Scottish Budget 2026-27 | Scottish Parliament

Scottish Budget 2026-27

Author: Ailsa Burn-Murdoch, Rachel Cook, Kelly Eagle, Andrew Feeny-Seale, Nicola Hudson, Greig Liddell and Rob Watts

PDF Published: Friday 16 Jan 2026 (SB 26-04)

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 2.6% in 2026-27. Within that, Resource (day-to-day spend on salaries and public service delivery) will increase by 2.4%, and capital spending (on infrastructure like building roads, schools and hospitals) will rise by 2%.

Image: Figure 2: Total Managed Expenditure

Figure showing allocations of resource and capital spending by portfolio area, with housing, climate action and energy and transport portfolios being the most capital-intensive.

Image: Figure 3: Resource and capital allocations by portfolio area

Chart showing changes in planned portfolio spend to 2028-29

Image: Figure 4: Real terms changes in portfolio spending

Chart showing SFC forecasts for all devolved taxes for 2025-26 to 2030-31. Income tax is by far the largest source of revenue, with forecast revenues of over £21 billion in 2026-27.

Image: Figure 20: Forecast tax revenues

The chart shows that the Scottish Government's total capital budget for 2026-27 is £7,568 million, the vast majority of which (£6,712 million) comes from the Core Barnett Settlement. The remainder is made up of smaller funding sources, including £491 million of borrowing, £245 million from financial transactions, and £120 million for City Deals.

Image: Figure 27: Total capital budget, 2026-27, £ million

The Scottish Government identify £5 billion in resource and capital spending which will have a positive impact on their climate goals. This includes the £926 million affordable housing budget, £3 billion for bus, rail and ferry networks and £335 million for energy efficiency.

Image: Figure 28: Key policy and budget allocations expected to contribute to meeting the Scottish Government climate goals in 2026-27

This chart highlights how the percentage change in the budget is influenced by the baseline used. Justice and Home Affairs, Finance and Local Government and Housing show particularly large differences depending on the baseline used.

Image: Figure 1: Baselines matter

Chart showing the SFC's forecast of Scottish GDP, 2025-26 to 2030-31. GDP forecasts are similar to last year's - with slightly lower growth forecast in the short term, but slightly higher trend growth (1.5% per year) in years 3 to 5 of the forecast.

Image: Figure 5: Forecasted growth domestic product (GDP) growth, Scotland, real terms, 2025-26 to 2030-31

Chart showing CPI inflation since 2021 and forecasts to 2029. After a small spike in 2025, inflation is forecast to settle at close to the Bank of England's 2% target by 2027.

Image: Figure 6: CPI inflation, year-on-year growth

Comparison of the SFC and OBR forecasts for nominal earnings growth 2026-27 to 2030-31. The OBR is less optimistic but recently uplifted its 2026-27 forecast substantially - from 2.1% growth to 3.2% growth.

Image: Figure 7: Forecasted nominal average earnings growth, SFC and OBR, 2026-27 to 2030-31

Chart showing the breakdown of allocations in the Health and Social Care portfolio, how they have changed in cash and real terms between 2024-25 and 2025-26, and both the five largest budget lines and five largest changes in level 3 budget figures

Image: Figure 8: Health and Social Care Budget 2026-27 at a glance

Chart showing the breakdown of allocations in the Finance and Local Government portfolio, how they have changed in cash and real terms between 2024-25 and 2025-26, and both the five largest budget lines and five largest changes in level 3 budget figures

Image: Figure 9: Finance and Local Government Budget 2026-27 at a glance

Chart showing the breakdown of allocations in the Social Justice portfolio, how they have changed in cash and real terms between 2024-25 and 2025-26, and both the five largest budget lines and five largest changes in level 3 budget figures

Image: Figure 10: Social Justice Budget 2026-27 at a glance

Chart showing the breakdown of allocations in the Education and Skills portfolio, how they have changed in cash and real terms between 2024-25 and 2025-26, and both the five largest budget lines and five largest changes in level 3 budget figures

Image: Figure 11: Education and Skills Budget 2026-27 at a glance

Chart showing the breakdown of allocations in the Justice and Home Affairs portfolio, how they have changed in cash and real terms between 2024-25 and 2025-26, and both the five largest budget lines and five largest changes in level 3 budget figures

Image: Figure 12: Justice and Home Affairs Budget 2026-27 at a glance

Chart showing the breakdown of allocations in the Transport portfolio, how they have changed in cash and real terms between 2024-25 and 2025-26, and both the five largest budget lines and five largest changes in level 3 budget figures

