The Scottish Government's Budget: Going for Growth

Today, Shona Robison, the Scottish Cabinet Secretary for Finance and Local Government, presented the 2025/26 budget. While the budget has been delivered, its passage through Parliament remains uncertain due to the small SNP majority.

The budget includes several key announcements aimed at addressing the cost-of-living crisis, promoting job creation, improving public services, investing in culture, tackling climate change, and increasing funding for green energy and business transition. To support this spending, there will be increases in income tax and business rates.

Robison emphasized the government's commitment to supporting the Scottish people while ensuring sustainable growth. Here are the key headlines from the Budget relevant to REC members, we are still awaiting further details of the full policies:

Record Investment in the NHS

A major headline of the budget is a record £21 billion investment in health and social care. This funding will help improve access to GP appointments, reduce waiting times, and enhance A&E services. An additional £200 million is allocated to reform health services, while mental health services will receive a boost, including more community-based placements.

Capital spending will increase by £7 billion, focusing on the construction and redevelopment of hospitals to meet the needs of Scotland's population.

More Funding for Social Security

The budget allocates £800 million to social security benefits, ensuring they rise with inflation to help vulnerable individuals cope with the cost of living. A significant proposal is to scrap the two-child cap on benefits, which is expected to lift 15,000 children out of poverty.

Additionally, £2.5 million will be used to implement a Disability Access Plan, improving accessibility for disabled people across Scotland.

Job Creation and Economic Growth

£300 million is earmarked to create jobs and stimulate economic growth through the "Progress for Scotland" scheme. The government aims to build 800 new net-zero homes in partnership with Edinburgh Council, addressing housing needs while meeting climate goals.

Further investment will go into the green sector, including a £150 million boost for offshore wind energy. This aligns with Scotland's ambition to achieve net-zero emissions and supports green re-industrialisation, with a significant portion of the £7 billion capital spending dedicated to green projects.

Education and Skills Development

Education is a key priority, there will be a real-terms uplift of 3% for spending on education and skills.

This includes £158 million set aside to enhance skills development for both young people and adults. The government also guarantees that university fees for Scottish students will remain free.

£200 million will be used to reform the education system, improving school facilities and promoting inclusive learning. Additionally, the "Bright Start Breakfast" programme will expand breakfast clubs in primary schools to ensure children from disadvantaged backgrounds receive a nutritious start to the school day.

Transport and Infrastructure

To improve transport infrastructure, £190 million is allocated to enhance bus services across Scotland, particularly in rural areas. This is part of a broader £7 billion capital spending plan, which includes investment in new infrastructure.

Increase in Income Tax and Business Rates

To fund the budget, the government has announced increases in income tax, with a hike targeted at the wealthiest individuals to "ensure they contribute fairly to public services."  There will be an increase the Basic and Intermediate rate thresholds.

Business rates will also increase, although there will be business rates relief for hard-pressed local pubs and restaurants.

As we await the budget's passage, the significant investment in public services and infrastructure to promote growth is welcome, though concerns over the increased tax burden remain.