A budget by Scotland, for Scotland
by Presiding Officer,
I am proud to present a budget that delivers on the priorities of the people of Scotland.
Over recent years, our nation has faced an unprecedented range of challenges: Covid, Inflation, Austerity, Brexit.
Today, we can show that we understand the pressures people are facing.
We can choose to come together to bring hope to people, to renew our public services, and deliver a wealth of new opportunities in our economy. This Budget invests in public services, lifts children out of poverty, acts in the face of the climate emergency, and supports jobs and economic growth.
It is a budget filled with hope for Scotland’s future.
Presiding Officer, the UK Budget resulted in an increase in funding through the Barnett formula. That’s welcome, but let’s be clear. After inflation, it represents growth in resource spending – that’s day-to-day spending to pay for services – of only around 1% year on year. Substantial financial pressures therefore persist.
In the face of a Tory cost-of-living crisis, I am proud of the pay deals that give Scotland’s nurses, teachers and public sector workers higher salaries than in the rest of the UK. And I am proud of the increased social security spending that helps keep people out of poverty.
Presiding Officer, in one way, the UK Government actually added to the pressures Scotland faces with the increase in employers’ National Insurance Contributions. This hike will add well over 700 million pounds to the cost of delivering public services.
Despite this, the UK Government seems to be saying they will only reimburse less than half of that cost. They have accepted they should pay but they plan to shortchange our public services by hundreds of millions of pounds. But, even now, the Chancellor has an opportunity to do the right thing. Services in Scotland should not have to suffer. The Chancellor should pay the full price for her own decisions.
Presiding Officer, this Government has had to take difficult decisions to manage financial pressures. As set out in my statement in September, this included using some or all of the ScotWind revenues. No-one wanted to do this. This money was meant to be used for long term investment to help transform our economy. So, I was very clear that I didn’t want us to use that cash to fund day-to-day spending. And we haven’t.
Members will be delighted to hear that ScotWind has not been used up in this financial year. Instead, I am able to deploy over 300 million pounds of ScotWind revenues in 2025-26 for exactly the kind of long-term investment it should be spent on. This 300 million pounds will deliver substantial investment in jobs, and in measures to meet the climate challenge; Presiding Officer, all of it an investment in the longterm success of our nation. Progress for Scotland, that is our promise.
But we can only deliver progress for the people of Scotland if there is a willingness to work together across this Parliament. Over 100 proposals have come from members across this Chamber – and I would
like to thank the opposition for their constructive engagement. Others have emerged from the conversations that I and other ministers have had with people, businesses and organisations in communities the length and breadth of our land.
We have listened, we have heard people, and we are acting. This is a budget for Scotland, by Scotland.
That is why I would encourage all members to give it their support.
Presiding Officer, eradicating child poverty is our top priority. Policies such as the game-changing Scottish Child Payment. And, expanded funding for early learning and childcare. Action in the face of need. But we want to go further.
This budget will invest almost 800 million pounds more in social security benefits in 2025-26, putting money directly into people’s pockets, and ensuring benefits rise by inflation. We recognise also that having a warm, safe and affordable place to live is critical to tackling child poverty.
Far too many families are still in temporary accommodation. Shirley-Anne Somerville has told me about the conversations she has had with mums who feel the pain of bringing up their kids in inadequate accommodation. That is why we are going to ramp up action on housing, investing 768 million pounds in affordable homes. It enables over 8,000 new properties for social rent, mid-market rent and low-cost
home ownership to be built or acquired this coming year. And returns spending to a higher level than it was 2 years ago. And given the scale of the housing challenge, I will look at all the levers available to
me to deliver.
That is why I can confirm today that we will be working with Edinburgh City Council to unlock over 800 new, net zero homes at their Granton development site. Housing is, of course, just one strand of our work in tackling poverty.
In education, we will provide 120 million pounds to headteachers to support initiatives designed to address the poverty-related attainment gap. And we will also work with COSLA to expand free school meals to primary 6 and 7 children from low-income families. But we’re determined to go further still.
I can announce today we will fund a new initiative that will deliver more breakfast clubs in primary schools across Scotland. To be called ‘Bright Start Breakfasts’ this will make things that little bit easier for
working mums and dads, while also giving more of our kids a better start to their day. We will help some of the most vulnerable in our society with new funding of 4 million pounds for homelessness and for prevention pilots.
And following engagement with disabled people’s organisations we are delivering over two and a half million pounds to support actions within the Disability Equality Action Plan. All of these steps will help people. But I say this to the chamber: if we want progress on housing, on learning, on free school meals, on breakfast clubs, this Parliament has got to vote for it.
