Spending in Scotland vs spending for Scotland

We have looked at each line in the GERS Supplementary data Expenditure Database and categorised them as follows:

• Devolved (as GERS): spending entirely in Scotland
• Devolved (adjusted): spending in Scotland not treated as for Scotland in GERS (i.e. a proportion of spending relating to ferries as well as Creative and Historic Scotland)
• Reserved: For = In: spending treated as for Scotland in GERS which relates to spending in Scotland (mostly Pensions and benefits, but also Energy bills support payments, corporate tax credits and reliefs, Network Rail costs, research grants, Lottery grants, etc.)
• Not in Scotland: spending that takes place in the UK but is entirely spent outside Scotland (i.e. New Nuclear, House of Commons, House of Lords, Museums & Galleries, DVLA)
• Reallocated based on headcount location: headcount-related spending lines which we can allocate as in Scotland based on known headcount locations - broadly split between
• Departments where the proportion of staff located in Scotland is signifcantly greater than the (8.0%) population share of their costs allocated in GERS: HMRC, DWP, Ofgem and APHA
• Departments where the proportion of staff located in Scotland is signifcantly less than the (8.0%) population share of their costs allocated in GERS: Home Office, NCA, HM Treasury, Companies House, Met Office (Scotland Office is a special case, as 100% allocated for Scotland in GERS, but only 2/3 of headcount are located in Scotland)
• Other: cases where we have identified separately reported figures for spending in Scotland:
• Asylum Protection Group: Scotland housed 5.5% of ayslum seekers in 2024/25, but because a lower proportion were housed in hotels, only 4.92% of accomodation costs were incurred in Scotland
• BBC: the BBC annual report details Scottish spending
• Nuclear decommissioning: HMT apportion Nuclear decommissioning costs on an in basis, GERS adjusts that to a population share)
• Unclassified: we conservatively estimate that at least £300m of the £600m that remains unclassified is also spent in Scotland:
• ~£115m of headcount related costs associated with the ~2,100 civil service employees that we were unable to find attributable expenditure line items for (and which have not been captured in any other classifications)
• Other costs allocated in GERS on a population share basis where we have been unable to identify a Scotland specific figure, but we know spending does occur in Scotland (e.g. £190m of social protection costs plus government property agency costs, various capital costs, etc.)
• UK Defence: Defence spending assumed to be spent in the UK, which we crudely treat as in Scotland based on share of MOD military and civilian personnel in Scotland and MOD spending with industry in Scotland (both of which were 7.5% in 2023-24)
• Spending categories which are not relevant to the in vs for debate
• Not in UK: Devolved spending which takes place outside the UK: Foreign Aid, Brexit settlement costs, international defence spending, pensions payments to expats, EEA medical costs, etc.
• PSF accounting adjustments
• Public sector debt interest

The expenditure figures in GERS are allocated to Scotland on the basis of spending considered to be for Scotland as opposed to spending which actually takes place in Scotland.

To answer the "in vs for" question, we have classified each line of the GERS Expenditure Database, referencing the line level CRA allocation methodology, documented GERS adjustments, civil service headcount location and median salary data and other reported figures. The table below provides an audit trail of our line-by-line analysis (see Methodology below); anybody can drill into the line level detail and decide if they think the treatments are valid.

We are comfortable that - recognising the limitations of the data we have available to us - this analysis represents the most robust estimate of public spending in Scotland available.

To summarise the result:

• Having classified line items representing 99% of relevant GERS expenditure, we found only ~£220m less spent in Scotland than the amount allocated for Scotland in GERS
• Of the £600m that remains unclassified (i.e where the line-level detail does not allow an easy "in vs for" assessment) we conservatively estimate that at least ~£300m is also spent in Scotland

So we can confidently say - before considering defence spending - that the amount of spending for Scotland in GERS that could conceivably be spent in Scotland will be at most ~£0.5bn.

Using a sensible approximation for defence spending in Scotland would suggest that at most the total in vs for difference is ~£0.8bn.

We have already seen that spending for Scotland is ~£2,500 higher per head than the UK average; the conclusion of this analysis is that spending in Scotland is at least ~£2,350 higher per head than the UK average.

Our finding is entirely consistent with the observation made in the GERS FAQ section in response to the question "How much spending occurs in Scotland?":

"around 9.1% of UK spending is undertaken for Scotland, slightly higher than a population share. While direct estimates of spend in Scotland are not available, this is consistent with broader indicators of public sector activity in Scotland, which show that the public sector plays a larger role in Scotland than the UK as a whole. For example, around 10% of UK public sector employees are based in Scotland. Data from HMRC’s Real Time Information system suggests that 9.1% of paybill across public administration and defence, education, health and social care was spent in Scotland in 2024-25" - GERS 2024-25 FAQs