Scottish Budget 2025-26 | Scottish Parliament

Scottish Budget 2025-26

Author: Ross Burnside, Ailsa Burn-Murdoch, Kelly Eagle, Andrew Feeney-Seale, Nicola Hudson, Greig Liddell, Rob Watts

PDF Published: Friday 06 Dec 2024 (SB 24-55)

This chart highlights how the percentage change in the budget is influenced by the baseline used. Health and Social Care, Finance and Local Government and Education and Skills show particularly large differences depending on the approach.

Image: Difference in portfolio resource percentage change depending on baseline, real terms

Chart showing the allocation of the total budget (Total Managed Expenditure) by Resource, Capital, AME and Non-cash. TME will rise in real terms by 1.8% in 2025-26. Within that, Resource (day-to-day spend on salaries and public service delivery) will increase by 4.0%, and capital spending (on infrastructure like building roads, schools and hospitals) will rise by 12%.

Image: Figure 2: Allocation of TME

The Scottish Government identify £4.9 billion in resource and capital spending which will have a positive impact on their climate goals. This includes the £786 million affordable housing budget, £468 million for bus services, £349 million for energy efficiency, £342 million for ferries, £189 million for active travel, £168 million for land and forestry, £150 million for the offshore supply chain, and £44 million for energy industries

Image: Figure 16: Total capital budget, 2025-26, £ million

The Scottish Government identify £4.9 billion in resource and capital spending which will have a positive impact on their climate goals. This includes the £786 million affordable housing budget, £468 million for bus services, £349 million for energy efficiency, £342 million for ferries, £189 million for active travel, £168 million for land and forestry, £150 million for the offshore supply chain, and £44 million for energy industries

Image: Figure 18: Key policy and budget allocations expected to contribute to meeting the Scottish Government climate goals in 2025-26

Infographic showing porfolios with primary indicators and performance against them

Image: Figure 24: Performance change in national outcomes, by portfolio

This chart highlights how the percentage change in the budget is influenced by the baseline used. Health and Social Care, Finance and Local Government and Education and Skills show particularly large differences depending on the approach.

Image: Figure 1: Difference in percentage change in resource budgets depending on baseline (% change, real terms)

Chart showing the relative size of portfolio resource allocations and how they have changed in both, cash and real terms between 2024-25 and 2025-26.

Image: Figure 3: Resource Budget portfolio changes in 2025-26 without ABR 2024-25 internal transfers

Figure showing allocations of resource and capital spending by portfolio area

Image: Figure 4: Resource and Capital allocations by portfolio area

The basic property rate on properties with a rateable value up to and including £51,000 remains at 49.8 pence for 2025-26. The intermediate property rate (for rateable values between £51,001 and £100,000 will increase to 55.4 pence, and the higher property rate for rateable values above £100,000 will increase to 56.8 pence.

Image: Figure 6: Non-domestic rates and thresholds, 2023-24 to 2025-26

Chart showing the SFC forecasts for spending in 2025-26 on each Scottish benefit. Total spend on devolved social security is forecast to be £6,857 million in 2025-26.

Image: Figure 10: Devolved Social Security spend for 2025-26

Chart showing the SFC's forecast of Scottish GDP, 2024-25 to 2029-30. GDP forecasts are up on this time last year across the forecast period. GDP growth is forecast to peak at 1.6% in 2025-26 before falling back to its trend rate of 1.4% from 2027-28.

Image: Figure 11: Gross Domestic Product (GDP) growth, Scotland, 2024-25 to 2029-30

Chart showing the average annual GDP growth gap between Scotland and the UK. Between 2010-11 and 2019-20, Scottish GDP grew more slowly, with an average annual gap of 0.44 percentage points. However, on a per person basis, this gap is only 0.06 percentage points. The forecast for 2025-26 to 2029-30 shows a 0.24 percentage point gap in GDP growth and a positive 0.05 percentage point gap in GDP per person growth.

