Scottish Fiscal Commission

The Cabinet Secretary for Finance has written to our Chair with formal notification that she will present the Scottish Government's Budget for 2026-27 on Tuesday 13 January 2026. We'll publish our next set of forecasts at the same time.
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The words “You can find recording of our webinar on YouTube” alongside a picture of a play/resume icon and our YouTube channel handle, @scotfisccomm.

Today we held a public webinar covering our recent Fiscal Sustainability Perspectives: Climate Change Mitigation report. You can watch the recording on YouTube: youtube.com/live/8rxQorCIuDA

The words “Register to join the presentation and Q&A on our Fiscal Sustainability Perspectives: Climate Change report” alongside a picture of a calendar showing Tuesday 17 September.

You are invited to our free webinar at 10am tomorrow, 17 September, which will cover our recent Fiscal Sustainability Perspectives: Climate Change Mitigation report. You can register for it here: bit.ly/4gdw5A2

The words “The Scottish Government’s Climate Change Plan must set out how to reduce emissions and face these fiscal challenges.” alongside an icon of a book.

We also discuss what the Scottish Government will need to cover in its Climate Change Plan published later this year. Read the full report here: bit.ly/46hZaFV 4/4

A bar chart showing public additional capital investment per person needed in devolved areas in each Carbon Budget under the Climate Change Committee’s balanced pathway. These figures are compared against those for the same devolved areas in the rest of the UK. Scotland’s public spend per person is projected to exceed that in the rest of the UK. The difference is largest in absolute magnitude in the years between 2036 and 2040 at £188 a year per person in 2024 prices.

In devolved areas more public spending per person is needed in Scotland than in the rest of the UK in every 5-year period, presenting a fiscal risk to the Scottish Government. bit.ly/46hZaFV 3/4

A bar chart showing average public additional capital investment needed in every 5-year period in devolved areas under the Climate Change Committee’s balanced pathway. Spend peaks at £4.9 billion between 2031 and 2035.

Public spending needed to reach net zero is expected to be highest on buildings in every 5-year period under the Climate Change Committee’s balanced pathway scenario. bit.ly/46hZaFV 2/4

The words “We’ve published analysis on how climate change mitigation could affect the Scottish Government’s fiscal sustainability” alongside the cover page for our publication.

We have published our Fiscal Sustainability Perspectives paper considering how climate change mitigation could affect the Scottish Government’s fiscal sustainability. Read it here: bit.ly/46hZaFV
This thread summarises some key points from the report. 1/4

The words “Tomorrow we publish analysis on how climate change mitigation could affect the Scottish Government’s fiscal sustainability” alongside a picture of a calendar showing Tuesday 16 September.

Tomorrow at 9:30 we’ll publish our Fiscal Sustainability Perspectives paper focused on how climate change mitigation could affect the Scottish Government’s fiscal sustainability. Follow us to get the key messages and sign up for our public webinar here: bit.ly/4gdw5A2

The words “We are publishing analysis on how climate change mitigation could affect the Scottish Government’s fiscal sustainability” alongside a picture of a calendar showing Tuesday 16 September.

A week today, we’ll be publishing our Fiscal Sustainability Perspectives paper focused on how climate change mitigation could affect the Scottish Government’s fiscal sustainability. Follow us to get the headlines and sign up for our public webinar here: bit.ly/4gdw5A2

A picture of coins accompanied by text reading “Social security forecast evaluation, In-year policy changes to Pension Age Winter Heating Payment contributed the most to our 2024-25 forecast error”, and a decomposition chart showing that the Pension Age Winter Heating Payment forecast was £151m lower than expected.

In our Forecast Evaluation Report we show social security spending in 2024-25 was £6.1bn, 2% below our forecast of £6.3bn. The main drivers of the error were in-year policy changes. The forecast errors in disability payments broadly cancel each other out. 9/9

Our recommendation is that the Budget presented in December should include comparable information for the baseline year and the upcoming budget. 8/9

Table comparing real-terms budget changes from 2024-25 across major policy areas: Health, Local Government and Education Portfolios. It shows that all portfolios experienced lower growth in the Spring Budget Revision (SBR) compared to the Autumn Budget Revision (ABR), with Finance and Local Government seeing the largest percentage point difference, followed by Health and Social Care. Overall resource spending growth also declined between the two revisions.

Once increased 2024-25 spending was accounted for, the presentation of percentage changes in the 2025-26 Scottish Budget moved significantly. Health, Local Government and Education Portfolios all had lower growth between 2024-25 and 2025-26 than was presented in December 2024 7/9

Our report concludes with ways the presentation of the upcoming Scottish Budget might be improved. These are technical points but are important for Parliamentary scrutiny. 6/9

Income tax outturn for 2023-24 was published in July, showing faster Scottish revenue growth than in the rest of the UK, and than originally forecast. This contributes to a positive £406m reconciliation to be applied in the 2026-27 Scottish Budget. 5/9

Bar chart showing the growth of Scotland’s devolved public sector workforce, excluding local government, from 1999 to 2025. The NHS has grown the most, followed by the devolved civil service, while other sectors have remained relatively stable.

Reducing public sector employment will require a departure from previous trends, where the devolved public sector workforce has grown each year since 2018-19. 4/9

The Scottish Government’s Spending Review in December needs to explain how this gap will be closed. In June the Government outlined its plans to close these gaps, including reducing the size of the devolved public sector workforce by an average of 0.5 per cent per year. 3/9

Bar chart showing projected day-to-day and capital funding gaps in cash terms for fiscal years 2026–27 to 2029–30. Each year has two bars: green for day-to-day funding gap and purple for capital funding gap. All values are negative, indicating deficits. Day-to-day gaps are consistently larger than capital gaps, with both increasing over time. The largest funding shortfall occurs in 2029–30.

