The Scottish Government can also borrow money. The Fiscal Framework Agreement with the UK Government states:
“Under this agreement, the Scottish Government will have the power to borrow up to £600m each year within a statutory overall limit for resource borrowing of £1.75bn.”
The 2022 Scottish Budget states that it will borrow £15 million in ‘Resource’ and £450 million in ‘Capital’.
It should be noted that the Scottish Budget 2022-23 showed that the Scottish Government borrowed £319 million in ‘Resource’ and £450 million in ‘Capital’ in 2021-22.
In August 2022, the Scottish Government published a GERS report and the accompanying press release stated:
“The Government Expenditure and Revenue Scotland (GERS) 2021-22 statistics show Scotland’s deficit fell by 10.3% – compared to a drop of 8.4% for the UK.
Revenue rose to £73.8 billion, up a record £11.1 billion from the previous year, while public spending fell by £0.9 billion to £97.5 billion.”
“Today’s figures show Scotland’s fiscal position is recovering faster than the UK’s, with a huge fall in the annual deficit thanks to the largest increase in revenues on record.”
The same GERS report also reported that “Total (Public) Expenditure per Person” in Scotland in 2021-22 was £17,793 whilst it was £15,830 in the UK for the same period.
In addition to this, the Scottish Government announced on 7th September that it had decided to make £500m in savings to the 2022-23 budget to deal with inflation and public sector pay.
It should be noted that the Scottish Government has already found the funds to sustain the teachers’ 5% pay rise, it is only the balance that is outstanding. The Scottish Government has also already earmarked the funds to pay the local government staff final pay offer – which we believe to be equivalent to a 5-11% pay increase depending on the post.
The EIS, therefore, believes that the Scottish Government currently has enough funding to afford the teachers’ pay claim, and it still has scope to borrow more and allocate more drawn down funds this year. The EIS believes that increasing public investment should be a greater priority than reducing the Scottish Government’s annual deficit faster as the GERS statement implies.