Explainers

Borrowing

The Scottish Government has access to resource and capital borrowing powers.

It can use borrowing to fund capital investment. In 2023-24 it was limited to £450 million a year and to a total capital debt stock of £3,000 million.

Resource borrowing power is unlocked only when negative tax and social security forecast errors arise. In 2023-24 it was limited to £600 million of yearly borrowing and the debt stock was capped at £1,750 million.

Following the fiscal framework review in August 2023, borrowing limits increase with inflation from 2024-25.

The Commission is required to assess the reasonableness of the Scottish Government’s borrowing plans. To make our assessment we consider the wider funding position, such as: changes to the Block Grant, reconciliations, tax net positions, Scottish Government assumptions on other funding and the limits of the fiscal framework.