In June, the Scottish Government projected spending will exceed funding by over £2 billion by 2029-30 for both day-to-day spending and capital spending. This equates to 4 per cent of day-to-day spending in 2029-30, and around 23 per cent for capital. 2/9

A picture with the title “We have published two reports today”, showing the two publication covers for our Forecast Evaluation Report and Fiscal Update.

We’ve just published two reports: our Fiscal Update considering the implications of new information for the Scottish funding outlook and looking ahead to upcoming fiscal events, and our Forecast Evaluation Report. This thread summarises some key points from the reports. 1/9

The words “We are hiring! Analyst 6-months fixed-term appointment) alongside a picture of a calendars reading “Application deadline: Tuesday 26 Aug”

We are recruiting an analyst for a 6 months fixed-term appointment. You can find out more here: bit.ly/3UpXPHH
Applications close on the 26th of August.

Image of calendar page for August 26 and text “A week today, we publish two reports: Fiscal Update, Forecast Evaluation Report”

A week today, we’ll publish two reports, our Forecast Evaluation Report and a Fiscal Update which considers the implications for the Scottish Government’s fiscal outlook of new information that became available since June 2025. Follow us here to get the key messages on the day.

Image of calendar page for August 26 and text “In two weeks, we publish two reports: Fiscal Update, Forecast Evaluation Report”

In two weeks, we’ll publish two reports, our Forecast Evaluation Report and a Fiscal Update which considers the implications for the Scottish Government’s fiscal outlook of new information that has become available since June 2025.

The words “We are hiring! Analyst 6-months fixed-term appointment) alongside a picture of two calendars reading “Information webinar: Monday 18 Aug” and “Application deadline: Tuesday 26 Aug”

We are recruiting an analyst for a 6 months fixed-term appointment. You can find out more here: bit.ly/3UpXPHH
We are hosting an information webinar on the18th of August at 12:00 pm.
Applications close on the 26th of August.

Our report includes an updated forecast for the Two-Child Limit Payment and an illustrative estimate for the new Pension Age Winter Heating Payment policy in Scotland, which we estimate 860,000 pensioners will be eligible for with total spending of £151 million in 2025-26. 4/4

Headline reading "Capital funding to grow rapidly in 2025-26 but to remain flat thereafter" alongside a line chart showing nominal and real terms growth in capital funding levels up to 2030-31, indexed at the levels of the latest 2024-25 funding position. In nominal terms, funding will grow rapidly (20.7 per cent) in 2025-26 before falling in 2026-27 and 2027-28 and then increasing gradually until 2030-31. In real terms, funding peaks in 2025-26 and then decreases each year from 2026 27 onwards, sitting at 8 per cent above its 2024-25 level by 2030-31.

Capital funding makes up around 10 per cent of the Scottish Budget, covering investment in roads, hospitals and financial assets. It is forecast to rise sharply in 2025-26, then stay flat in nominal terms and fall year-on-year in real terms from 2026-27. 3/4

Headline reading "Resource funding growth reduced by social security spend" alongside a line chart showing resource funding trends from 2024-25 to 2030-31, indexed so that 2024-25 levels are equal to 100. Nominal resource funding grows sharply between 2024-25 and 2025-26 with lower growth between 2025-26 and 2027-28. It then grows faster thereafter, reaching a cumulative 24 per cent above its 2024-25 level by the end of the forecast period. Adjusting for inflation in 2030-31 real terms resource funding is 10 per cent above the level in 2024-25. Accounting for social security spend reduces cumulative growth further, so that it is 6 per cent above its 2024-25 levels by 2030-31.

Resource funding rises to £52.6 billion in 2025–26, covering day-to-day costs such as social security payments and staff pay. By 2030–31, it is forecast to grow 10 per cent in real terms compared to 2024–25 levels. After social security spending, this drops to 6 per cent. 2/4

The words “We have published our update on the Scottish Government’s MTFS.” alongside the cover page of our publication.

We have published our update on the Scottish Government’s Medium-Term Financial Strategy. You can find it here: bit.ly/4lfanwU

A quick thread on some of the headline messages below 🧵 1/4

The words “Tomorrow afternoon, we publish our update on the Scottish Government’s MTFS.” alongside a picture of a calendar showing Wednesday 25 June.

Tomorrow afternoon we publish our update on the Scottish Government’s Medium-Term Financial Strategy. Follow us on social media to see our key charts and takeaways.

The words “A week today, we publish our update on the Scottish Government’s MTFS” alongside a picture of a calendar showing Wednesday 25 June.

📅 We will publish our update on the Scottish Government’s Medium Term Financial Strategy next Wednesday. Follow us on social media to see our key charts and takeaways that day.

The words “We are hiring! Analyst (x2)” alongside silhouettes of two people.

We're recruiting two Analysts (deadline 23:59 29 June).
🔗 Economic Analyst: bit.ly/3Zc3UKI
🔗 Public Funding Analyst: bit.ly/3Hn6A1V

The words “In two weeks we publish our update on the Scottish Government’s MTFS” alongside a picture of a calendar showing Wednesday 25 June.

📩 In two weeks we’ll publish our update on the Scottish Government’s Medium Term Financial Strategy. If you’re not already signed up, you can register to get our reports sent straight to your inbox here: scot.us15.list-manage.com/subscribe?u=...