Financial devolution in Scotland: the journey so far


Scotland is on a complex and fast-paced journey of devolution. This brings new opportunities and risks for public finances and how they’re managed in a world of growing demand and challenges for public services.

As the independent public spending watchdog, Audit Scotland’s role is to help the Auditor General and the Accounts Commission ensure that public funds are well spent and provide value for money.

We are committed to supporting the Scottish Parliament and the public to understand how devolution is changing the landscape for public finances, and how well key bodies are preparing to take on the significant responsibility of managing Scotland’s new powers. This page sets out our past and future work in this important area.

Financial powers timeline


Timeline for implementing financial powers

Raised directly in Scotland: 2015 - £4bn, by 2021- £22bn

  • 2015 - Devolved taxes: Land and Buildings Transaction Tax and Scottish Landfill Tax. Borrowing and cash reserve powers
  • 2016 - Income tax: Scottish rate introduced
  • 2017 - Income tax: Control over rates and bands. Increased borrowing and reserve powers
  • 2019 - VAT: share assigned to Scottish budget. UK formally leaves European Union (March)
  • 2020 - Devolved tax: Air Departure Tax (tbc)
  • By 2021 - Social Security: devolution of 11 social security powers

Key facts

key facts - budget, devolved taxes and social security spendingkey facts - Scottish income tax payers, EU funding

Key facts

  • 52% budget raised directly in Scotland by 2020 (2014/15 = 10%)
  • £633 million devolved taxes collected in 2016/17
  • £3.3 billion social security spending being devolved in Scotland
  • 2.5 million Scottish income tax payers
  • £270 million estimated public sector funding for EU projects



Our reports feature several exhibits that visualise complex data and processes in an accessible and informative way. See the examples below or click on our reports to find more.



Reporting on withdrawal from the European Union

Facts from the paper

Around 235,000 non-UK EU nationals were living in Scotland - 4% of the population - in 2017.

Estimated 150,000 non-UK EU nationals were employed in Scotland - 6% of the workforce - in 2017. Around 20,000 of these people are estimated to be employed in the public sector in Scotland - 3% of all public sector employees - in 2017.

The Scottish Government estimates that non-UK EU nationals working in Scotland contribute around £4.4billion to Scottish GDP per year.

We have produced a paper which looks at key audit issues for the Scottish public sector.

The UK’s decision to leave the EU represents a major constitutional change for Scotland and will affect everyone in Scotland to some degree. EU withdrawal comes at the same time as a significant expansion of the Scottish Parliament's financial powers and continued pressure on public sector budgets.

The paper presents what we think might be key issues for the bodies we audit, suggests questions which all public bodies should be asking themselves, and sets out our current plans for reflecting EU withdrawal in our audit work.

  Download the EU withdrawal paper - PDF 127Kb


Annual reporting on new financial powers

How we report:

  • Performance audit reports/briefing papers
  • Scottish Government annual audit report
  • Section 22 report on Scottish Government consolidated accounts
  • Scottish Consolidated Fund annual audit report
  • Revenue Scotland annual audit report
  • Auditor General report on National Audit Office audit of Scottish Rate of Income Tax


Our work on Scotland’s new financial powers is reported in a number of ways, including performance audits, our annual audits of the key bodies involved, and assurance reports on work by the National Audit Office (NAO) to examine arrangements for the Scottish Rate of Income Tax.

The Auditor General for Scotland may also prepare a Section 22 report for the Parliament if specific concerns or issues are identified in annual audits.


Other resources

Scottish Parliament

Giving evidence to the Parliament

Auditor General Caroline Gardner regularly reports to the Parliament on our audit work on financial devolution, and how the Scottish Government is managing its budget. View our latest evidence sessions on these topics with the Public Audit and Post-legislative Scrutiny Committee, and the Finance and Constitution Committee. You can also read our correspondence to last session’s Devolution (Further Powers) Committee (PDF 115K).


Blogging about Scotland's new financial powers

We regularly blog extra insights from our wide-ranging work across Scotland’s public sector. Mark Roberts, senior manager, looks at preparing for life outside the EU. Caroline Gardner, Auditor General for Scotland, writes about the opportunities and pitfalls that lie ahead of Scotland’s new financial powers, and audit director Mark Taylor looks at playing our part in the changing landscape of Scotland's public finances.

Caroline Gardner

Conferences and other activities

We take part in a range of engagement activities to spread the word about our work on Scotland’s financial devolution and its impact. Auditor General Caroline Gardner spoke at the September 2016 conference Economic governance for an increasingly devolved Scotland. What checks? What balances, jointly organised by University of Strathclyde International Public Policy Institute, the David Hume Institute and the Royal Society of Edinburgh. You can download her presentation here (PPT 191K).

Citizen's Guide to Scottish Devolution

Other research briefings and tools

The Scottish Parliament's Devolution (Further Powers) Committee produced a Citizen's Guide to Scottish Devolution, which outlines the powers which will be devolved to the Parliament over the next years. The Scottish Parliament Information Centre (SPICe) has also produced a number of research briefings and fact sheets on the Scottish Government budget.

Get in touch

To discuss Audit Scotland’s work on Scotland's new financial powers or let us know what you think about this page, please contact:


Mark Taylor

Mark Taylor, Audit Director

Rebecca Seidel

Rebecca Seidel, Audit Manager

Kirstin Scott

Kirstin Scott, Auditor