Commentary on provisions of Act Section 20: Borrowing
This section provides the Scottish government Ministers with additional powers to borrow for certain purposes and increases the aggregate limits on borrowing for current and capital expenditure. The section gives effect to the agreement between the Scottish government and the UK government on the Scottish government’s fiscal framework. The values and circumstances of use of the borrowing powers are set out in that agreement.
	Subsection (1) amends sections 66 and 67 of the Scotland Act 1998, as amended by section 32 of the Scotland Act 2012.
	Subsection (2) amends section 66(1) (borrowing by the Scottish Ministers from the Secretary of State) of the Scotland Act 1998.
	Subsection (3) extends the number of reasons for Scottish Ministers to borrow.
	Subsection (4) extends revenues from the assignment of VAT to the taxes for which it is available to Scottish Ministers to borrow due to a shortfall in receipts.
	Subsection (5) adds two powers:
That Scottish Ministers can borrow where devolved welfare payments required to be paid exceed the forecast level of welfare payments.
That Scottish Ministers can borrow in the event of a Scotland-specific negative economic shock. This enables Scottish Ministers to borrow where there is an observed or forecast shortfall in tax receipts or increase in demand-led welfare. A negative economic shock is defined in the fiscal framework agreement as being triggered when onshore Scottish GDP growth is below 1% in absolute terms on a rolling 4 quarter basis, and 1 percentage point below UK GDP growth over the same period.
	Subsection (6) defines the welfare payments where Scottish Ministers will be allowed to borrow for a deviation from forecast levels.
	Subsection (7) raises the total limit on the amount of borrowing permitted to finance current expenditure from £500million to £1.75billion.
	Subsection (8) raises the total limit on the amount of borrowing permitted to finance capital expenditure from £2.2billion to £3billion.
	Subsection (9) sets out that the Treasury may by regulation set the commencement of the amendments in this section.
	Subsection (10) specifies that the regulation would be by statutory instrument.
	Subsection (11) specifies the procedure for making the commencement regulations.