The Scottish Government has access to resource and capital borrowing powers. Following the fiscal framework review in August 2023, borrowing limits will increase by inflation in future years.
The Scottish Government can use capital borrowing to fund capital investment. In 2023-24 it is limited to £450 million a year and to a total capital debt stock of £3,000 million.
Resource borrowing can only be unlocked when negative tax and social security forecast errors have occurred. It is limited to £600 million of yearly borrowing and capped to £1,750 million of overall resource debt stock.
The Commission is required to assess the reasonableness of the Scottish Government’s borrowing plans. To make our assessment we consider the wider funding position, such as: changes to the Block Grant, reconciliations, tax net positions, Scottish Government assumptions on other funding and the limits of the fiscal framework.