Scottish Budget 2025 to 2026

Foreword

by the Cabinet Secretary for Finance and Local Government

This is a Budget by Scotland, for Scotland.

A Budget for progress. A Budget to renew public services and invest in the nation’s priorities. A Budget that, most importantly, can bring some hope.

This Budget aims to create the conditions for every person in Scotland to thrive. To do that we have listened to people, met with businesses and charities, and engaged with our frontline public services professionals.

We have spoken to every political party in the Scottish Parliament, to understand their priorities and where we can find collective common ground.

We recognise that in a parliament of minorities, compromise is needed. Our aim is for a Budget that, while it may not meet all that we would want, can command broad support to help improve the lives of the people of Scotland.

Most importantly, by listening to the priorities of the people, it preserves the social contract between Scottish citizens and the state that has been at the heart of everything we do. And it builds on this social contract where everyone should expect a level of support, with helping hands for the most vulnerable in society. We will build a nation with fairness at its core.

This Budget will centre on this government’s priorities to:

• eradicate child poverty
• grow the economy
• tackle the climate emergency
• ensure high quality and sustainable public services

This Budget delivers against each of these four priorities. It will – with the consent of the Scottish Parliament – underpin the commitments that we set out in the Programme for Government. And it goes further, with new support for vulnerable pensioners, and action to effectively scrap the cruel two-child cap for families on Universal Credit.

In this Budget, we recognise the importance of the economy, and of growth, to Scotland. After all, a thriving economy is an essential requirement if we are to build the sort of country Scotland can and should be. The money we commit through this Budget will enable us to make the most of the economic opportunities available to Scotland. And it will allow us to make real, tangible progress in the fight against climate change.

Through this Budget we will:

• deliver a record investment of £21 billion in health and social care, including an increase in our capital spending power of £139 million from 2024-25;
• increase capacity and access to Primary Care to shift the balance of care to preventative and community-based support and substantially reduce delayed discharges by working with local health and social care partnerships;
• commit to matching the UK Government by raising the earnings threshold for Carer Support Payment and Carer’s Allowance to £196, which means carers can earn an extra £45 a week whilst receiving these benefits;
• provide £768 million for affordable homes, enabling over 8000 new properties for social rent, mid-market rent and low-cost home ownership to be built this coming year;
• restore a universal winter heating payment to every pensioner household;
• develop the systems necessary to effectively scrap the impact of the two child cap in 2026;
• raise the basic and intermediate tax thresholds by 3.5%, effectively twice the rate of inflation;
• allocate £25 million to increase the number of jobs available in the green energy supply chain here in Scotland;
• deliver £3 million for a Bright Start Breakfasts pilot, which will test the delivery of free breakfast clubs and kick start more breakfast delivery across Scotland;
• maintain £4 million of support to reflect the higher costs of delivering services in our island communities. This Budget also provides enhanced revenue support for ferry services operated by councils, along with £20 million one-off capital funding for Orkney Islands Council and Shetland Islands Council to enable them to sustain and improve inter-island connectivity;
• invest in early learning and childcare. Our investment of almost £1 billion will ensure that all staff in the sector are paid at least the real living wage from April. It will also support the ongoing provision of 1,140 hours of affordable, high‑quality early learning and childcare services to all 3- and 4-year-olds, and eligible 2-year-olds;
• deliver a £34 million uplift to the culture budget this year; and
• take forward concrete action on climate change, including £40 million of funding to local government for a climate emergency fund.

This Budget is also affordable and sustainable. We have balanced the Budget every year for the past 14 years in government, and this Budget will be balanced as well.

It is because of our prudent management of the public finances that this Budget can afford to allocate over £300 million of ScotWind revenues to investments in Scotland. The benefits of this will be felt by local communities directly, right across the country, for generations to come.

I am proud of this Budget, and of what it could achieve for Scotland. But it can only succeed with the support of the Scottish Parliament, to enable a brighter future, and the investment that Scotland deserves.

Shona Robison MSP, Cabinet Secretary for Finance and Local Government