Behind the numbers – GERS and Scotland’s £5.1bn defence

The publication of the latest Government Expenditure and Revenue Scotland (GERS) report has once again opened up debate about defence spending.

At the centre of the argument are two headline figures.

The first is the £5.1 billion that GERS allocates to Scotland for 2024–25 as its share of UK defence spending. The second is the £2.1 billion which represents the amount of defence procurement that the Ministry of Defence placed with industry in Scotland during 2023–24.

On the face of it the gap looks stark. For those in favour of independence it is proof that Scotland is not receiving value for money. For others it is evidence that critics of the GERS methodology are being selective in their use of statistics. Both figures, however, are constructed in different ways and they answer different questions.

The GERS accounts are not a record of money physically spent in Scotland. They are produced by the Scottish Government as an estimate of the country’s public finances within the UK. For reserved areas such as defence, the report allocates spending on the basis of Scotland’s population share. The result is the £5.1 billion figure, which is designed to capture the value of services provided to Scotland as part of the UK’s armed forces. This covers every aspect of defence, from procurement and operations to research, personnel and the nuclear deterrent.

The £2.1 billion number is narrower. It comes from Ministry of Defence accounts of procurement and represents contracts placed with companies in Scotland. That figure captures the economic value of jobs supported at the Clyde shipyards, where Type 26 frigates are under construction, or at Leonardo in Edinburgh, which builds radar systems. It has a direct and visible impact on the Scottish economy, which is why it is so often highlighted in political debate. But it does not include the salaries of service personnel, the cost of maintaining Faslane or RAF Lossiemouth, or the wider resources devoted to operations and capabilities that are located elsewhere but which still contribute to Scotland’s security.

This is where the distinction matters. The £5.1 billion does include spending that is not based in Scotland, yet that spending still plays a direct role in defending Scotland. RAF aircraft based in England provide air policing for the North Sea approaches. The Royal Navy’s carrier strike group, although based in Portsmouth and Devonport, provides deterrence for the whole of the UK. Trident submarines are stationed at Faslane, but the supporting facilities in England are essential parts of the system. Contributions to NATO operations in the North Atlantic and Baltic are funded across the UK but secure Scottish sea lanes and approaches as much as they do for any other part of the country.

Critics of the £2.1 billion figure, such as Ian Murray, the Secretary of State for Scotland, argue that presenting procurement spending alone as the total defence benefit to Scotland is misleading. Defence is a UK-wide system that cannot be broken into neat local accounts.

The problem is that neither figure on its own provides a complete picture. The £2.1 billion reflects real procurement with Scottish industry but ignores personnel and infrastructure. The £5.1 billion captures the full range of services Scotland receives as part of the UK’s defence system but does not translate into direct economic activity within Scotland.

A fuller account would recognise the importance of procurement, jobs, and industry in Scotland while also acknowledging the integrated nature of defence. The security of Scotland rests not only on frigates built on the Clyde or Typhoons at Lossiemouth, but also on aircraft flying from Lincolnshire, naval groups sailing from Portsmouth and collective NATO operations in the High North. The GERS allocation is intended to capture that wider reality.

Scotland’s defence footprint is significant. Faslane is home to the nuclear deterrent. Lossiemouth is central to the UK’s maritime patrol and air policing mission. The Clyde shipyards are building some of the Royal Navy’s most advanced warships. These activities represent billions of pounds of investment and thousands of jobs. Yet the full cost and value of these activities are woven into UK-wide totals and are not broken down in the GERS tables, which contributes to the perception gap between notional allocations and visible spending.

The latest row shows how defence figures can be pulled into political argument without the necessary context. Scotland does not receive a cheque for £5.1 billion, but nor does its security depend only on the £2.1 billion of local procurement. Both numbers are partial reflections of a much more complex picture. The truth is that defence spending outside Scotland contributes directly to Scotland’s safety.