Thank you, convener, and good morning. The autumn budget revision provides the first of two opportunities to formally amend the Scottish budget for 2017-18. In order to assist the committee with its scrutiny, I provided a brief guide to the autumn budget revision, which sets out the background to and details of the main changes proposed. I hope that the committee has found the guide to be helpful.
This year’s autumn budget revision deals with four types of amendments to the budget. First, there are a couple of funding changes. Secondly, there are a few technical adjustments that have no impact on spending power. Thirdly, there are a couple of Whitehall transfers. Finally, there are some budget-neutral transfers of resources between portfolio budgets.
The net impact of all those changes is an increase in the approved budget of £19 million from £39,300.2 million to £39,319.2 million. Table 1.1 on page 4 of the supporting documents shows the approved budgets following the changes sought in the autumn budget provision. The supporting documents to the autumn budget revision and the brief guide, which was prepared by my officials, provide background on the net changes.
The first set of changes comprises deployment of financial transactions to support the Scottish growth fund offset by a transfer to central resources from the coastal communities fund to be held until required. In total, those changes increase the budget by £7.7 million. The second set of changes comprises a few technical adjustments to the budget. They are non-cash adjustments and therefore budget neutral, as they cannot be redeployed to support discretionary spend elsewhere, and have a net positive impact of £6.3 million on the overall aggregate position. It is necessary to reflect those adjustments to ensure that the budget is consistent with the accounting requirements and with the final outturn that will be reported in our annual accounts.
The Scottish budget aligns with the accounting requirements under the Government financial reporting manual; accordingly, a budget provision is included within the Scottish budget for the financial year to reflect the recognition of relevant assets with revenue finance infrastructure schemes in accordance with the accounting requirements. The adjustment to the budget at this autumn budget revision is £9.9 million.
Other technical adjustments are a transfer of £1 million to the judicial salaries budget, which sits outside the budget that is approved by the Scottish Parliament; a £2 million transfer of non-cash budget from the National Records of Scotland to Historic Environment Scotland; and a couple of minor adjustments to allow Skills Development Scotland and the Risk Management Authority to access cash reserves.
With regard to the Whitehall transfers and allocations from Her Majesty’s Treasury, there is a net positive impact in the budget of £5.2 million in relation to the coastal communities fund and the Edinburgh cultural summit.
The final part of the budget revision concerns the transfer of funds within and between portfolios to better align the budgets with profiled spend. In line with past years, there are a number of internal portfolio transfers that have no effect on portfolio totals but ensure that internal budgets are monitored and managed effectively. The main transfers between portfolios are noted in the supporting documents and the guide.
As we move towards the financial year end we will continue, in line with normal practice, to monitor forecast outturn against budget and wherever possible we will seek to utilise any emerging underspends to ensure that we make optimum use of the resources available in 2017-18 and to proactively manage the flexibility provided under the fiscal framework agreement between HM Treasury and the Scottish Government. I will provide the committee with a mid-year report on revenue and spending to date, alongside the spring budget revision, when published, to improve transparency of the budget management process and the decisions we will take in year, in line with the budget process review group recommendations.
Also, in response to the recommendations of the budget process review group on the transparency of budget information, two new tables have been added to this year’s supporting documents on page 8. The tables show the sources of funding that support the changes I have flagged and the movement of available resources. I hope that members find them useful.