Scottish Government

INTRODUCTION

1. This booklet provides supporting information for the Parliament and others in support of the "Budget (Scotland) Act 2008 (Amendment) Order 2008" - the Spring Budget Revision. The Order is a Scottish Statutory Instrument laid before the Parliament by the Government in January 2009. 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 2008, which authorises the Government's spending plans for the financial year 2008-09.

3. The main changes to the Government's spending plans set out in the supporting document to the Budget Bill are to reflect the transfer of resources between Scottish Government portfolios, and between the Scottish Government and UK Departments :

• A technical change to the presentation of the income from National Insurance Contributions (£1,880m)which will no longer be shown as a source of income in the Health and Wellbeing portfolio in order to bring it in line with the presentation in the Draft Budget and consolidated accounts;
• A technical change to the presentation of the Scottish Water Cost of Capital (-£150m). The budget now shown reflects only the interest payable on loans to Scottish Water from Scottish Ministers in line with the consolidated accounts;
• Acceleration of capital spending (£53.2m);
• Increases in the AME budgets for roads cost of capital (£22m) and student loans (£56m)
• The release of deeds of assumption provision in respect of an early repayment to Strathclyde Passenger Transport using resources outside DEL (£25m).

In total these changes will increase Scottish Government spending by £1,902 million from £31,101 million to £33,003 million. The largest element of this change (£1,880m) is accounted for by the presentational change to National Insurance Contributions.

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

Transfers

5. Most internal transfers do not affect the Government's budget as a whole. Instead, they move provision within or between portfolios, often to reflect changes in responsibility between portfolios, changes in payment mechanisms and virement intended to maximise the use of available resources. Transfers to and from UK departments do affect the total of the Scottish Budget, but largely reflect transfers of responsibility or work done by UK departments on our behalf, or vice versa and technical adjustments.

Format of Supporting Document

6. The Scottish Government 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 in previous Budget (Scotland) Bill supporting documents, and the rest of the document is set out as follows:

7. Following this introduction, the summary tables set out the changes sought in the Order at portfolio 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 portfolio. It should be noted that for the remainder of the document, only spending that scores as capital in the Scottish Government's or Direct Funded Bodies' accounts is shown as capital.

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

• a summary of the changes proposed for the portfolio;
• how the proposed revised portfolio 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 major changes; and
• details of the proposed revised budgets disaggregated to Level 3.

9. The Scottish Government'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 Scottish Government publications - including " Draft Budget 2009-10 " - the following table compares cash and resource budgets at portfolio level.

Table 1.2 - Revised NDPB Cash and Resource Budgets by Portfolio, 2008-09

Process for the Budget Revision

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