The Scottish government has unveiled its Scottish Budget 2026, setting out tax and spending plans that prioritise modest tax cuts for the lowest earners while acknowledging significant constraints on public finances.
Finance secretary Shona Robison confirmed changes to Scotland’s income tax system aimed at easing cost-of-living pressures for those on lower incomes. The move reflects the SNP government’s commitment to a progressive tax approach using devolved powers, while maintaining higher rates for better-paid workers.
Alongside the tax measures, the budget highlights ongoing pressure on public spending. Funding for key areas such as health, education and local government is set against rising costs, including public sector pay, demand for NHS services and inflation-linked pressures. Ministers acknowledged that many departments face real-terms constraints despite headline increases.
Economic analysts noted that the budget involves clear trade-offs. While lower earners benefit from tax reductions, the scope for wider spending growth is limited by the size of the block grant from Westminster, weak economic growth and the absence of significant new revenue streams. Some commentators pointed to areas where future plans remain unclear, warning that “silences” on longer-term funding challenges may prove as significant as the measures announced.
Politically, the budget reinforces the SNP’s argument that devolved fiscal powers allow Scotland to take a different path from the rest of the UK on taxation. Opposition parties, however, questioned whether the plans go far enough to protect public services or provide certainty for councils and public bodies facing mounting financial strain.
As Scotland enters the new financial year, the budget sets a cautious course focused on redistribution and short-term relief, while leaving unresolved questions about the sustainability of public spending in the years ahead.
