DEPUTY First Minister John Swinney has welcomed a "huge fall" in Scotland's deficit after the latest Government Expenditure and Revenue Scotland (GERS) figures were released.
Data shows the deficit has decreased dramatically to £23.7 billion in 2021/22 – a fall of 10.3% compared to last year.
It shows Scotland's fiscal position is recovering faster than the UK as a whole which saw a deficit drop of 8.4%.
The GERS figures show Scotland's deficit is 12.3% of gross domestic product (GDP).
For the UK, the figures show a deficit of 6.1% of GDP.
When North Sea oil is removed, Scotland’s deficit increases to 15.7% or £27.2bn.
Scottish public sector revenue was estimated as £73.8bn – 8% of UK revenue. Of this, £3.5bn was North Sea revenue. Scottish non-North Sea revenue was £70.3bn – 7.7% of UK revenue.
The statistics indicate total public spending dropped to £97.5bn.
GERS is published every year towards the end of August and estimates the difference between what Scotland raises in taxation and what is spent on public services.
It also includes UK Government spending in non-devolved areas in Scotland including the likes of defence and allocates a proportion of the UK's debt payments to Scotland.
Last year, the figures put Scotland’s spending deficit at £36.3bn, more than double the £15.1bn – or 8.6% of GDP – recorded the year before. The data covered the tax year of 2020/21 and so was impacted by the huge spending and reduced revenues during the Covid-19 pandemic.
Swinney said: "GERS 21/22 is published this morning. It shows that Scotland’s fiscal position is recovering faster than the UK’s – a huge fall in the annual deficit thanks to the largest increase in revenues on record.
"This is before the full impact of the rise in oil prices that we’ve seen more recently, which is likely to see Scotland’s deficit fall faster than the UK’s again next year, with oil and gas revenue set to grow to £13bn this year.
"Indeed, GERS shows how the UK’s response to the cost crisis is being built on Scotland’s natural resources – not least with its windfall tax on the North Sea.
"Today’s figures show that even without North Sea receipts, revenue raised in Scotland covers all devolved expenditure as well as all social security spending – devolved and reserved – including state pension provision in Scotland."
Non-North Sea revenue increased by £8.4bn in 2021-22, an increase of 13.6% as in particular VAT, non-domestic rates, fuel duties, and income tax, and national insurance contributions grew strongly.
Scotland’s public sector revenue is equivalent to £13,463 per person, £221 less than the UK average.
The figures have been at the centre of the independence debate for many years but they do not tell us what an independent Scotland would look like, as they only show Scotland’s current position as part of the Union.
The report is compiled by Scottish Government statisticians and the data on spending is not estimated but some UK spending in Scotland is allocated on a proportional basis.
There have been complaints in the past about the fact that full spending figures in GERS have to be estimated due to the UK figures included.
The figures are compiled independently of Scottish Government ministers and are assessed by the UK Statistics Authority as being in line with the Code of Practice for Offical Statistics, meaning they are free of political interference.
GERS figures were first published in 1992 under former prime minister John Major, which the UK Government hoped would inform the debate around devolution and help it make the case against the establishment of a Scottish Parliament.
