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Scottish Budget Spending Review 2007

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SECTION 3 THE DRAFT BUDGET FOR 2008-09

CHAPTER 18: INTRODUCTION

This third section on the Draft Budget 2008-09 provides greater detail of the spending plans for 2008-09 and the following two years, for each portfolio as set out in Section 2. The spending plans for 2008-09 will, subject to Parliamentary consideration, form the basis for the Budget Bill for 2008-09 which will be laid before Parliament in January 2008.

More detail on how these resources will be used - and their contribution towards the Scottish Government's Purpose and Strategic Objectives - is set out in Section 1. Further detail on how each portfolio will prioritise these resources is set out in Section 2.

2008-09 Spending Plans

The Scottish Government's Total Managed Expenditure ( TME) amounts to £33.2 billion in 2008-09. The Departmental Expenditure Limit ( DEL) of £27.9 billion in 2008-09 includes funding on the basis of the Barnett Formula, an agreed element of drawdown of money held at UK Treasury (£300 million) and a prudent level of over-allocation (£100 million) to help minimise future underspends.

Table 18.01 Total proposed budget for 2008-09

2008-09 DRAFT BUDGET

DEL resource £m

DEL capital £m

DEL total £m

AME and Other £m

Total £m

The First Minister

257.3

23.4

280.7

-

280.7

Finance and Sustainable Growth

1,776.4

1,026.5

2,802.9

3,194.4

5,997.3

Health and Wellbeing

10,415.0

805.8

11,220.8

-

11,220.8

Education and Lifelong Learning

2,223.7

184.0

2,407.7

124.3

2,532.0

Justice

891.2

150.1

1,041.3

-

1,041.3

Rural Affairs and Environment

535.2

80.7

615.9

-

615.9

Administration

237.0

8.7

245.7

-

245.7

Crown Office and Procurator Fiscal Service

104.3

5.9

110.2

-

110.2

Local Government

8,191.5

975.0

9,166.5

1,970.8

11,137.3

The Scottish Government

24,631.6

3,260.1

27,891.7

5,289.5

33,181.2

Scottish Parliament and Audit Scotland

106.7

3.3

110.0

-

110.0

Total

24,738.3

3,263.4

28,001.7

5,289.5

33,291.2

All figures are in cash terms and presented on a full resource basis and so include depreciation and cost of capital charges where appropriate.

In order to aid comparison with previously published spending plans, Annex A sets out the original draft budget for 2007-08 and how that is now reflected within the revised portfolio structure. The 2007-08 budget detailed in this section reflects the Draft Budget provision updated to include the latest forecasts of AME expenditure on items such as teachers' and NHS pensions.

Scottish Variable Rate

In accordance with the agreement between the Scottish Government and the Parliament's Finance Committee on the budget process, the Scottish Government confirms that it will not use the existing tax-varying powers in 2008-09.

Introduction of International Financial Reporting Standards

It was announced as part of the 2007 budget that from 2008-09 the annual accounts for all UK Government departments (including Devolved Administrations) and other public sector bodies would be prepared using International Financial Reporting Standards ( IFRS), adapted as necessary for the public sector. UK Treasury is developing an IFRS-based Government Financial Reporting Manual for the UK public sector and considering how best to manage the transition. There are some areas where accounting and budgeting guidance has not been available prior to developing the Scottish Government's spending plans for the next three years and, therefore, subsequent revision may be necessary.