Scottish Budget 2025 to 2026
The Scottish Budget sets out the Scottish Government’s proposed spending and tax plans for 2025 to 2026, as presented to the Scottish Parliament.
Chapter 4 Finance & Local Government
Portfolio Responsibilities
Finance and Local Government is focused on enabling our public services to become more sustainable and resilient to ensure they best meet the needs of people and communities across Scotland. The portfolio is responsible for delivering sound public finances and a balanced budget; and supporting our partnership with local government.
The total Local Government settlement (Table 4.12) sets out that Local Government funding has increased by over £1 billion from 2024-25 to 2025-26. This includes a £289 million increase in the General Revenue Grant to deliver real terms protection, but also gives increased funding for Additional Support for Learning , free school meals, and the school workforce among other measures.
This budget supports the Exchequer in raising circa £24.6 billion of revenue for our public services; work to introduce a Scottish Building Safety Levy, expected to raise £30 million per annum for cladding remediation; and the development of a Scottish Bond. Finance and Local Government will also support the government’s ambitious ten-year programme of public service reform (PSR), as well as investing in our planning system, and providing funding for local government and the Scottish Public Pensions Agency.
We will continue to progress the delivery of the New Deal with Local Government to support the alignment of our shared priorities and enhance the fiscal empowerment of local government through work on a fiscal framework, progressing plans to deliver new revenue raising powers, and agree streamlined accountability and assurance arrangements. Through delivering Public Service Reform we will improve outcomes, reduce inequalities and contribute to fiscal sustainability. We will work with partners to create enabling structures for PSR, progressing the Local Governance Review and strengthening Community Planning Partnerships to support a shift to preventative services. We will support the development of whole family approaches, underpinned by our commitment to flexibility, streamlined reporting and co-design.
Investment in planning will help to ensure that our system has the resources, skills and resilience to facilitate the delivery of more quality homes in the right places and improve planning and consenting for renewable energy generation and electricity transmission. As part of our Planning and Housing Emergency Delivery Plan we will establish a Housing Planning Hub to help unblock major developments which have stalled within the system to help deliver and support the provision of affordable homes that meet the needs of our communities. We will continue to work with the National Planning Improvement Champion to help deliver efficiencies and improved performance in planning services to help to make Scotland a more attractive place to invest. We will also invest in new talent by launching our graduate programme and trebling the number of bursaries offered to planning students which will help create a pipeline of future planners.
The 2025-26 spending plans for the Finance and Local Government portfolio are key to improving both outcomes and the equality of outcomes for people and communities across Scotland; helping to improve public services, deliver fiscal sustainability, and contribute to the eradication of child poverty.
Finance and Local Government intended contributions to the National Outcomes
Primary National Outcomes
- Communities
- Poverty
- Economy
- Environment
- Fair Work and Business
Secondary National Outcomes
- Children and Young People
For further information on the purpose of the portfolio budget, and contributions to national outcomes (including impacts of spend on equality of outcome) please refer to the relevant portfolio annex in the published Equality and Fairer Scotland Budget Statement.
Finance & Local Government
The prior year 2024-25 Budget comparator figures are based on the latest in-year budget numbers which were revised at the Autumn Budget Revision. The 2023-24 Scottish Budget comparator figures reflect the outturn numbers for that year.
