Date lodged: 2 May 2017
To ask the Scottish Government what long-term sustainable deficit it considers that Scotland can run.
Answered by: Derek Mackay 11 May 2017
The Fiscal Framework, agreed with the UK Government in February 2016, sets out the Scottish Government's statutory limits on borrowing as a maximum of £3 billion for capital expenditure and £1.75 billion for resource expenditure, the latter being subject to specific circumstances. The Fiscal Framework also specified annual caps of £450 million and £600 million respectively.
The Fiscal Framework does not give the Scottish Government the capability to plan for a revenue deficit. Borrowing on capital expenditure up to the cap can be planned for and is being fully deployed for 2017-18.
The Scottish Government has set out its commitment to ensure that revenue funded methods of investment will be used at a sustainable level, and do not overly constrain choices in future years. Accordingly, the Scottish Government will manage its future revenue commitments relating to investment spend to a maximum of 5% of its expected future annual total DEL budget.
Decisions on future borrowing levels will be taken as part of the 2018-19 and subsequent budget processes.