Fiscal framework outturn report: 2026

7. Social Security

51. This section contains the latest outturn and forecasts available for expenditure and BGAs for all Social Security benefits that have a corresponding BGA from 2025-26 onwards, and shows the net effect on the Scottish Budget.

52. For social security benefits that were devolved under the Scotland Act 2016, a BGA for each benefit is added to the Scottish Budget each year. As with fully devolved taxes, the BGA forecast is reconciled to outturn. Where a benefit is unique to Scotland and has no UK equivalent, there is no corresponding BGA funding from the UK Government and expenditure is fully funded from the Scottish Budget.

53. Table 11 shows the provisional expenditure outturn for each benefit along with the provisional outturn BGA. The difference represents the net effect on the Scottish Budget 2025-26 and where this is negative, it shows the additional investment that the Scottish Government is making above the BGA. The table also shows the latest expenditure forecasts and BGAs for future years. It does not include social security benefits for which there is no corresponding BGA.

Table 11: Latest Social Security Expenditure and Block Grant Adjustments data (£ million)

Note 1: BGAs for Industrial Injuries Disablement Scheme includes Industrial Death Benefit.

Note 2: Provisional outturn is not available for the Winter Fuel Payment Tax Recovery BGA at the time of publication. The figure in Table 11 is therefore the forecast used at the Scottish Budget 2026-27.

† Indicates provisional outturn; BGAs are shown as positive as they represent additional funding.

54. This shows that the Scottish Government spent £175 million more on benefits with associated BGAs than it received in BGA funding, with disability benefits accounting for the majority of this. While some of the difference may reflect Scottish Government policy choices, the underlying reason for increased spend on disability benefits overall is linked to wider demographic change.

55. The net effect on the budget for Winter Fuel Payment (WFP) is the expenditure for the equivalent Pension Age Winter Heating Payment (PAWHP) compared to the WFP BGA and the WFP Tax Recovery BGA combined. The WFP Tax Recovery BGA adjusts for the fact that the UK Government will recover more per person from pensioners in Scotland with an income over £35,000 than it would if the WFP policy applied in Scotland, owing to different rates applying for the PAWHP. More information is available in the Fiscal Framework Data Annex^[10].

56. In addition, the Scottish Government funds a range of benefits and payments only available in Scotland, which have no corresponding BGA funding. Expenditure on these benefits and payments totalled £623 million, meaning that the Scottish Government’s total expenditure above BGA funding in 2025-26 was £798 million. However, these figures are based on provisional outturn and are subject to change.

57. For 2026-27, Social Security Assistance expenditure was forecast at £7,228 million at the time of the Scottish Budget 2026-27. This means that the additional investment made by the Scottish Government over and above the funding provided through the Social Security BGA was estimated to be £905 million.

58. Table 12 shows the net effect of forecast social security expenditure and social security BGAs compared to outturn for 2025-26. Expenditure is the total spend on social security benefits which have associated BGAs, not overall social security expenditure.

Table 12: Total 2025-26 Social Security expenditure with associated BGAs compared with forecasts (£ million)

59. This shows that the provisional outturn of expenditure for benefits with associated BGAs was £161 million lower than when the Scottish Budget 2025-26 was set, while the BGA was £192.7 million higher than forecast. Taken together, these reduce the net effect on the Scottish Budget by £353.6 million, with outturn expenditure now £175.4 million higher than BGA funding, compared to £529.0 million as previously forecast.

60. The England and Wales outturn used to calculate provisional 2025-26 outturn BGAs includes a minimal amount of overseas expenditure which will not be included in the final outturn BGAs. The final outturn without overseas expenditure will be available later this year. Removing overseas expenditure from BGA calculations will reduce the BGAs by a small amount.

61. There are no reconciliations required for the Scottish Government’s expenditure on Social Security benefits, as the Scottish Government manages any variance between forecast and actual expenditure in-year.

62. However, as with the fully devolved taxes, the BGAs for benefits do undergo reconciliations and are reconciled in two stages. An in-year reconciliation is made within the budget year at the UK autumn fiscal event on the basis of the most recent OBR forecasts, and, once outturn data is available in the following financial year, a final reconciliation is applied to the Block Grant for the financial year thereafter (i.e. two years after the Budget was set).

63. Table 13 shows the provisional net Budget position for Social Security benefits with a BGA for 2025-26.

Table 13: 2025-26 Provisional Outturn Compared with Forecasts (£ million)

Note 1: BGAs for Industrial Injuries Disablement Scheme includes Industrial Death Benefit

Figures may not sum due to rounding.

64. This shows that the difference between the BGAs used to underpin the Scottish Budget 2025-26 (£5,596.0 million) and the final outturn BGA (£5,788.7 million) is a positive £192.7 million. As shown in Table 14, £206.7 million was added as an in-year reconciliation in 2025-26 and a further final outturn reconciliation of negative £14.1 million is required. The net effect of the in-year reconciliation and the final reconciliation equate to the positive £192.7 million referenced above.

65. Table 14 shows the forecast BGAs for each benefit applied to the Scottish Budget 2025-26, before outlining the in-year and final reconciliations.

Table 14: Social Security 2025-26 expenditure BGA Reconciliation

Note 1: BGAs for Industrial Injuries Disablement Scheme includes Industrial Death Benefit

Note 2: The UK Autumn Statement 2025 BGA and provisional outturn BGA for Winter Fuel Payment include the Winter Fuel Payment Tax Recovery BGA.

Figures may not sum due to rounding.

66. Table 15 shows the latest forecasts of the net effect on the Scottish Budget 2026-27 for Social Security benefits and indicates how the forecast net position has changed since the Scottish Budget was published in January 2026.

67. The change in the forecasts for the BGA reflect the difference between the BGA used in the Scottish Budget for 2026-27, and the forecast of the BGA provided at the UK Spring Forecast in March 2026. As Scottish expenditure forecasts haven’t been published since the Scottish Budget, they are unchanged in Table 15. The actual in-year reconciliation will be based on updated BGA forecasts provided alongside the next set of OBR forecasts in October 2026.

Table 15: Forecast Social Security Net Budget Position for 2026-27 (£ million)

Note 1: BGAs for Industrial Injuries Disablement Scheme includes Industrial Death Benefit

Note 2: Winter Fuel Payment BGA forecasts include the Winter Fuel Payment Tax Recovery BGA

Figures may not sum due to rounding