The 2016 GERS figures should prove thought-provoking reading for taxpayers and users of our public services in Scotland.
The fiscal deficit is worryingly high and should force everyone in Scotland to ask a number of key questions.
We should question whether the significant injection of government money is actually working to support the wider economy.
The GERS figures show that Scotland is certainly not pursuing a policy of austerity, yet has an economic growth rate below the UK average.
GDP in Scotland increased by 1.5% while the UK increased by 2.0% over the year to 2016Q1. Whatever the opposite of austerity is, it does not appear to be working to bring growth.
Scotland’s public services are vitally important to us all and we need to ask if the services we receive are reflecting the money we are spending.
The government expenditure represented by these figure goes to areas such as social protection, health, policing and education.
All users of Scotland’s public services will want reassurance that we are getting good value for money and that there is efficient management.
This report comes at a time when the impact of Brexit is becoming clearer.
The short-term impact of the Brexit vote has confounded expectations. The lower value of the pound has provided a boost to the economy across retail sales, export manufacturing and tourism.
Within the GERS figures there are positive signs for the non-oil economy and this fall in the pound will strongly help sectors in Scotland such as tourism and manufacturers who export.
Government policy should build on these positive indicators and seek where possible to make sure the post-Brexit boost is maximised.
However, in considering Europe, we should ask why Scotland has a government deficit much higher than any other country in the EU.
We need to understand why our deficit is above that of the rest of the UK and considerably ahead of the rest of Europe.
The EU has a growth and stability pact which limits the deficit to less than 3% of GDP.
The EU has a policy of “austerity” built-in and Scotland’s current spending pattern does not fit comfortably with this EU policy.
David Gibbons-Wood is a senior lecturer in economics at Robert Gordon University.
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