ABSTRACT
Measuring and monitoring the fiscal balance position of a country are important ways of assessing whether that country can afford its public spending commitments in the medium to long term. Historically, Scotland's annual fiscal balance has been largely irrelevant, as its public finances are part of those for the UK as a whole. Scotland has had little need for fiscal targets as it has a set budget decided by the UK government, with little or no ability to borrow. The relationship between central and local control of fiscal matters within Scotland is not straightforward. Technically, local authorities have the right to set council tax rates. Interest in Scottish fiscal matters is likely to remain high on the political agenda, although how an increased public demand for greater fiscal autonomy can be reconciled with the declining fortunes, relative to the UK, of Scotland's budget position, is unclear.
