Critics Ready to Pounce as Scottish Deficit Remains High

Scotland’s annual ‘balance sheet’ will be published today and is expected to show the deficit remaining high, despite a boost from oil taxes.

The Government Expenditure and Revenue Scotland (GERS) report for 2017/18 should provide some encouragement for the government.

However, the deficit is still likely to hover around 8% of GDP, more than three times the UK figure and enough for critics to accuse ministers of mismanaging the economy.

Last year’s report said Scotland spent £13.3 billion more than it raised in 2016/17 (representing an 8.3% share of GDP) and getting it down has resulted in cuts to public spending in the absence of any substantial growth.

The UK government has reduced its deficit to 2.4% (£39.4bn), the lowest since 2007 and below the 3% international threshold. Westminster is hoping to move into a surplus.

Scotland has been hit by the 2014 collapse in the oil price. Of the £58bn raised in total in 2016/17, only £208m was from North Sea oil and gas revenue – against nearly £8bn in 2011/12.

Economists at Strathclyde University’s Fraser of Allander Institute said the gap between the Scottish and UK deficits in last year’s GERS report was the largest since the annual figures were published on a consistent basis nearly 20 years ago.

The report will be published at 9:30am by First Minister Nicola Sturgeon and Finance Secretary Derek Mackay.

Source: ailybusinessgroup.co.uk