Presiding Officer, we all know how important public services are to quality of life and the success of our nation, none more so than our Health Service. My biggest financial commitment today is, therefore, to our NHS. Today’s budget provides a record 21 billion pounds for health and social care. An increase of 2 billion pounds for frontline NHS Boards – a record uplift. That is money that will make it easier for people to access GP appointments, that will improve A&E and ensure more Scots get the care they need in good time.
There is no public service more important and there is no budget that has delivered a bigger vote of confidence in the NHS than this budget. Presiding Officer, Neil Gray has spoken to me about the pressures across the health service. We know that for many people their experience of the NHS is excellent. But for others, their experience falls short of what we would expect.
So I am today investing almost 200 million pounds in our plan to reduce waiting times and improve capacity, to reform the service and make it more efficient, and remove blockages that keep some patients in hospital far too long. Because of today’s record funding, our health service can reduce waiting times. By March 2026 no one will wait longer than 12 months for a new outpatient appointment, inpatient treatment or day case treatment.
The extra funding we are providing will see over 150,000 extra patients treated as a result. Our record investment will also deliver additional support for GPs, targeted to address known pressures in relation to waiting times and prevention. It means we can deliver on our commitment to increase social care spending by 25% over this parliament – a full two years earlier than planned. And we will expand the Hospital at Home service, with more than 600 extra beds.
We will deliver an extra 20,000 cataract and other optometry procedures in the community. And, it means over 6000 additional hip replacements or similar procedures each year.
This record increase in spending will fund:
• more dental training places
• new specialist long covid nurses and clinics and
• more community-based support for teenage mental health
Presiding Officer, it is not just day-to-day resource spending that will increase. We are also increasing health capital spending. That means I can announce to the chamber today that this Budget will fund:
• the replacement of the Eye Pavilion in Edinburgh,
• the Belford hospital in Fort William, and
• Monklands hospital in Airdrie.
Every single project a priority for the people of Scotland. Every project something members of this chamber have called for. Delivered by this Budget and by this SNP government.
But I say again: If members want it – investment in GPs, dentistry, long-covid, young people’s mental health – then they have to vote for it.
Presiding Officer, many services, from schools to social care, are delivered in partnership with local government. Here I will set a second record funding settlement. In 2025-26, the Scottish Government will increase local authority funding by more than 1 billion pounds. It will take their total funding to over 15 billion pounds, including 289 million pounds to give real terms protection to the General Revenue Grant.
This enables councils to deliver the services people rely on.
It delivers the pay increases agreed for our teachers, social care workers, refuse collectors and more. Pay increases that only go ahead, I remind the chamber, if Parliament backs this budget. Presiding Officer,
Scotland will only thrive as a nation, if our youngest people are nurtured. I am therefore increasing spending on education and skills by 3% over and above inflation, an uplift of 158 million pounds.
Our choices will see staff in early learning and childcare paid at least the real living wage from April. It will support 1140 hours of early learning and childcare for 3 and 4-year-olds, and eligible 2-year-olds. In a cost-of-living crisis, this is funding that frees parents to work and earn while giving kids the best start in life. In our schools, I have heard from Jenny Gilruth the challenge many children face with ASN – Additional Support Needs. I will therefore fund a 29 million pounds ASN plan, delivering measures like training so that more of our teachers can become ASN teachers.
More widely, the budget can maintain teacher numbers at 2023 levels and will continue improvements to our school estate, with new projects from Shetland and Orkney to the Scottish Borders.
Presiding officer, we will invest almost 4.2 billion pounds across the justice system in 2025-26. This will maintain police numbers and continue policies that have seen levels of crime fall by 40% since we came to office. I know from speaking to Angela Constance that a particular area of concern to retailers at the moment is shoplifting.
Once again, we have listened, and we are acting – that’s why I am making an additional 3 million pounds available to help tackle retail crime. And on prisons, we will fund replacements for HMP Inverness and Barlinnie through the 355 million pounds capital budget.
Presiding Officer, as I’ve set out, investment in public services is a priority. Reform goes hand in hand with that. I am therefore establishing a 30 million pound fund to ‘invest to save’. It will fund the costs of reform, drive out efficiencies, improve productivity and ensure longer term sustainability.
