Scots spending black hole of £13.2 billion , GERS figures show

Scotland's public finances have improved slightly after the country's annual deficit fell to £13.2 billion, official figures today showed.

Nicola Sturgeon says finances have improved an oil industry upturn

The annual Government Expenditure and Revenue Scotland (GERS) also showed that public spending per head in Scotland is now £1,437 higher than elsewhere in the UK - a rise of £200.

The improvement was welcomed by Finance secretary Derek Mackay who said there was growing signs of a North Sea recovery.

The deficit measures public spending against the amount of taxes raised to fund this. It fell by £1.3 billion in 2016-17 to stand at 8.3% of GDP. This includes North Sea revenues.

The amount of taxes raised, excluding the North Sea, increased by £3.3 billion (6.1%) between 2015-16 and 2016-17 – the fastest increase since current records began in 1998-99.

First Minister Nicola Sturgeon said: "Scotland’s economy remains strong. In the last quarter, our economy grew nearly four times faster than the UK and the number of people in employment is at a record high.

“These figures reflect Scotland’s finances under current constitutional arrangements. However, they show that our investment in key industries – such as the life-science sector – is providing a real boost to our onshore economy. By continuing to invest in key sectors, we will ensure Scotland remains a productive and competitive country.

“The lower oil price had an impact on North Sea revenues and the wider economy last year. However, it is encouraging to see an improvement in the overall fiscal balance and that onshore revenues grew at their fastest rate in nearly twenty years.

“However, our long-term economic success is now threatened by Brexit, which risks reducing household incomes, employment and funding for public services. That is why we continue to press for the Scottish Government to have a direct role in Brexit negotiations.”

Finance Secretary Derek Mackay added: “It is encouraging that our fiscal balance improved by nearly 10% last year. It is important to also recognise that ONS analysis shows that Scotland performs ahead of Wales, Northern Ireland and several English regions, and in line with the UK average outside of London and the south-east.

“Meanwhile, evidence also points to signs that confidence is increasing among North Sea operators, with the sector set to remain an important part of Scotland’s economy for years to come.

“An extreme Brexit outcome would do significant damage to Scotland’s public finances and would cost our economy up to £11 billion a year from 2030, and 80,000 jobs over a decade. We will continue to do all that we can with the powers available to us to grow our economy, protecting and creating jobs.”