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. Watch the How is the Scottish Budget funded? video to know more about the other sources of funding.