Scotland’s public spending deficit hits record of nearly £2,200 a head

theguardian.com:

Scotland’s public spending deficit has hit a record of nearly £2,200 a head, despite a massive increase in tax revenues driven by the global surge in oil prices.

The annual public spending estimates, which cover all the taxes and spending by the devolved and UK governments in Scotland, found Scotland raised £73.8bn in taxes last year, including income from North Sea oil, but spent £97.5bn.

The Government Expenditure and Revenue Scotland (GERS) report calculated a per-person deficit of £2,184 for the 2021-22 financial year, the highest yet recorded. This compared with £1,925 and £2,091 respectively in the previous two years.

If revenue from North Sea oil taxes was excluded, Scotland raised an estimated £70.3bn. That would have meant an overall spending gap of £27.2bn, or £2,768 a head, more than £500 higher than the previous largest gap.

John Swinney, Scotland’s deputy first minister, said the GERS data also showed that, in percentage terms, Scotland’s deficit as a measure of economic output fell by far more (10.3%) year on year than the UK’s (8.4%).

“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 increases on revenue on record,” he said.

However, that calculation overlooked the fact that proportionately, the UK’s deficit fell more significantly, by 58% year on year, compared with 46% in Scotland.

This year’s GERS data, and the comparisons with the 2020-21 figures, are heavily influenced by the dramatic impacts of the pandemic, which heavily suppressed the economy and led to record levels of government spending, distorting the overall picture.

Gary Gillespie, the Scottish government’s chief economist, was unable to say how much of