| Level 2 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Local Government | 13,667.7 | 14,005.0 | 13,575.7 |
| Scottish Public Pensions Agency | 3,241.4 | 3,548.3 | 2,952.2 |
| Finance | 73.0 | 66.1 | 58.7 |
| Planning | 10.5 | 6.9 | 9.6 |
| Governance and Reform | 3.8 | 5.2 | 35.4 |
| Consumer Policy and Advice | 2.3 | 1.6 | 1.4 |
| Accountant In Bankruptcy | 1.8 | 2.4 | 3.0 |
| Registers of Scotland | 10.4 | 10.0 | 5.0 |
| Revenue Scotland | 8.4 | 11.0 | 12.0 |
| Scottish Fiscal Commission | 2.4 | 2.7 | 2.8 |
| Consumer Scotland | 2.3 | 4.1 | 4.1 |
| Corporate Running Costs | 203.7 | 200.8 | 207.9 |
| Financial Transactions Repayments | – | 25.0 | 25.0 |
| Total Finance and Local Government | 17,227.6 | 17,889.0 | 16,892.7 |
| of which | |||
| Total Fiscal Resource | 10,039.0 | 10,596.8 | 10,052.7 |
| of which Operating Costs | 250.9 | 241.2 | 255.7 |
| Non-cash | 22.4 | 22.9 | 13.0 |
| Capital | 905.5 | 660.0 | 771.2 |
| Financial Transactions (FTs) | (0.1) | 25.0 | 25.0 |
| UK Funded AME | 6,260.8 | 6,584.4 | 6,030.9 |
| Total Limit on Income (accruing resources) | – |
| Revenue Scotland - shown separately | (8.4) | (11.0) | (12.0) |
|---|---|---|---|
| Scottish Fiscal Commission- shown separately | (2.4) | (2.7) | (2.8) |
| Registers of Scotland - shown separately | (10.4) | (10.0) | (5.0) |
| Consumer Scotland - shown separately | (2.3) | (4.1) | (4.1) |
| Scottish Futures Trust (NDPB non-cash) | (0.5) | – | – |
| Central Government Grants to Local Authorities returned to portfolios (E&S, Justice and NZET) | (403.3) | (355.5) | (375.8) |
| NHS and Teacher's Pensions - shown separately | (3,210.0) | (3,516.3) | (2,916.3) |
| Total Finance and Local Government | 13,590.4 | 13,989.4 | 13,576.8 |
| Total Limit on Income (accruing resources) | 400.0 |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Agency Administration | 31.3 | 31.9 | 35.9 |
| Scottish Teachers Pension Schemes | 1,159.4 | 1,430.0 | 1,035.6 |
| NHS Pension Scheme | 2,050.6 | 2,086.4 | 1,880.7 |
| Total SPPA | 3,241.4 | 3,548.3 | 2,952.2 |
| of which | |||
| Fiscal Resource | 26.9 | 23.2 | 30.6 |
| Non-cash | 1.4 | 6.0 | 2.5 |
| Capital | 3.0 | 2.7 | 2.8 |
| FTs | – | – | – |
| UK Funded AME | 3,210.0 | 3,516.3 | 2,916.3 |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Scotland Act Implementation | 1.6 | 3.0 | 4.0 |
| Extension of Freedom of Information Coverage | – | – | – |
| Procurement Shared Services | 22.1 | 18.1 | 18.0 |
| Exchequer & Finance | 8.0 | 9.6 | 11.8 |
| Scottish Government Capital Projects | 20.2 | 23.9 | 16.1 |
| Public Information & Engagement | 9.5 | 5.3 | 5.0 |
| Scottish Futures Trust | 11.6 | 6.2 | 3.8 |
| Total Finance | 73.0 | 66.1 | 58.7 |
| of which | |||
| Fiscal Resource | 49.7 | 42.5 | 42.5 |
| Non-cash | 15.3 | 10.9 | 4.1 |
| Capital | 4.9 | 12.7 | 12.1 |
| FTs | – | – | – |
| UK Funded AME | 3.3 | – | – |
*Resource cost of borrowing no longer shown as part of the Finance and Economy portfolio and is instead shown as a deduction against total funding
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Planning | 9.9 | 6.3 | 9.0 |
| Planning & Environmental Appeals | 0.6 | 0.6 | 0.6 |
| Total Planning | 10.5 | 6.9 | 9.6 |
| of which | |||
| Fiscal Resource | 6.7 | 6.9 | 9.6 |
| Non-cash | – | – | – |
| Capital | 3.7 | – | – |
| FTs | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Public Service Reform & Community Empowerment | 3.3 | 5.2 | 35.4 |
| Covid Recovery | 0.5 | – | – |
| Total Governance & Reform | 3.8 | 5.2 | 35.4 |
| of which | |||
| Total Fiscal Resource | 3.8 | 5.2 | 35.4 |
| Non-cash | – | – | – |
| Capital | – | – | – |
| FTs | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Consumer Policy & Advice | 2.3 | 1.6 | 1.4 |
| Total Consumer Policy & Advice | 2.3 | 1.6 | 1.4 |
| of which | |||
