social security payments devolved to Scotland which must be managed during the year. Spending will be determined by the number of eligible people who apply for support and the Scottish Government will have to fund this spending as it arises, even if it differs from the forecast used to set the Budget initially.

In addition Scotland’s first income tax reconciliation for 2017-18 will reduce the budget by £204 million in 2020-21 – a gap the Scottish Government plans to address by drawing on its borrowing powers.

Commission Chair, Dame Susan Rice, said:

“It’s essential these new ‘moving parts’ of the Scottish Budget are clearly explained and understood by everyone involved in the budget process.

“Monitoring and management of the budget through the course of each year will be increasingly important, with more elements being harder to predict and subject to change during the financial year.

“The Scottish Government and Parliament will need to consider how best to respond to these changes.”

The Scottish Budget has been set ahead of the UK Budget adding to the possibility that the Scottish Government’s finances will vary during the financial year.

The Commission’s economic forecasts are broadly in line with its last Budget forecasts in December 2018. Now that data for the three first quarters of the year have been published the Commission has reduced its 2019 forecast to 0.9 percent. The Commission considers that Brexit still poses a risk to Scotland’s economy.


You’ll find the Commission’s Report here – Scotland’s Economic and Fiscal Forecasts – February 2020. Background information is also available including spreadsheets with data for all the report’s tables and charts.