Devolved government finances

Updated forecasts for tax revenues and benefit spending imply a more challenging funding outlook for the Scottish Government.

Today’s SFC report highlights the fiscal challenges facing the Scottish and UK governments over coming decades.

This report analyses the Scottish Government’s Budget for 2025–26, with chapters on tax strategy, school spending, public sector pay and more.

Funding and spending growth are set to slow. Without a top-up, health spending will be flat in 2025–26 and tricky trade-offs elsewhere loom too.

How have public sector pay and employment changed in Scotland in recent years and what are the implications of those changes?

Scotland’s schools are relatively well funded. Falling pupil rolls and workforce planning represent both challenges and opportunities going forwards. 

Council tax in Scotland – as in England – is out of date, regressive and distortionary. How should it be reformed, and what would the effects be?

Scotland’s Tax Strategy is welcome but says little concrete about tax policy. And some actual tax policy is divorced from any sensible strategy. 

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.

How will the latest plans for spending in 2024–25 boost the amount that the Scottish Government has to spend next year and beyond?

This response to a UK parliamentary inquiry assesses how the Scottish Government is funded, including via the Barnett formula and Fiscal Framework.

Our initial response to the Scottish Government’s Budget for 2025-26.

How is the NHS in Scotland performing, and what does this mean for the Scottish Budget?

The UK Budget has improved the Scottish funding outlook, but tough choices loom down the line 

Falls in funding for home students, a decline in international enrolments and higher labour costs put Scottish university finances under pressure.

Scotland’s income tax rises have likely increased tax avoidance and migration – but the size of the effects is uncertain.

Read all our analysis of the Scottish Budget for 2025–26.

Following a bulge in claims, recent figures suggest new disability benefits may not pose as big a cost to the Scottish Budget 2024 as first feared.