ByAngus Cochrane

Senior political journalist, BBC Scotland

Scotland's public spending deficit fell by £600m last year to £25.3bn after an increase in the amount raised in taxes, figures show.

The annual Government Expenditure and Revenue Scotland (Gers) report compares the tax raised in Scotland with public spending for and on behalf of Scotland.

It said that revenue had grown by £6.3bn to £98.3bn, an increase of 6.9%, while there was a slower growth in expenditure, which rose by £5.7bn to £123.6bn - an increase of 4.8%.

The largest increases in revenue came from national insurance contributions, which were up by £2.4bn, and income tax receipts, up by £1.5bn.

The expenditure of £123.6bn is the amount spent by the Scottish, UK and local governments north of the border - as well as a share of spending on shared provision such as defence and debt.

Overall North Sea oil and gas revenue fell for the third consecutive year - down to £3.9bn from £4.5bn. Scotland's geographical share of that revenue fell from £3.6bn to £3.2bn

Spending per person in Scotland was £22,281 - £2,720 higher than the rate per person in the UK.

The report says some of that difference can be explained by the fact that water and sewage services are publicly funded in Scotland, unlike in England and Wales.

It also found that public spending in Scotland remained at a historic high, rising by £5.7bn to £123.6bn - almost nine percentage points higher than before the Covid pandemic.

Social protection, including state pensions and benefits, accounted for almost a third of the expenditure, rising by £2.1bn to £36.5bn.

Spending on health increased by £1.5bn to £21.1bn, making up 17% of expenditure.

Deputy First Minister and Finance Secretary Jenny Gilruth said the figures showed that her government was "delivering sustainable finances".

"The significant increase in income tax revenues shows that the decisions which this government has taken are helping to deliver additional funding for measures to ease the cost of living like the Scottish Child Payment, free prescriptions, bus travel for under-22s and free university education," she said.

Gilruth cautioned that the report "simply does not show what an independent Scotland's position will be", and said that with independence Scotland would be able to reach its "full potential".

Scottish Secretary Douglas Alexander said: "These statistics clearly demonstrate the value to people in Scotland of being part of a strong United Kingdom.

"By pooling and sharing resources across the country, people living in Scotland benefit from significant additional public spending.

"That means £2,720 more per person compared to the UK average, which the Scottish government can spend on vital services like schools, hospitals and transport."

Scottish Conservative finance spokesman Craig Hoy said the figures showed "every single Scot is over £2,700 better off because we are part of a strong United Kingdom".

He said independence "would be disastrous for the nation's finances".

Hoy added that the report underlined the need for the Scottish and UK governments "to finally back plans to get Britain drilling again".