Published annually, the report details the difference between Scotland’s tax revenues and its public service expenditure. This is used to calculate a net fiscal balance. GERS is produced by Scottish Government statisticians, who decide on the methodology used. The report gives a picture of Scotland’s current public sector revenue and expenditure. The report tells us little about Scotland’s long term financial prospects after independence.
The report gives a picture of Scotland’s current public sector revenue and expenditure. It tells you how much money was raised by the Scottish Government, how much Scotland paid for the services it used and how well the revenues raised covered these costs. In recent years, the headline figure reported from GERS has been Scotland’s national deficit – essentially how much more Scotland spends on services than it raises in tax. While Scotland does not technically have a deficit as it is part of the UK, this figure shows an estimate of Scotland’s fiscal position at the current time.
The report is used by different sides of the debate to bolster their case, and it has featured regularly in reports by both the Scottish and UK governments attempting to promote their differing positions. GERS shows Scotland’s notional deficit, and so is often used as a sort of starting position for Scotland’s financial position should it become independent of the UK. Respected analysis group The Fraser of Allander Institute says the report “presents a useful starting point for a discussion regarding the challenges and opportunities that Scotland would face”, but stresses that it is based on current constitution arrangements and previous statistics.
The report tells us little about Scotland’s long term financial prospects after independence as it does not model the societal, economic and structural changes that an independent Scotland would cause. GERS gives us a snapshot of Scotland’s current financial position, and should not be used to project into the future.