Scotland's Public Spending Deficit Rises £5.1bn to £26.5bn

Scotland's fiscal deficit for 2024-25 has surged to £26.5 billion, representing 11.7% of its GDP, more than double the UK average of 5.1%. This widening gap is primarily due to public spending rising faster than revenue, with total expenditure reaching £117.6 billion compared to £91.4 billion in revenues, partly driven by a decline in North Sea oil and gas revenue. Despite the deficit, Scottish officials emphasize that public spending per person in Scotland remains significantly higher—by about £2,669—than the UK average, reflecting the benefits of wealth redistribution within the UK. The Scottish Finance Secretary highlighted that devolved revenues have grown faster than expenditure for the fourth consecutive year and stressed that these figures reflect Scotland's current status within the UK, not an independent Scotland's finances. Challenges noted include the impact of Brexit on revenues, higher UK government debt costs, and the decline in oil and gas income, but the government remains committed to a just transition in the energy sector. UK ministers and Scottish officials agree that Scotland benefits from shared resources across the UK, though the current fiscal situation underscores persistent economic challenges for Scotland within the union.