Dated forecasts
We do not ignore more optimistic oil revenue forecasts but instead include the Scottish Government’s most optimistic scenario from earlier in the year, even though it is well out of date now. As a point of interest, it should be noted that the Office for Budget Responsibility’s oil and gas tax revenue forecasts from last year’s Autumn Statement turned out, once again, to be over-optimistic for 2012-13 and most probably will also be for 2013-14.
Neither do we “unquestioningly” accept that the Barnett Formula will remain in place. Rather, we questioned its future in the original paper, though this was not in our brief update as our position on the issue has not changed. In fact, CPPR was one of the first bodies to question the future longevity of the current Barnett system at a time of declining oil revenues. CPPR will be happy to further revise our analysis once the Scottish Government revises its own oil revenue forecasts, which are now over a year out of date.
Jo Armstrong
Ken Gibb
John McLaren
Centre for Public Policy for Regions
Glasgow