Scottish Government

Spring Budget Revision

Introduction

1. This booklet provides supporting information for the Parliament and others in support of the "Budget (Scotland) Act 2006 Amendment Order 2007" - the Spring Budget Revision. The Order is a Scottish Statutory Instrument laid before the Parliament by the Executive in January 2007. The booklet itself has no statutory force - it is produced as an aid to understanding the Order.

2. The purpose of the Spring Budget Revision is to amend the Budget (Scotland) Act 2006, which authorises the Executive's spending plans for the financial year 2006-07. This builds on the amendment already made by the Autumn Budget Revision ("Budget (Scotland) Act 2006 Amendment Order 2006").

3. The main changes to the Executive's spending plans set out in the supporting document to the Spring Budget Revision are to reflect:

i) the transfer of resources between Scottish Executive departments, and between the Executive and UK Departments;

ii) the transfer of resources from Departmental budgets into/out of the Central Unallocated Provision ( CUP) (for further details see page 3);

4. The purpose of the Spring Budget Revision is to seek Parliamentary approval for these changes.

Transfers

5. Most transfers do not affect the Executive's budget as a whole. Instead, they move provision within or between portfolios, often to reflect changes in responsibility between departments or changes in payment mechanisms. Transfers to and from UK departments do affect the total of the Scottish Budget, but largely reflect either transfers of responsibility or work done by UK departments on our behalf, or vice versa. The most significant transfers are as follows:-

• £68m transfer from HM Treasury to cover an increase in NHS & Teachers' Pension requirements mainly due to a change in the actuarially provided standard contribution rate;
• £52m transfer from HM Treasury to cover the costs of the Housing Stock transfers for Argyll & Bute and East Dunbartonshire Councils;
• £45m additional funding for Education's School Estate Programme;
• £41m additional funding for ETLLD for capital projects and to create a provision for European Structural Funds;
• £31m transfer from Justice to FCSD for Anti Social Behaviour;
• £20m adjustment to ELLD's Student Loan forecast of repayments & loans issued; and
• £227m adjustment to the National Insurance contributions forecast.

Central Unallocated Provision

6. The central unallocated provision ( CUP) was first introduced at Autumn Budget Revision 2004. Further information on the CUP is set out in Scotland's Budget Documents: The 2004-05 Autumn Budget Revision.

7. The revisions detailed in this document show the following amounts being transferred to and from the CUP.

Table 1.1 Transfers to/from Central Unallocated Provision by Portfolio

The form of this supporting document

8. The Executive continues to discuss with the Finance Committee and others how it can improve the presentation of supporting information, and which material they find most useful. This document builds on changes introduced for the Budget (Scotland) Bill 2006 supporting document, and the rest of the document is set out as follows.

9. Following this introduction, the summary tables set out the changes sought in the Order at departmental level, and the effect of the proposed changes on the overall cash authorisations. There should therefore be a clear read across from the numbers shown on the face of the Budget Act (as amended by the Autumn Budget Revision), to those in these tables, and to the revised numbers shown in the Spring Budget Revision Order itself. A third set of summary tables provides a reconciliation between the resource budgets and the cash authorisations. A final table shows the voted Capital Spending and Net Investment for each department. It should be noted that for the remainder of the document, only spending that scores as capital in the Executive's or Direct Funded Bodies' accounts is shown as capital.

10. The main body of the document then provides a more detailed analysis of the proposed changes on a department by department basis. For each department and direct-funded body, it shows:

• a summary of the changes proposed for the department;
• how the proposed revised departmental budget is comprised in terms of operating and capital resources, divided into the main spending aggregates: DEL (Departmental Expenditure Limit), AME (Annually Managed Expenditure) and spending outside TME (Total Managed Expenditure);
• details of the proposed changes; and
• details of the proposed revised budget disaggregated by individual Level 3.

11. The Executive's spending proposals are in the main presented to Parliament in resource terms. But to meet the requirements of the "Public Finance and Accountability (Scotland) Act 2000", Budget Bills and Revisions seek authority for the budgets of non-departmental public bodies ( NDPBs) in cash, and NDPB numbers in this supporting document are also given in cash terms. In order to allow comparison with NDPB budgets presented in other Executive publications - including " Draft Budget 2007-08" - the following table compares cash and resource budgets at departmental level.

Table 1.2 - Revised NDPB Cash and Resource Budgets by Department, 2006-07

Process for the Budget Revision

12. Following detailed consideration by the Subordinate Legislation and Finance Committees, the Scottish Parliament has an opportunity to vote on the Spring Budget Revision Order.