Devolution
Interested in how power is shared between the Scottish and UK Governments? Wondering how this impacts everything from education to healthcare in Scotland? We've got you covered.
Devolution: Powers
Since the formation of the Scottish Government and Parliament in 1999, Scotland has had considerable powers devolved from Westminster.
The 1998, 2012 and 2016 Scotland Acts all saw its powers over public services, taxation and welfare benefits expanded.
The 1998 Scotland Act ruled that anything that was not explicitly written as reserved powers (ones still managed by the UK government), would automatically be a devolved responsibility (Scottish Parliament).
Devolved Matters | Reserved Matters |
Health & Social Care | Defence |
Education & Training | International Relations |
Local Government | Currency |
Police | Immigration |
Environment | Most Business Regulation |
Transport | Most Social Security Payments |
Justice | |
Tourism & Economic Development | |
Economic Development | |
Sports and the Arts | |
Equal Opportunities | |
Housing |
Devolution: Revenues and Expenditure
Total revenues in Scotland are collected by the Scottish Government, Local Government and by the UK Government to pay for spending in each government. This includes assigned revenues, which are collected by the UK government and transferred to the Scottish Government.
You can download the Government Expenditure and Revenue Scotland (GERS) 2020-21 report and database below:
government-expenditure-revenue-scotland-2021-22.pdf1107.8KB
main-charts-tables-2021-22.xlsx363.4KB
The annual Government Expenditure and Revenue Scotland (GERS) report allows us to understand this mix of spending in Scotland. The Fraser of Allander Institute has a helpful guide on understanding the report.
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Knowledge Checkpoint: Describe the economic powers devolved to the Scottish Parliament
- The Scottish Parliament has the power to raise some taxes. For example, it can alter the rates of income tax in Scotland, which can directly affect the disposable income of households and the revenues of the Scottish government.
- The Scottish Parliament can make budgetary decisions. For instance, it can allocate funds towards specific areas such as health and education, influencing the development and growth of these sectors within Scotland.
- There are a number of other powers available to the Scottish Government
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Knowledge Checkpoint: Can you name some examples of policies demonstrating devolution in action?
- Minimum Unit Alcohol Pricing
- Prescription Services
- Tuition Fees at Scottish Universities
What is GERS?
GERS is an annual estimate of the Scottish fiscal position.
- It provides a summary of how much revenue is raised in Scotland, how much the country pays for the public services consumed, and to what extent the revenues raised cover the costs of these public services (FAI).
- GERS captures entire public sector spending in Scotland (FAI). It does this by measuring total spending for the benefit of the people of Scotland by the Scottish Government, Local Government and the UK government.
Remember, the Scottish Government’s spending responsibilities include only devolved areas. Similarly, the UK government’s spending responsibilities include only reserved areas.
What does UK spending decisions mean for Scotland?
The May 2022 Spending Review laid out the Scottish Government’s spending plans from 2023/24 to 2026/27. The government warned that the outlook was challenging.
- The block grant from the UK government – the key factor determining the size of the Scottish budget – is projected to barely increase at all in real terms between 2022/23 and 2025/26, and then increase slightly in the final year of the forecast.
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Knowledge check-point: Discuss the effects of devolved economic powers on the Scottish economy
- Devolved economic powers allow the Scottish government to tailor policies to suit local needs. For instance, it can adjust tax rates to stimulate economic activity or address inequality within Scotland, potentially leading to a more balanced economic growth.
- The ability to make budgetary decisions enables the Scottish government to invest in sectors that are important for Scotland's economy. This could lead to improved infrastructure, better public services, and higher levels of human capital, all of which can boost productivity and economic growth.
- However, devolved powers also place a greater responsibility on the Scottish government to manage the economy effectively. If poorly managed, these powers could lead to budget deficits, higher levels of public debt, and economic instability.
- Additionally, while devolved powers allow for greater local control, they also mean that Scotland's economy may diverge from the rest of the UK. This could lead to challenges in coordinating economic policy and managing economic disparities between Scotland and the rest of the UK.