Last week, we had the first set of income tax reconciliations for Scotland’s new fiscal framework.
For the coming year, that reconciliation figure will be around £200m.
In the aftermath of the publication of these figures, there were reports that Scotland was also in receipt of a £700m ‘bail-out’ from Westminster.
Today, HMRC published the first ever figures on the scale of ‘income tax reconciliations’ for Scotland.
These ‘reconciliations’ – whilst being a largely dry technical issue – are a key part of Scotland’s new fiscal framework.
These income tax reconciliations are reflections of the fact that Scottish budgets are initially set on the basis of forecasts. Once outturn data is known there is then an adjustment – or reconciliation – according to whether or not these forecasts turned out to be higher or lower than forecast.
Note: before reading this blog you might find it helpful to refresh your understanding of the budget process and the reconciliation issue here.Continue reading
In an article in yesterday’s Commentary, David Eiser and Graeme Roy preview the 2021 review of the Fiscal Framework. This blog provides a quick overview of that article.
The review
In recent years, the Scottish Parliament has been taking on new fiscal responsibilities – with more to follow. In 2021, the process for how these powers are operationalised – the Fiscal Framework – will be reviewed.
But what will the review cover? Will it be a ‘broad review’? Or a more narrowly focussed technical review? Will it open up debates about further devolution? And will politicians – perhaps elsewhere in the UK – seek to open up a debate about devolved funding?
The stakes are likely to be high, not least given Brexit and the prospects for a second independence referendum
It is 20 years since the devolved Scottish Parliament was established.
In many ways, the Scottish economy has been greatly transformed over that period.
What the next 20 years will hold is obviously uncertain. But with Brexit, the possibility of IndyRef2 and major structural shifts in our economy guaranteed, it is clearly going to be a period of further upheaval.Continue reading
It is becoming more common to look beyond GDP and to understand a society’s well-being alongside its economic activity. The OECD’s Regional Well-being and Better Life Index measures regional and national quality of life through eleven domains such as income, jobs and health.
To understand Scotland’s well-being in context its important to compare it to the rest of the UK but also to other small countries that are strong performers in the world’s economy.Continue reading
