Guidance on Budget Process for Subject Committees
The aim of this paper is to provide guidance to parliamentary committees on the budget process, which is based on the Budget Review Group’s 2017 review of the budget process. The Group’s report can be found here:
Budget Review Group - Final Report
Contents
Medium Term Financial Strategy (MTFS)
Timing
The Scottish Government will publish an annual MTFS setting out its expectations and broad financial plans/projections for at least five years ahead on a rolling basis. This will be published each year following the UK Spring Statement and normally at least 4 weeks prior to summer recess.
As a result of the timing of the Scottish parliamentary elections, the previous Finance and Constitution Committee agreed with Ministers that the timing of the publication of the Medium-Term Financial Strategy (MTFS) and updated Scottish Fiscal Commission (SFC) economic and fiscal forecasts in May would not have been appropriate.
This Committee is in discussions with the Scottish Government and the SFC about the content and timing of the MTFS and will provide an update in due course. The SFC will publish their updated economic and fiscal forecasts at the end of August.
The Scottish Budget is normally published within 3 working weeks of the UK Budget. The UK Budget is now normally published in the Autumn but HM Treasury have yet to announce a date for this year. Ministers will agree a timetable for Budget 2022-23 with the Finance and Public Administration Committee once the date of the UK Budget is known and this will be published and shared with other committees.
Content
The MTFS will provide an overview of financial implications of existing policy, so that these can be understood in formulating detailed budget proposals later in the budget cycle. More information on the MTFS, its formulation and parliamentary scrutiny can be found in chapter 5 of Group’s report.
The MTFS will consist of the following four elements –
- Forecast revenue and demand-led expenditure estimates from the Scottish Fiscal Commission and their effect on Scotland public finances
- Broad financial plans for the next five years
- Clear policies and principles for using, managing and controlling the new financial powers; and
- Scenario plans based on economic forecasts and financial information in order to assess the potential impact of different scenarios on the budget.
Subject committees should draw on the MTFS financial planning information related to their portfolio as part of their on-going budget scrutiny.