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PN B1

12 July 2004

New spending plans for Scotland

New spending plans, announced today, will provide for spending in Scotland to grow by an average annual rate of 3.5% in real terms over the next three years. In 2007-08, spending will be £4.2 billion higher than in 2004-05.

The Scottish Executive will make its own announcements in due course about its detailed spending plans to improve delivery of devolved public services in accordance with the needs of the people of Scotland. There will be no increase in the costs of the Scotland Office over the Spending Review period.

The Secretary of State for Scotland, Alistair Darling, said:

“The Government has today announced an excellent spending settlement for Scotland. Devolution continues to work well for the benefit of all the Scottish people. It is now for the Scottish Executive to publish its plans for delivering the best possible public services and investment, and deliver prosperity for all the people of Scotland, in partnership with the Government.”

Details

• In line with the objectives of the Government’s efficiency review, the Scottish Executive will be able to release any efficiency gains it makes to strengthen further front line delivery in Scotland. The Scottish Executive is engaged in spending review efficiency and evaluation exercises as ambitious as those in England in reducing back office and related areas.
• Initiatives announced today, including the Government’s 10-year science and innovation strategy and its proposals to tackle child poverty, will be taken forward in consultation with the Scottish Executive.
• Scotland will also benefit from spending programmes which are not devolved.

Notes for editors

1. The Scottish Executive budget is set in resource terms consistent with those of UK departments. The increases have been determined on the basis of the Barnett formula, which ensures that Scotland receives a population-based share of changes in comparable spending in England. Scotland will also benefit from increases in spending in areas which are not devolved.
2. The devolved administrations’ budgets continue to be determined within the UK framework of public expenditure. Responsibility for UK public expenditure allocation remains with the Treasury. Once overall public expenditure budgets have been determined, the devolved administrations have freedom to make their own spending decisions within the overall totals on functions under their control in response to local priorities.
3. The Scotland Departmental Expenditure Limits for the next three years are £22.750 billion, £24.159 billion and £25.523 billion. These represent increases over the 2004-05 limit of £1.4 billion, £2.8 billion and £4.2 billion and include increases announced in the Budget for health and education. They represent a real terms average annual increase in provision over the next three years of 3.5%.
4. For further details please contact the Scotland Office Press Office on 020 7270 6875.

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