Image: Figure 12: Scotland-UK average annual GDP growth gap, outturn and forecast, percentage points

Chart showing real terms disposable income per person in Scotland, 2016-17 to 2028-29. In the short term, the SFC have revised up living standards, but beyond 2026-27, the forecasts are largely unchanged.

Image: Figure 13: Real disposable income per person, Scotland, 2021-22 equals 100

Chart showing CPI inflation since 2021 and forecasts to 2029. The outturn for inflation has been lower than forecast in December 2023, but the outlook in future years forecasts higher inflation than previously expected. It is now forecast to reach 2.6% in 2025-26.

Image: Figure 14: CPI inflation, year-on-year growth

Chart showing the SFC's forecast of Scotland's unemployment rate and the OBR's forecast of the UK's unemployment rate, 2021-22 to 2029-30. Unemployment is forecast to be lower in Scotland throughout the forecast period and settling around its trend rate of 4.1%.

Image: Figure 15: Unemployment rate, Scotland and UK 2021-22 to 2029-30

While the capital budget increases significantly in 2025-26, thereafter the Scottish Government expect it to be flat in nominal terms, or to decline slightly in cash terms. The UK Government spending review in 2025 is likely to change this forecast.

Image: Figure 17: Capital funding forecast (excluding financial transactions), 2024-25 to 2029-30

Greenhouse gas emissions associated with the Scottish Budget have fluctuated from year to year since 2010-11, but are higher now in absolute terms since the first assessment.

Image: Figure 19: Greenhouse gas emissions associated with Scottish budgets, 2010-11 to 2025-26

While greenhouse gas emissions associated with the 2025-26 budget are higher than in previous years, when we account for the growing size of the budget this is not the case. Adjusting the size of the budget to account for inflation gives a more accurate picture of the 'carbon intensity' of spending associated with the Scottish Budget.

Image: Figure 20: Carbon intensity of Scottish Budgets, total emissions compared to Total Managed Expenditure, since 2010-11

Chart showing income tax net position forecasts for 2024-25 to 2028-29. Latest Scottish Fiscal Commission forecasts show the gap between expected income tax revenues and the equivalent block grant adjustment widening from £255 million in 2024-25 to £932 million 2028-29. However, this is significantly lower than forecasted last year.

Image: Figure 5: Income tax net position

The Scottish Fiscal Commission forecast that income from Non-domestic rates will slightly fall in 2025-26 and then grow each year to reach around £3.9 billion by 2029-30. The fall in 2025-26 is partly due to policy changes (hospitality relief and freezing thresholds).

Image: Figure 7: Forecast income from non-domestic rates

Income from Land and Buildings Transaction Tax is forecast to exceed £1 billion in 2025-26 and continue to grow throughout the forecast period to 2029-30

Image: Figure 8: Forecast income from Land and Buildings Transaction Tax

The Scottish Landfill Tax forecast shows a material reduction in revenues as it is expected that less waste will be sent to landfill as a result of the tax. In 2025-26, SLfT is expected to raise £40 million, then fall to an average of £25 million for the four years to 2029-30.

Image: Figure 9: Forecast income from Scottish Landfill Tax

Since 2024-25, there has been a small shift from neutral spending to posisitive spending. However, nearly half of all assessed capital is still classified as neutral.

Image: Figure 21: Capital spending taxonomy, 2025-26

The five largest portfolio capital budgets are Transport, Healthcare, Social Justice, Net Zero, and Deputy First Minister, Economy and Gaelic. The majority of positive capital spending is concentraed in transport (69.5%), Social Justice (75.1%) and Net Zero (77.7%).

Image: Figure 22: Five largest portfolio capital budgets, 2025-26

Like in 2024-25, the vast majority of resource spending is categorised as neutral - indeed the proportion has increased slightly from 92% to 93%.

Image: Figure 23: Resource spending taxonomy, 2025-26

Last Updated: 14/5 1:06pm

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