| Fiscal Resource | 2.3 | 1.6 | 1.4 |
| Non-cash | – | – | – |
| Capital | – | – | – |
| FTs | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Accountant in Bankruptcy | 1.8 | 2.4 | 3.0 |
| Total Accountant in Bankruptcy | 1.8 | 2.4 | 3.0 |
| of which | |||
| Fiscal Resource | (0.1) | 0.3 | 0.5 |
| Non-cash | 1.2 | 1.0 | 1.4 |
| Capital | 0.7 | 1.1 | 1.1 |
| FTs | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Registers of Scotland | 10.4 | 10.0 | 5.0 |
| Total Registers of Scotland | 10.4 | 10.0 | 5.0 |
| of which | |||
| Fiscal Resource | – | – | – |
| Non-cash | 3.9 | 4.2 | 4.3 |
| Capital | 6.1 | 5.8 | 0.7 |
| FTs | – | – | – |
| UK Funded AME | 0.5 | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Revenue Scotland | 8.4 | 11.0 | 12.0 |
| Total Revenue Scotland | 8.4 | 11.0 | 12.0 |
| of which | |||
| Fiscal Resource | 7.3 | 8.9 | 9.5 |
| Non-cash | 0.6 | 0.6 | 0.8 |
| Capital | 0.5 | 1.5 | 1.8 |
| FTs | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Scottish Fiscal Commission | 2.4 | 2.7 | 2.8 |
| Total Scottish Fiscal Commission | 2.4 | 2.7 | 2.8 |
| of which | |||
| Fiscal Resource | 2.3 | 2.7 | 2.8 |
| Non-cash | 0.1 | – | – |
| Capital | – | – | – |
| FTs | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Consumer Scotland | 2.3 | 4.1 | 4.1 |
| Total Consumer Scotland | 2.3 | 4.1 | 4.1 |
| of which | |||
| Fiscal Resource | 2.3 | 3.4 | 3.5 |
| Non-cash | – | 0.1 | – |
| Capital | – | 0.7 | 0.6 |
| FTs | – | – | – |
| UK Funded AME | – | – | – |
| 2023-24 £m | 2024-25 £m | 2025-26 £m | |
|---|---|---|---|
| Local Government Budget Settlement (Table 4.13)* | 13,664.7 | 14,001.7 | 13,571.9 |
| ABR/SBR Adjustment | (1,985.1) | (1,549.0) | |
| Baseline Restatement | 432.0 | 244.5 | |
| Total | 12,111.6 | 12,697.2 | 13,571.9 |
| Additional Support for Learning | 15.0 | 15.0 | 43.0 |
| Additional Adult Social Workers | 22.0 | 22.0 | 22.0 |
| Appropriate Adults | 1.0 | 1.0 | 1.0 |
| Building Standards Fees | (1.5) | (1.5) | (2.1) |
| Care at Home | 124.0 | 124.0 | 124.0 |
| Carer's Act | 60.5 | 60.5 | 60.5 |
| Children's Social Care Workforce Development | – | – | 33.0 |
| Discretionary Housing Payments | 85.9 | 92.7 | 99.2 |
| Early Learning and Childcare (ELC) Private and Third Sector Pay | – | – | 25.7 |
| Educational Psychologists | (0.9) | (0.9) | (0.9) |
| Free School Meals Intervention | 16.0 | 22.0 | 37.0 |
| Free School Meals Support for Debt | 1.5 | – | – |
| Free School Meals (Holiday Provision) | 21.8 | 21.8 | 21.8 |
| Health and Social Care | 257.2 | 257.2 | 257.2 |
| Health, Social Care and Mental Health | 120.0 | 120.0 | 120.0 |
| Homelessness Prevention Fund | 30.5 | 30.5 | 30.5 |
| Local Government Attainment Grants | 10.0 | 10.5 | 10.6 |
| Mental Health Recovery and Renewal | 3.7 | – | – |
| Rapid Rehousing Transition Plans | 8.0 | 8.0 | 8.0 |
| Removal of Curriculum Charges | 8.0 | 8.0 | 8.0 |
| Removal of Music Tuition Charges | 12.0 | 12.0 | 12.0 |
| School Clothing Grant | 13.0 | 13.9 | 13.9 |
| School Counselling | 4.0 | 4.0 | 4.0 |
| School Workforce | 145.5 | 145.5 | 186.5 |
| Scottish Disability Assistance – Child Disability Payment | 4.6 | 3.5 | 3.2 |
| Scottish Welfare Fund | 40.9 | 40.9 | 40.9 |
| Self-Directed Support | 3.5 | 3.7 | 3.7 |
| Sensory Impairment | 0.3 | 0.3 | 0.3 |
| Whole Family Wellbeing Fund | 32.0 | 32.0 | 32.0 |
| Teachers Pay | – | 242.0 | 242.0 |
| Tobacco Relates Issues | 1.3 | 1.3 | 1.3 |
| Total Revenue Funding within other Portfolios | 1,039.8 | 1,289.9 | 1,438.3 |
| Playpark Renewal | – | – | 25.0 |
| Expansion of Free School Meals | 80.0 | 40.0 | – |
| Total Capital Funding within other Portfolios | 80.0 | 40.0 | 25.0 |
| Total Local Government Settlement | 13,231.4 | 14,027.1 | 15,035.2 |
* This can be derived from Table 4.13 by removing Local Government Advice and Policy.
