The Scottish Parliament has approved the 2026-27 Scottish Budget, which includes a record £22.5 billion for health and social care and enhanced cost of living support.
The Budget Bill sets out funding of almost £68 billion with investment in Scotland’s infrastructure, direct support for household budgets and extra help for families.
The Scottish Government said its spending plans include:
- continued investment in “cost of living” measures, including free prescriptions, free eye examinations, removal of peak rail fares on Scotrail – and the freezing of remaining Scotrail fares
- free tuition fees for young Scots, free school meals for thousands of children, including all pupils in P1 to P5, and free bus travel for under-22s and over-60s
- an increase in the Scottish Child Payment and, from 2027-28, a premium payment of £40 per week for eligible children under 12 months
- an almost £15.7 billion record settlement for local government to support the services communities rely on including social care and education
- significant extra funding for universities and colleges, more than £5 billion to tackle the climate emergency and £4.3 billion transport funding
- record investment of £926 million for affordable housing supply, record funding for police and fire services and an additional £10 million investment in community justice services
Finance Secretary Shona Robison said: “The Scottish Government’s Budget delivers for the people of Scotland – strengthening our NHS and providing real, practical support with the cost of living.
“It will improve access to healthcare, including funding for a network of 16 walk-in GP clinics open seven days per week, and builds on our game-changing work to eradicate child poverty, with an increase in the Scottish Child Payment.
“This Budget demonstrates our determination to improve lives across Scotland, and our plans mean that 55% of taxpayers can expect to pay less income tax than in the rest of the UK.”
REACTION:
The Institute of Chartered Accountants of Scotland (ICAS) warned that the budget “fails to deliver meaningful change or tackle Scotland’s underlying economic challenges.”
Chris Barber CA, CFO at ICAS, said: “The Scottish Budget passed at Holyrood today falls short of delivering the meaningful, long-term changes that Scotland’s households and businesses need.
“While raising the starting point for the basic and intermediate income tax thresholds by 7.4% may sound like good news, in practice it gives low earners just £11 of additional income a year. With no reform of the rest of the system, fiscal drag will continue to pull more people into higher tax bands over time, quietly increasing the burden on households without growing the overall tax base.
“Relying on small adjustments and stealth tax rises like this to meet short term pressures isn’t a credible or sustainable route to economic growth. Tax policy should be grounded in clear evidence and long-term analysis, not incremental changes that raise revenue by default rather than by design.
“We conducted a survey of members in the wake of the Budget announcement which reinforces how fragile confidence in Scotland’s economic direction has become. Four in five Chartered Accountants told us they lack confidence in the health of the Scottish economy, and nearly two-thirds (63%) said Scotland needs to prioritise a long-term economic and tax strategy. These findings reflect a growing concern among the highly skilled professionals witnessing the real-world business impact of continued uncertainty.
“With the Scottish elections approaching, the next government must move beyond incremental tax tinkering and set out a coherent economic vision – one that delivers tax stability, supports key growth sectors, and invests in skills to strengthen Scotland’s long-term competitiveness.”