The Scottish Government’s Finance Secretary Shona Robison should use her limited room for manoeuvre in next week’s Scottish Budget to “help employers with cost pressures and provide a stable platform for growth.”

That’s according to Prosper, Scotland’s economic alliance.

Prosper has published its recommendations to Robison on her tax and spending plans for 2025-26 in which it highlights that the revenue-raising measures announced by the UK Chancellor of the Exchequer — particularly the changes to employers’ National Insurance Contributions — are putting even more strain on the finances of many employers in the third and private sectors in Scotland.

Prosper has 500 members from across Scottish society – including large and small businesses, local authorities, colleges and universities and the social economy.

“While the changes made in the UK Autumn Budget will provide a very significant uplift to the Scottish Budget which will relieve some of the immediate pressures on it and Scotland’s public services, there will still be restrictions on the funding that is available,” said Prosper.

“Prioritisation will be essential to provide the stability and certainty needed at this time.”

Prosper CEO Sara Thiam said: “Many of our members are currently experiencing high costs pressures and they are looking to Scotland’s Finance Secretary to do all that she can within the headroom available to provide a stable platform for investment, jobs and growth. Our proposals are practical steps to support progress on these priorities and Scotland’s key opportunities.”

Prosper’s key recommendations for the Scottish Budget 2025-26 are:

• The Scottish Government should fully fund the implementation of the Green Industrial Strategy. This must include funding to streamline the planning and consenting processes so that decisions on projects are made within the Scottish Government’s targets. The Scottish Government should also protect the budget for low carbon heating and energy efficient buildings; clarify plans for the Just Transition Fund for the North East and Moray; and reopen the Scottish Industrial Energy Transformation Fund.
• Scottish Government funding, grants and contracts for organisations providing public services in Scotland (including third sector organisations, colleges, universities and social care providers) should be increased to cover in full the additional costs from the changes to employers’ National Insurance Contributions and National Living Wage.
• Funding for post-school education and skills should stabilise the tertiary education sector, avoid further real-terms cuts to per-student funding, provide extra work-based learning opportunities, and reinstate support for upskilling and reskilling workforces.
• The capital budget which funds universities’ research and innovation activities should be increased with a National Productivity Programme to promote wider adoption of innovation by businesses and seize opportunities in the new UK Industrial Strategy.
• Use the full Barnett consequentials from the 40% business rates relief for Retail, Hospitality and Leisure businesses in England to reduce business rates, and commit in its Tax Strategy to reform the business rates system.
• Income tax rates should not be increased over this year in order to support recruitment and retention and incentives to work, and avoid pressures on wages.
• All local authorities should be allocated sufficient funding to deliver local services and balance budgets which fully accounts for rising costs and service demands. The Scottish Government should say how it will empower the competitiveness of Scottish city-regions as English city-regions gain greater powers to grow their own economies.
• Fully reinstate the real terms funding cuts in the Affordable Housing Supply Programme since 2023-24 and prioritise other housing budgets to increase housing supply for working people and support economic growth.
• Fund solutions to improve in-work health and productivity among Scotland’s workforce in partnership with employers, offer supported pathways into work for economically inactive people and expand access to affordable childcare.