Image: Figure 13: Transport Budget 2026-27 at a glance

Chart showing the breakdown of allocations in the Deputy First Minister, Economy and Gaelic portfolio, how they have changed in cash and real terms between 2024-25 and 2025-26, and both the five largest budget lines and five largest changes in level 3 budget figures

Image: Figure 14: Deputy First Minister, Economy and Gaelic Budget 2026-27 at a glance

Chart showing the breakdown of allocations in the Housing portfolio, how they have changed in cash and real terms between 2024-25 and 2025-26, and both the five largest budget lines and five largest changes in level 3 budget figures

Image: Figure 15: Housing Budget 2026-27 at a glance

Chart showing the breakdown of allocations in the Rural Affairs, Land Reform and Islands portfolio, how they have changed in cash and real terms between 2024-25 and 2025-26, and both the five largest budget lines and five largest changes in level 3 budget figures

Image: Figure 16: Rural Affairs, Land Reform and Islands Budget 2026-27 at a glance

Chart showing the breakdown of allocations in the Climate Action and Energy portfolio, how they have changed in cash and real terms between 2024-25 and 2025-26, and both the five largest budget lines and five largest changes in level 3 budget figures

Image: Figure 17: Climate Action and Energy Budget 2026-27 at a glance

Chart showing the breakdown of allocations in the Constitution, External Affairs and Culture portfolio, how they have changed in cash and real terms between 2024-25 and 2025-26, and both the five largest budget lines and five largest changes in level 3 budget figures

Image: Figure 18: Constitution, External Affairs and Culture Budget 2026-27 at a glance

Shows the proportion of total local government revenue allocation that is either ring-fenced or transferred in year from other portfolios. This falls from 18% in 2023-24 to 7% in 2026-27.

Image: Figure 19: proportion of total revenue allocation either ring-fenced or transferred in-year

The basic property rate on properties with a rateable value up to and including £51,000 reduces to 8.1 pence for 2025-26. The intermediate property rate (for rateable values between £51,001 and £100,000) reduces to 53.5 pence , and the higher property rate for rateable values reduces to 4.8 pence.

Image: Figure 23:?Non-domestic rates?and?thresholds, 2024-25 to?2026-27

Revenues from Land and Buildings Transaction Tax is forecast to grow from around £900 million in 2024-25 and continue to grow throughout the forecast period, exceeding £1.2 billion in 2030-31. The majority of revenues are from residential transactions, including the Additional Dwelling Supplement.

Image: Figure 24: 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. From £56 million in 2024-25, SLfT revenues are expected to fall to £21 million in 2027-28, before rising slightly to 2030-31.

Image: Figure 25: Forecast income from Scottish Landfill Tax

While greenhouse gas emissions associated with the 2026-27 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 and shows the real terms carbon intensity of spending in the 2026-27 Budget to be the lowest since the data began being collected.

Image: Figure 29: Greenhouse gas emissions associated with Scottish budgets, 2010-11 to 2026-27

While greenhouse gas emissions associated with the 2026-27 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 and shows the real terms carbon intensity of spending in the 2026-27 Budget to be the lowest since the data began being collected.

Image: Figure 30: Carbon intensity of Scottish Budgets, total emissions compared to Total Managed Expenditure, since 2010-11

Chart showing planned efficiencies and savings by portfolio area for 2026-27 to 2028-29. The majority of planned efficiencies and savings are expected to be delivered by the Health and Social Care portfolio.

Image: Figure 33: Planned efficiencies and savings by portfolio area for 2026-27 to 2028-29

Chart showing SFC forecasts for income tax for 2025-26 to 2030-31. Income tax revenues are forecast to be £21.5 billion in 2026-27, rising to £26.8 billion by 2030-31.

Image: Figure 21: Scottish NSND income tax forecasted revenues

Chart showing income tax net position forecasts for 2024-25 to 2030-31. Latest Scottish Fiscal Commission forecasts show the gap between expected income tax revenues and the equivalent block grant adjustment widening from £1.1 billion in 2024-25 to £2.7 billion in 2030-31.

Image: Figure 22: Income tax net position, £ million

Graphic showing the proportionate size of different areas of devolved social security spend

Image: Figure 26: Devolved Social Security spend for 2026-27

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

Image: Figure 31: Capital spending taxonomy, 2026-27

As 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 32: Resource spending taxonomy, 2026-27

Last Updated: 16/1 10:43pm

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