SR2002/SCOT
15 July 2002
New spending plans for Scotland
New spending plans for Scotland which will provide for spending in Scotland to rise by £1.5 billion in 2003-04, £2.7 billion in 2004-05 and £4.1 billion in 2005-06 compared to 2002-03 were announced by the Chancellor, Gordon Brown, today.
The extra resources will allow the Scottish Executive to improve devolved public services and determine their own particular expenditure priorities in line with the needs of the people of Scotland.
Welcoming the settlement the Secretary of State for Scotland, Helen Liddell, said today:
"The Government has today announced an excellent spending settlement for Scotland. Our successful management of the economy and sound public finances have meant that we can provide substantial additional resources for Scotland. It is now for the Scottish Executive to translate this into the best possible public services for the Scottish people.
"By 2005-06, spending will be £4.1 billion higher in Scotland than in 2002-2003. The spending review demonstrates the Government's commitment to provide the opportunity for everyone to fulfil their potential through education and employment; to promote a fair and inclusive society in which communities are healthy and secure; and facilitates sustained economic growth.
"It shows that Scotland continues to benefit from being part of the United Kingdom, and that devolution is working for the benefit of all of Scotland's people. The settlement will enable the Scottish Executive to deliver improved services and prosperity for all the people of Scotland in partnership with the UK Government.
"The money has been allocated under the Barnett formula. It continues to provide a fair, transparent and flexible basis for deciding spending plans in Scotland."
The Scottish Executive has freedom to make its own spending decisions within the overall totals on functions under their control in response to local priorities. The Scottish Executive will make its own announcements in due course about their detailed spending plans.
The changes in the Scottish Executive's budget in the spending review has been linked to changes in spending plans of United Kingdom government departments by the Barnett formula. The formula gives Scotland, Wales and Northern Ireland a population-based share of planned changes in comparable spending in England.
Scotland will also benefit like the rest of the UK from increased spending in areas which are not devolved.
Notes for editors
1. The Scotland Departmental Expenditure Limits for the next three years are £19.7 billion, £20.9 billion and £22.3 billion. These represent increases over the 2002-03 limit of £1.5 billion, £2.7 billion and £4.1 billion and include increases announced in the Budget. They represent a real terms annual average increase in provision over the next three years of 4.4 per cent.
| £ million | 2002-03 | 2003-04 | 2004-05 | 2005-06 |
| Scotland | ||||
| Resource Budget | 16637 | 18062 | 19052 | 20358 |
| Capital Budget | 1876 | 1953 | 2146 | 2288 |
| Total Departmental Expenditure Limit1 | 18207 | 19718 | 20884 | 22319 |
1 Full resource budgeting basis, net of depreciation
|
2. The budgets have been set in resource terms consistent with those of UK departments. The increases have been determined on the basis of the Barnett formula. The general principles for determining budgets are set out in the Statement of Funding Policy. The Barnett formula ensures that Scotland receives a population-based share of changes in comparable spending in England.
3. The devolved administrations' budgets continue to be determined within the United Kingdom framework of public expenditure control. Responsibility for United Kingdom 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. The devolved administrations will make their own announcements in due course about their detailed spending plans.
4. The Government conducted a comprehensive review of public services - the Comprehensive Spending Review - in 1998. The 2000 Spending Review built on this by setting targets and allocating resources for the three years to 2003-04. The 2002 Spending Review revises these plans for 2003-04 and outlines new plans for 2004-05 and 2005-06.
5. For further details please contact the Scotland Office Press Office on 020 72706875or visit the Scotland Office website: www.scotlandoffice.gov.uk.