Fiscal flows

This diagram shows flows of funds through Scotland’s three levels of government and its economy in 2015-16.

Spending represented by dotted arrows is controlled by the level of government shown, with just over 60% of spending controlled either by the Scottish or Local Government (councils).

Although HMRC collects the majority of Scotland’s taxes, the Scotland 2016 Act (Smith Commission) has put 40% of Scotland’s total tax revenue under devolved control. This means that tax rates and other rules can be set in the Scottish Government budget independently of any decisions at Westminster. The 40% figure includes a portion of VAT revenues that are said to be 'assigned' because under EU rules, there can only be one VAT rate within a member state.

The block grant from the UK to the Scottish Government is determined by the Barnett formula whereas the one received by the councils, which is called the General Revenue Grant, is decided by the Scottish Government in its budget. NDR stands for non-domestic rates which are collected by councils and redistributed back to them by the Scottish Government inside the block grant.

If you add up total public expenditure into Scotland it comes to £68 billion and the tax revenues total to £53 billion. The £15 billion difference is the fiscal budget deficit. This figure does not appear in the Scottish Government’s budget, which must be balanced by law, but is instead handled at the UK level where the overall deficit is matched by borrowing.

Some frequently asked questions about this diagram are answered in this blog post, and you can play with an interactive version where you can explore fiscal consequences of full fiscal autonomy, independence, ending Barnett or scrapping councils or the Scottish parliament.


This diagram drew on research from many sources, but the main ones are given below. I will update it to use more recent data but this requires quite a bit more research because of the new fiscal powers of the Scottish Government, especially around taxation.
  • Total spending and revenue figures are guided by values from GERS 2014-15 published in March 2016 by the Scottish Government. The total revenue figure of £53 billion for 2014-15 includes a geographic North Sea share. Total real terms spending in Scotland for all three levels of government has remained in the range £68 to £70 billion for the last five years so I've assumed a value of £68 billion for 2015-16.
  • Revenue figures were also cross-checked against Scotland's Quarterly National Accounts published by the Scottish Government in February 2016. These give revenue figures for 2015Q2 and Q3 which suggest that 2015-16 will see a total revenue similar to that of 2014-15, i.e. £53 billion.
  • Scottish Government spending, and fiscal transfers from the UK to Scottish governments, and from Scottish to Local governments are from the Draft Scottish Budget 2016-17 published by the Scottish Government in December 2015.
  • Local Government spending, NDR (business rates), council tax and other fee revenues are from Local Government Finance Statistics published by the Scottish Government in February 2016.
  • The block grant and other transfers from the UK to Scottish Government, NDR and tax through Revenue Scotland are cross-checked against the Scottish Office accounts published by the UK government in July 2015.
  • For a clear summary of public borrowing in Scotland see this article by Angus Armstrong on the NIESR blog from July 2015. It describes the new borrowing powers of the Scottish Government and their limitations.
This graph was published in A Nation Changed? The SNP and Scotland ten years on. A book with contributions from various authors edited by Gerry Hassan and Simon Barrow.


  1. Hey there are using Wordpress for your blog platform? I'm new to the blog world but I'm trying to get started and set up my own. Do you need any html coding knowledge to make your own blog? Any help would be greatly appreciated! gmail login

  2. The article was up to the point and described the information very effectively. Thanks to blog author for wonderful and informative post.
    apply for british citizenship