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Update From The Scottish Fiscal Commission - COVID-19 and the Scottish Budget
30th April 2020
The Scottish Fiscal Commission has today published an update on the Scottish Government’s Budget in the light of the significant changes in spending commitments and funding since its forecast on 6 February.
The combined effect of the Scottish Government’s Budget deal and the UK Budget on 11 March is an increase in spending of £247 million in 2020-21.
In addition, the Scottish Government is currently expected to receive £3.5 billion from the UK Government, representing its share of the significant increase in public spending in the UK aimed at tackling the COVID-19 crisis.
The Commission’s Chair, Dame Susan Rice, said
“In the light of the changes since our last forecast, today we are providing an updated perspective on the current Scottish Budget position.
“The Scottish Government is required to broadly balance its budget and has limited scope for borrowing and using its reserves. Given the uncertainties about the level of funding and the spending required to respond to the crisis this may present some challenges.”
The other major component of the Scottish Government’s funding is income tax which in February the Commission forecast would account for over £12 billion of the 2020-21 Budget. Although it is clear that income tax revenues will be heavily affected by the crisis, the devolution agreement with the UK Government means there will be no effect on the Budget for 2020-21. Any changes will be applied in 2023-24 through an adjustment depending on the relative differences in Scottish and UK income tax performance in 2020-21.