The Scottish government is to publish annual economic figures that have become a key battleground in the debate over independence.
The Government Expenditure and Revenue Scotland (Gers) report estimates the difference between how much the country raises in taxes and how much is spent on its public services.
Last year’s report said Scotland spent £13.4bn more than it raised in taxes..
This deficit was lower than the previous year’s £14.5bn.
But it still represented 7.9% of Scotland’s GDP – four times higher than the UK as a whole and well above the 3% target the EU sets for its members.
Economists at the Fraser of Allander Institute say this year’s figures are likely to show further improvement when they are released at 09:30, although they do not expect to see a huge change.
In a blog posted last week, the institute said: “Scotland will have a larger estimated net fiscal deficit than the UK, although both figures are likely to improve compared to last year.
“Gers is likely to show that revenues raised in Scotland are less than the UK average (to the tune of around £500-600 per head): but that spending per head in Scotland is significantly above the UK average (probably around £1,600 per head).”
How does Scotland compare to the rest of the UK?
The estimated fiscal deficit for the UK as a whole in 2018/19 was £23.5bn – or 1.1% of its GDP. This was £18.3bn less than the previous year and the lowest for 17 years.
But most parts of the UK outside of London and its surrounding areas are estimated to raise less revenue than is spent on their behalf.
Academics at Cardiff University estimated last month that Wales has a deficit of £13.7bn or 19.4% of its GDP.
Scotland had a relatively stronger fiscal position than the UK as a whole in 2010/11, but since then the position has been reversed largely because of the collapse in the oil price.
Last year’s Gers figures estimated that Scotland raised about £1.3bn from the North Sea oil and gas industry in 2017/18, which was higher than the £266m of revenue from the previous year but well below the £8bn the industry generated in 2011/12.
What is Gers anyway?
The Gers report estimates the total amount of money spent that “benefits the residents of Scotland” by the Scottish government, UK government, and all other parts of the public sector in Scotland under the current constitutional arrangements, as well as the total amount of revenue raised by taxation.
It is compiled by statisticians working for the Scottish government and is free from political interference.
Gers was described as the “authoritative publication on Scotland’s public finances” in the Scottish government’s White Paper on independence ahead of the 2014 referendum.
The figures were also used as the starting point for the SNP’s Growth Commission report, which examined the financial options for an independent Scotland.
The commission, headed by former SNP MP Andrew Wilson, suggested that independence would allow Scotland to tackle its deficit through a combination of higher taxes and a squeeze on spending growth, which he said could see the country cut its deficit to 3% in nine years.
But pro-UK parties argue that the Gers figures show that the country would face “unprecedented levels of austerity” in the years after independence.