| 2023-24 £m | 2024-25 £m | 2025-26 £m | |
|---|---|---|---|
| Blue Badge Scheme | 0.7 | – | – |
| Community Justice Partnership Funding | 2.0 | – | – |
| Former Housing Support | 1.0 | – | – |
| Free Personal and Nursing Care | 42.3 | – | – |
| Free Sanitary Products in Public Places | 2.8 | – | – |
| Free Sanitary Products in Schools | 2.1 | – | – |
| Free School Meals Intervention | 42.2 | – | – |
| Living Wage | 333.5 | – | – |
| Local Heat and Energy Efficiency Strategies | 2.4 | – | – |
| Customer First Digital Public Services | 1.4 | 1.4 | 1.4 |
| National Trauma Training | 1.6 | 1.6 | 1.6 |
| 2024 Teachers Pay | – | – | 43.0 |
| Community Mental Health & Welbeing | – | – | 15.0 |
| Living Wage | – | 230.0 | 125.0 |
| 2024-25 Free Personal and Nursing Care | – | 11.5 | 10.0 |
The funding lines above are now baselined into the General Revenue Grant and restated in prior years
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| General Revenue Grant | 9,469.3 | 10,034.8 | 9,458.4 |
| Non-Domestic Rates | 3,047.0 | 3,068.0 | 3,114.0 |
| General Capital Grant | 736.9 | 538.4 | 556.0 |
| Specific Resource Grants | 261.8 | 263.3 | 247.4 |
| Specific Capital Grants | 149.7 | 97.2 | 196.1 |
| Local Government Advice and Policy | 3.0 | 3.3 | 3.8 |
| Total Local Government | 13,667.7 | 14,005.0 | 13,575.7 |
| of which | |||
| Fiscal Resource | 9,734.1 | 10,301.4 | 9,709.6 |
| Non-cash | – | – | – |
| Capital | 886.6 | 635.6 | 752.1 |
| FTs | – | – | – |
| UK Funded AME | 3,047.0 | 3,068.0 | 3,114.0 |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Criminal Justice Social Work | 85.0 | 86.5 | 86.5 |
| Gaelic | 4.5 | 4.5 | 4.5 |
| Local Government Attainment Grant | 130.6 | 130.6 | 120.0 |
| Inter-Island Connectivity* | 41.7 | 41.7 | 36.4 |
| Total Specific Revenue Grants | 261.8 | 263.3 | 247.4 |
| Vacant and Derelict Land | 7.6 | 5.0 | 7.6 |
| Transfer of Management of Development Funding (TMDF) | 92.2 | 92.2 | 92.2 |
| Regional Transport Partnership | 15.3 | – | 12.4 |
| Cycling Walking and Safer Routes | 34.6 | – | 23.9 |
| Inter-Island Connectivity | – | – | 20.0 |
| Climate Emergency | – | – | 40.0 |
| Total Specific Capital Grants | 149.7 | 97.2 | 196.1 |
* Formerly Inter-Island Ferries
Table 4.15: Estimated Local Government Funding outwith Core Settlement
In previous years, the funding that is estimated to flow to Local Government during the financial year outwith the core Local Government Settlement was published in the budget document (A2.17 in 2024-25). The published figures represent best estimates at the time of the Scottish Government Budget although the actual sums payable will be notified by the relevant policy team at the earliest opportunity. In order to ensure the data represents the most accurate estimation at the time of the budget, the data has been removed from the budget document and will be published as supplementary disclosure.
Contact
Email: ScottishBudget@gov.scot
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