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Spending and revenue

The Scottish Government estimates that total public spending in Scotland was £81 billion in 2019/20, equivalent to £14,830 per head. This estimate covers all public spending in Scotland: it includes spending by the Scottish Government and Scottish local authorities, but also spending by UK Government departments in Scotland.

Scotland’s public spending per head is higher than the UK average. It is higher than all the English regions and Wales, but lower than Northern Ireland.

Government revenue is largely centralised in the UK with the majority, including much of that raised in Scotland, being collected centrally by HM Revenue and Customs. Despite this it is possible to estimate the amount of tax raised in Scotland. The size of the estimate depends on how North Sea oil and gas revenues are allocated to Scotland. The Scottish Government estimates that around £65 billion-£66 billion of revenues were raised in Scotland in 2019/20, equivalent to approximately £11,940-£12,060 per head.

Scotland accounted for 9.2% of UK public spending, around 8% of UK revenues and 8.2% of UK population in 2019/20.

Scotland's share of spending, tax and population

North Sea revenues

In recent years, falls in the oil price combined with high levels of investment and rising decommissioning costs have resulted in North Sea revenues falling to the lowest levels since records began in 1968/69. The UK Government collects North Sea revenues.

The Scottish Government uses two approaches to estimate Scotland’s share of North Sea revenues. One approach shares the revenues between Scotland and the rest of the UK on a population basis: this is often described as a per capita share. The other approach shares the revenues on a geographical basis according to where the oil and gas fields are located.

Allocated to Scotland on a geographical basis, North Sea revenues in 2019/20 are estimated to be £0.7 billion (£724 million); allocated on a population basis, they are estimated to be £0.05 billion (£53 million). 

North Sea revenues are volatile. If allocated on a geographical basis, Scotland’s North Sea revenues have fluctuated between £1.4 billion and £-0.3 billion over the last 5 years. Negative revenues are the result of investment and decommissioning costs being greater than the revenues brought in.

North Sea revenues

Fiscal deficit

In 2019/20, Scotland’s net fiscal deficit – the difference between estimated revenues and public spending – ranges from 9.4% of GDP if North Sea oil and gas are excluded, to 8.6% of GDP if North Sea revenues are shared on a geographical basis, according to where the oil and gas fields are located. This compares with a UK fiscal deficit of 2.6% of GDP.

Scotland's net fiscal balance and current budget deficit

Most of the statistics in this note are taken from the Scottish Government’s publication Government Expenditure and Revenue Scotland 2019-2020 (August 2020).

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