Presiding officer, Scotland’s biggest contribution to tackling the global climate challenge is, of course, our vast renewable energy resources, our innovation and our expertise. Simply put, we can help the planet while creating new jobs and opportunities here at home, and I saw a great example at Logan Energy this morning. We will create opportunities for businesses, and jobs for communities, by allocating
25 million pounds to support the creation of new jobs in the green energy supply chain here in Scotland. And to help people at home and work, 300 million pounds will be invested in upgrading heating and insulation.
This money serves two hugely important purposes: it helps us reduce our carbon emissions while tackling fuel poverty. Lower emissions and lower energy bills, that’s an investment worth making.
Just as we are investing in tackling the climate crisis, we must also tackle the nature crisis. We will invest almost 90 million pounds to protect, maintain and increase our woodlands and peatlands. We will make it easier for people to walk, wheel or cycle, and invest in resilient, efficient bus services, with almost 190 million pounds of funding; and we will expand our electric vehicle charging network.
Eradicating child poverty is this government’s most important priority. We will do that by growing the wealth of our nation and sharing that wealth more equally. A thriving economy is not an afterthought. It is an essential requirement. When discussing budget priorities with Kate Forbes, she told me about the discussions she has had with investors and with employers big and small.
We have heard their ambition, and we share it. Today I am able to announce that we will invest 321 million pounds in Scotland’s enterprise agencies supporting emerging tech, including AI and robotics, and
programmes like our ambitious Techscaler initiative.
And we know that colleges, universities and the wider skills system make crucial contributions to economic growth, which is why in this coming year we will invest over 2 billion pounds supporting them. We have listened to universities and are conscious they must remain financially competitive with institutions in the rest of the UK. The Labour UK Government – shamefully – increased student fees to pay for a
3.08% increase in university funding in England. Here, not only will we keep tuition free; we will increase total investment in Higher Education by 3.5%.
Presiding Officer, critical to economic growth is capital spending and investment in infrastructure. I can today tell the chamber that capital spend will total over 7 billion pounds in this budget.
A green reindustrialisation of Scotland is our ambition. So, after discussion with Gillian Martin, I can announce that we will use that capital funding to make a significant strategic decision to invest in this nation’s green future. I can announce today that we will almost triple our investment in offshore wind to 150 million pounds next year. This money will help leverage private investment of 1.5 billion pounds in the infrastructure and manufacturing facilities critical to growing the sector. Capital funding of 150 million pounds will accelerate our investment to support the offshore wind sector, underlining our commitment to invest up to 500 million pounds over five years.
Aberdeen is perfectly placed to become a global hub for green energy. To support this, we will establish a Scottish Government hub for offshore wind in the North-East to provide an additional route for industry to engage with our teams. More broadly, we will provide 100 million pounds for digital connectivity, accelerating access to full-fibre broadband.
We will provide almost 1.1 billion pounds to maintain and renew our rail infrastructure. 237 million pounds will be invested to maintain and improve our ports, and deliver a more resilient and effective ferry fleet. New rail rolling stock, new ferries and the electrification of the East Kilbride line: investment to keep Scotland moving. And, to ensure our trunk road network is safe, resilient and efficient, we will invest 1
billion pounds – including money to continue the dualling of the A9, something that is a central priority for Fiona Hyslop, and for all of us on these benches.
Presiding Officer, our capital programme allows us to tackle another issue we have heard raised with us. I know that many people want to see their local high street thrive. So today, I can announce that I will expand regeneration funding to 62 million pounds, investing in towns and communities like Dundee, Arbroath, Possilpark, Pilton, Drumnadrochit and Stranraer town centre.
In rural communities, over 660 million pounds will support the crucial contribution of Scotland’s farmers, crofters and the wider rural economy. Mairi Gougeon has told me about the discussions she has had with the farming community and their concerns about recent decisions by the UK government.
As asked for by farmers, we are returning in full the savings that were used in previous Scottish budgets, through a new capital transformation scheme with 20 million pounds in 2025-26 and the remainder in 2026-27. This budget also increases the dedicated funding available to the four councils operating their own ferry services to 50.3 million pounds.
Presiding Officer, let me summarise the measures this SNP Government sets out today. Record NHS investment – money to reduce waiting lists and make it easier for people to see their GP. Winter heating payments for older Scots. More affordable homes. Investment in childcare and nursery education, in more jobs and business growth. More breakfast clubs in our schools. A record increase in funding for local services.
This is what the people of Scotland want and will vote for. The question is whether opposition parties will too. Presiding Officer, this is a Budget that delivers progress for Scotland. It is a Budget that delivers hope for Scotland.
I urge Parliament to support it.