Scotland’s deficit cut to £13.3bn

Scotland’s public spending deficit has been cut to £13.3 billion over the past year, according to official Scottish government statistics released today.

The latest Government Expenditure and Revenue Scotland (Gers) report revealed the figure represented an 8.3 per cent share of Scotland’s GDP.

Last year’s Gers figures had put the Scottish budget deficit at £14.8 billion, which has now been revised to £14.5 billion.

The UK as a whole has a budget deficit of £46.2 billion - 2.4 per cent of its GDP.

The figures estimated that Scottish public sector revenue was £58 billion - the equivalent of 8 per cent of total UK revenue.

Of this, only £208 million was revenue from the North Sea oil and gas industry - an increase from the £56 million recorded in 2015/16 but far lower than it had been before the oil price crash.

However, non-North Sea revenue increased by 6.1 per cent, from £54.5bn in 2015/16 to £57.8bn.

Including an illustrative geographical share of North Sea revenue, Scotland’s public sector revenue is equivalent to £10,722 per person, £312 less than the UK average.

Excluding North Sea revenue, it is £10,684 per person - £349 less than the UK average.

The Gers report put total expenditure by the Scottish government, UK government and other public bodies in Scotland at £71.2 billion - 9.2 per cent of total UK public sector expenditure.

This was equivalent to £13,175 per person, which was £1,437 per person greater than the UK average.

Finance Secretary Derek Mackay said: “It is encouraging that our fiscal balance improved by nearly 10% last year. It is important to also recognise that ONS analysis shows that Scotland performs ahead of Wales, Northern Ireland and several English regions, and in line with the UK average outside of London and the south-east.

“Meanwhile, evidence also points to signs that confidence is increasing among North Sea operators, with the sector set to remain an important part of Scotland’s economy for years to come.

“An extreme Brexit outcome would do significant damage to Scotland’s public finances and would cost our economy up to £11 billion a year from 2030, and 80,000 jobs over a decade. We will continue to do all that we can with the powers available to us to grow our economy, protecting and creating jobs.”

Scottish Conservative shadow finance secretary Murdo Fraser said: “Today’s figures confirm the facts - Scotland is better off as part of the United Kingdom.

“All of us last year received a Union dividend of £1750 per head.

“The truth is that when times are tough – as they have been in Scotland over the last few years – we can rely on the weight of the whole UK to ensure schools, hospitals and public services remain decently funded.”

First Minister Nicola Sturgeon said: “These figures reflect Scotland’s finances under current constitutional arrangements. However, they show that our investment in key industries – such as the life-science sector – is providing a real boost to our onshore economy. By continuing to invest in key sectors, we will ensure Scotland remains a productive and competitive country.

“The lower oil price had an impact on North Sea revenues and the wider economy last year. However, it is encouraging to see an improvement in the overall fiscal balance and that onshore revenues grew at their fastest rate in nearly twenty years.

“However, our long-term economic success is now threatened by Brexit, which risks reducing household incomes, employment and funding for public services. That is why we continue to press for the Scottish Government to have a direct role in Brexit negotiations.”