Explainers

Block Grant Adjustments

The fiscal framework sets out how funding for the Scottish Budget should be adjusted to account for devolution of taxes and social security. These modifications are known as Block Grant Adjustments (BGAs).

Tax BGAs remove funding because the Scottish Government is now raising its own tax revenue. Social security BGAs add funding because the Scottish Government has become responsible for some social security payments, which the UK Government no longer has to pay.

BGAs are originally based on revenues or spending in Scotland the year before devolution of the relevant tax or social security payment. They are then updated each year in line with changes in equivalent UK Government devolved revenue or social security spending, adjusted for relative differences in population growth. Therefore, BGAs try to simulate how much would have been raised or spent in Scotland had the taxes and social security payments not been devolved.

Because BGAs depend on revenues and spending in the rest of the UK, they are based on forecasts from the Office for Budget Responsibility (OBR). However, we include them in each of our forecast publications.

Watch the How is the Scottish Budget funded? video to find out more about BGAs.