A widely-shared Facebook post which claims that Scotland does not receive any funding from England is missing important context.
The post says: “Just for clarification, Scotland does not receive any money from England. We get a part of the money we give England, back.”
We assume that when the post refers to England, it actually means the UK Government.
While the amount of money that the UK Government returns to Scottish public authorities is less than it receives from Scotland, it also spends money for Scotland directly. In total, the amount of spending for Scotland, by Scottish and UK public authorities, is higher than the amount Scotland raises in revenue.
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How tax is collected in Scotland
Scotland’s public sector revenues are collected in a few different ways.
Some revenue is raised, collected and kept for spending in Scotland (including council tax and some devolved taxes).
Income tax, with the exception of income tax on savings and dividends, is collected by the UK Government via HMRC but then goes directly to the Scottish Government.
Many other taxes (such as National Insurance, capital gains tax and VAT) are collected by HMRC.
According to the latest edition of the annual Government Expenditure and Revenue Scotland (GERS) report, Scotland’s public sector revenue was £73.8 billion, based on a calculation which essentially attributes all public sector revenues from North Sea gas and oil activity to Scotland.
Of this, £19 billion was devolved and so, effectively, stayed in Scotland for use by Scottish authorities.
The remainder, £54.7 billion, was collected by the UK Government.
How money is spent in Scotland
Public spending in Scotland is carried out by both Scottish authorities (including councils and the Scottish Government) and the UK Government. The Scottish Government is in charge of “devolved” spending in areas such as health, policing and education. The UK Government manages areas such as defence, pensions and international relations—this is known as “reserved” spending.
Funding for the Scottish Government comes from a combination of devolved tax revenues (like income tax) and limited borrowing, along with an annual “block grant” from the UK Government.
When the Facebook post says “we get a part of the money we give England, back”, this may refer to the block grant.
The block grant provided to Scotland during 2021/22 amounted to £33.1 billion (after adjustments for tax and welfare).
As this is lower than the £54.7 billion which is collected from Scotland by the UK Government, it is technically accurate to say that the UK Government sends only part of the money it collects from Scotland back to Scottish public authorities.
However, these figures alone do not tell the whole story because the UK Government itself spends lots of money for Scotland directly, so it is misleading to say that Scotland as a whole gets back less from “England” than is collected from it.
Scotland has a population of 5.47 million, meaning it accounts for just over 8% of the total UK population. It also generates 8% of total UK tax receipts.
However, spending for Scotland is higher than money generated in Scotland.
The Scottish Government says: “Total expenditure for the benefit of Scotland by the Scottish Government, UK Government, and all other parts of the public sector was £97.5 billion.”
It goes on to say: “This is equivalent to 9.2% of total UK public sector expenditure, or £17,793 per person, which is £1,963 per person greater than the UK average.”
Of the £97.5 billion, £35.9 billion was provided by UK Government bodies outside of Scotland.
In combination with the £33.1 billion block grant, this means the amount the UK Government either sends Scottish authorities or spends for Scotland, is higher than the £54.7 billion collected from the country.