Scotland’s public sector deficit at £14.8bn

Scotland had a public sector deficit of £14.8 billion for 2015-16 — about 9.5% of its gross domestic product (GDP) —   amid plummeting North Sea oil and gas revenues.

That compared to a UK deficit of £75.3 billion — 4% of the UK ‘s GDP.

The publication of Government Expenditure and Revenue Scotland (GERS) 2015-16 was announced on Wednesday by Scotland’s chief statistician.

The figures show that Scotland’s “illustrative share” of North Sea revenue fell from £1.8 billion in 2014-15 to a mere £60 million, reflecting a decline in total UK North Sea revenue.

Including “an illustrative geographic share of North Sea” Scottish public sector revenue was estimated at £53.7 billion — 7.9% of UK revenue.

Scotland’s public sector revenue was equivalent to £10,000 per person, £400 less than the UK average, regardless of North Sea revenue.

Total expenditure “for the benefit of Scotland by the Scottish Government, UK Government, and all other parts of the public sector” was £68.6 billion.

That is equivalent to 9.1% of total UK public sector expenditure and stood at £12,800 per person —  £1,200 per person greater than the UK average.

Scottish GDP for 2015-16 is estimated at £157 billion — about £29,200 per person.

First Minister Nicola Sturgeon said: “The foundations of our economy remain strong.

“Scotland, in terms of economic output per head – and even excluding offshore revenues – remains the most prosperous part of the UK outside of London and South-east England …

“And today’s GERS publication shows that our onshore revenues continue to grow, with revenue increasing by £1.9 billion over the year, more than offsetting the decline in offshore revenue.

“This supports increased health spending in Scotland, while education spending has also been rising even while it fell in the rest of the UK.

“And in the latest quarter, Scottish employment increased by 51,000 – the largest quarterly rise on record.

“The lower oil price has, of course, reduced offshore revenues, with a corresponding impact on our fiscal position – this underlines the fact that Scotland’s challenge is to continue to grow our onshore economy.

“However, Scotland’s long-term economic success is now being directly threatened by the likely impact of Brexit.

“Today’s figures come a day after analysis from Scottish Government showed that taking Scotland out of the European Union and our place in the world’s biggest single market would make the task of growing and diversifying the Scottish economy even harder.

“Maintaining our relationship with the EU will help us sustain the economic growth and job creation that we have seen in recent years.

“But if we were to allow Scotland to be forced out of the EU against our democratic will, then we will see Scotland’s economy as a whole take a hit worth up to £11.2 billion per year by 2030.

“It is coming down to a clear choice between economic recovery with a continued place in Europe and the single market – or economic retreat with Brexit.”

The UK government’s Secretary of State for Scotland David Mundell said: “These figures show how being part of the UK protects living standards in Scotland.

“Scotland weathered a dramatic slump in oil revenues last year because we are part of a United Kingdom that has at its heart a system for pooling and sharing resources across the country as a whole.

“It is important that continues and the financial deal between the UK and Scottish governments, struck last year as part of the transfer of new tax and welfare powers to Holyrood, means real security for Scotland.

“The fact public spending was £1,200 per head higher in Scotland than the UK as a whole also demonstrates that the United Kingdom, not the European Union, is the vital union for Scotland’s prosperity.”

The Scottish Government’s cabinet secretary for finance and the constitution, Derek Mackay, said: “It is important to note that GERS represents Scotland’s fiscal position under the current constitutional arrangements.

“The position if Scotland was to become independent would depend on a range of factors which are not reflected in this publication.

“Today’s figures do, however, highlight the challenges facing the oil industry.

“Muted global demand and a low oil price have clearly had an impact on offshore revenues – not just in Scotland – but we are doing all that we can within our powers to support the industry. ”