Scottish parliament

In-year top-ups mean big increases in Scottish NHS spending this year – but that means plans for 2025–26 now look relatively less generous.

After setting its initial spending plans for a given fiscal year before it starts, the Scottish Government then updates plans formally in two ‘Budget Revisions’ during the course of the year: an ‘Autumn Budget Revision’ roughly halfway through the fiscal year, typically in late September or early October, and a ‘Spring Budget Revision’ near the end of the financial year, usually at the end of January or start of February (which, like now, typically does not feel very Spring-like!).

The Spring Budget Revision for 2024–25 was published yesterday and sees significant movements in the budgets for the Scottish Government’s various departments (or ‘portfolios’). The format in which the Budget Revisions are published does not make it easy to work out exactly how spending plans are changing on a like-for-like basis, but our best estimates are that:

  • The Health and Social Care portfolio is seeing the biggest change, with a big net top-up of £618 million for day-to-day (non-investment) spending confirmed yesterday. This takes the overall change in day-to-day spending on health since the original 2024–25 Budget to £1.5 billion, after adjusting for some technical changes to measurement of the cost of pension contributions for NHS staff (so-called SCAPE costs). That means that rather than being cut by 2.7% in real terms this year – as was implied by the original budget – spending on the Health and Social Care portfolio is set instead to increase by 5.2% in real terms. This compares with an increase of closer to 3.2% on a like-for-like basis planned for the English NHS as of the October 2024 UK Budget.  
  • The other areas seeing top-ups to their day-to-day budgets are local government, with a net top-up of £85 million, the Justice and Home Affairs portfolio, with a net top-up of £67 million, and the Education and Skills portfolio, with a net top-up of £18 million (after adjusting for SCAPE costs).  
  • Cuts or underspends for several other areas were also confirmed in the Spring Budget Revision, with money released to be redeployed to different areas. These underspends have led to a reduction in planned day-to-day spending by the Net Zero and Energy portfolio, of £23 million compared with the last set of plans, published in October.  
  • There are also reductions in planned day-to-day spending on the Transport portfolio of around £12 million and on the Social Justice portfolio’s non-benefit spending of around £5 million.

Overall, the Spring Budget Revision has allocated around £750–800 million to specific areas of day-to-day spending – with Health and Social Care receiving over three-quarters of this. An additional £350 million of funding is shown as being budgeted for use this year, 2024–25, but has not been allocated to a specific service. Instead, it is being held within the central finance budget, as a contingency, in case there are further spending pressures or shortfalls in devolved tax revenues in the remaining months of this fiscal year.

Including this ‘contingency’ brings the total spending top-up to day-to-day spending budgeted for in the Spring Budget Revision to £1.1 billion. As we previously highlighted, figures published in December alongside the initial Budget for 2025–26 implied that £1.3 billion of funding for day-to-day spending was still to be allocated this year. The Spring Budget Revision implies around 60% of this has been allocated to specific services, £350 million is being planned for spending ‘just in case’, and the remainder carried forward into future years (in large part by not drawing down income from offshore windfarm licences this year as the Scottish Government had originally planned – see our immediate on-the-day response to the Spring Budget Revision).  

History suggests that the Scottish Government is likely to be able to carry forward most, if not all, of the additional £350 million currently being held within its central contingency budget. Indeed, the Budget Revision documentation suggests it expects to carry forward £60 million to support Health and Social Care budgets in 2025–26.

It would likely be prudent to carry forward as much as possible given the probable tight funding situation in future years, with much slower increases in total day-to-day funding in future than this year. Indeed, the top-ups to spending announced in the Spring Budget Revision, particularly for the Health and Social Care portfolio, mean that the initial plans for next year set out in the 2025–26 Scottish Budget now look less generous in comparison.

We will look further into the Scottish Government’s spending plans for next year and the challenges and trade-offs it faces in future, in a series of reports over the next few weeks and an online event on 20 February 2025.