An update published by the Scottish Fiscal Commission today shows the 2021-22 Scottish Budget has increased by £1.3 billion since the Scottish Government introduced its Budget in January 2021.
The Commission published its Fiscal Update ahead of the final stage of the Budget Bill.
The increase largely comprises of additional COVID-19 funding allocated at the UK Budget, and COVID-19 funding deferred from 2020-21. This extra funding has allowed the Scottish Government to reach a budget deal for Stage 3 with the Green Party and the Liberal Democrats.
Following the publication of Scottish GDP forecasts in January a Scotland Specific Economic Shock was triggered, allowing the Scottish Government enhanced borrowing powers for forecast error. The Scottish Fiscal Commission has confirmed the conditions for the shock are still present, in part because of the differences in timing of the Commission’s forecasts and the latest forecasts from the Office for Budget Responsibility.
The Commission still believes the outlook for Scottish GDP and UK GDP are broadly similar, but the short-term forecasts are sensitive to assumptions about public health restrictions.
The Commission highlights how on-going monitoring of the Scottish Budget is increasingly important. Following the recommendation of the Finance and Constitution Committee the Commission plans to publish its next set of forecasts in September.
Notes:
1. Our 2021-22 Fiscal Update is now on our website. Background information is also available including spreadsheets with data for all the update’s tables and charts.