Reform Scotland believes that each tier of government should be responsible for broadly raising the money that it spends.
According to Government Expenditure & Revenue 2012-2013, published in March 2014, total public sector expenditure in Scotland in 2012-13 was £65.2 billion. Of this £38.6billion, or 59%, was spent by the Scottish Government and Local Authorities. During the same period, £53.1bn of public sector revenue was raised in Scotland, yet only £4 billion of this, or 7.5%, was raised by taxes controlled by the Scottish Parliament. Another way of looking at it is that the Scottish Parliament is only responsible for raising 10% of what it spends.
Reform Scotland believes that this imbalance is wrong. We believe that each tier of government, whether that is Westminster, Holyrood, or local authorities, should be responsible for raising the majority of what it spends. We believe that this is necessary to increase the accountability and fiscal responsibility of government. It would also ensure financial return for successful economic policies if revenues grow and give the Parliament sufficient levers to achieve higher economic growth.
This idea was developed further with the report ‘Devolution Plus’ which we published in September 2011. The report called for a number of taxes and welfare powers to be devolved to the Scottish Parliament.