THIS morning sees the release of the Scottish Government's latest Government Expenditure and Revenue Scotland (GERS) report.

Published every year towards the end of August, the report aims to estimate the revenue raised in Scotland through taxes and compares it to the amount that is spent on public services.

It covers the most recent tax year which ends in April and this year (2020/21) will reflect the challenges and spending that have come abou as a result of the coronavirus pandemic.

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It also includes UK Government spending in non-devolved areas in Scotland including the likes of defence and allocates a proportion of the UK's debt payments to Scotland.

When did it start?

GERS began in 1992 when the figures were first published under then-UK PM John Major.

It was at the time thought by Tory ministers that the report would make the case against the establishment of a Scottish Parliament due to oil prices being low and hopes that it would show what Scotland gains from the UK Treasury.

Since devolution in 1999, figures have been compiled by the Scottish Government.

Despite an annual political debate to interpret the figures, it is only meant to be a way of showing the current position of Scottish finances and not influenced by government ministers.

How is GERS calculated?

The report is compiled by Scottish Government statisticians and the data on spending is not estimated but some UK spending in Scotland is allocated on a proportional basis.

There have been complaints in the past about the fact that full spending figures in GERS have to be estimated due to the UK figures included.

The revenue side of the figures includes money raised by Scotland through the likes of income tax, council tax, business rates, taxes from landfills, the profits made by Scottish Water and building and transaction tax and local authority user charges and fees.

Estimation is needed on revenues gathered through the likes of HMRC.

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The figures are compiled independently of Scottish Government ministers and are assessed by the UK Statistics Authority as being in line with the Code of Practice for Offical Statistics, meaning they are free of political interference.

What can we expect from today's report?

The Fraser of Allander Institute at Strathclyde University has forecasted that Scotland's notional fiscal deficit is expected to increase this year.

Mairi Spowage, the institute's director, made the forecast yesterday, saying that the notional deficit is likely to 21% of the total economic output in the year to April 2021.

Last year Gers put the notional deficit at 8.6%.

Spowage said: "Typically, when considering the difference between the onshore Scottish net fiscal balance (excluding oil revenues) and the UK figure, there is around a seven percentage point gap between the UK and Scottish figures.

“In recent years, oil revenues have declined to the extent that they are not hugely significant in closing this gap: oil revenues are likely to be around £300 million in the latest year, compared to a high of around £10 billion in 2008-09.

“The latest figures for the UK for 2020-21 is a deficit of 14% of GDP, so all else being equal we can expect that the figure for Scotland will be around 21% of GDP.”

What's the problem with GERS?

GERS figures are supposed to show the gap between public spending and tax revenue, but are often thought of as misleading by Yes supporters.

While Unionist commentators are keen to use the figures to downplays Scotland's potential as an independent country, pro-independence figures have long argued that is an unfair representation.

Professor Richard Murphy, an adviser and commentator on economics and tax, describes the figures as "CRAp" - standing for "Completely Rubbish APproximation".

Former Scottish finance secretary Derek Mackay told Holyrood magazine in 2020 that the Government would launch a new pro-independence GERS, saying he felt "frustrated" that the data only covers Scotland's place in the Union, not its potential as independent country.

Speaking last year, a Scottish Government spokesperson said: “The GERS publication explicitly states that it shows Scotland’s position within the UK and not as an independent nation. We will ensure people have the information they need to make informed choices over the future of the country.”