Kate Forbes

The Government Expenditure and Revenue Scotland (GERS) 2020-21 statistics show record public spending of £99.2 billion, an increase of 21% on 2019-20. This increase reflects the scale of Scottish Government support during the pandemic, with £9 billion invested in public health measures, NHS Scotland, businesses and financial help for individuals.

Revenues totalled £62.8bn, down from £66.2bn in 2019-20. This includes a drop in North Sea receipts of 35% as worldwide demand for oil and gas fell sharply, as well as lower receipts from non-domestic rates and VAT.

In common with countries around the world, the significant rise in spending caused by COVID-19 meant Scotland’s notional deficit, the difference between income and expenditure, rose – up 13.6 percentage points to 22.4% of GDP.

Kate Forbes, finance and economy secretary, said: “These statistics clearly highlight the significant economic impact of the pandemic. Scotland’s economy contracted by about 10% last year, which is in line with the performance of the UK economy.

“The pandemic has not only changed people’s lives but it has fundamentally shifted our fiscal landscape, with countries and markets around the world reassessing what represents a viable deficit.

“The Scottish Government has worked tirelessly to support businesses and households throughout the pandemic. While we face continued challenges, there are welcome signs that the Scottish economy is beginning to recover strongly. Business confidence is back above pre-pandemic levels, output is increasing and job vacancies are rising. As we rebuild, we are pushing forward with an ambitious 10 year agenda of economic transformation to help seize Scotland’s potential and deliver a more prosperous, fairer and greener economy.”

She added: “The GERS figures reflect Scotland’s position within the UK, under which 40 per cent of spending and 70 per cent of revenue income is reserved to the UK Government. The pandemic has clearly demonstrated the need for fiscal reform and that the Scottish Government’s financial powers are insufficient to deal with the new economic reality.

“We once again urge the UK Government to engage positively with us to devolve additional borrowing powers which would allow the Scottish Government to work with business and the public sector to build a recovery that works for Scotland.”