Piloting an Approach to Identifying Preventative Spend in the Scottish Budget

Executive Summary

Introduction/ Background

In the Scottish Spending Review 2026, the Scottish Government set out plans to develop a system for identifying and tracking preventative spend across the Scottish Budget by Summer 2026, with a view to integrating this into ongoing budgeting by December 2026.^[1] This commitment was originally stated in the Public Service Reform Strategy 2025, which includes a commitment to “track that the proportion of spend on prevention increases and the resultant spend on acute/crisis decreases”.^[2]

At present, there is no comprehensive overview of Government spending on preventative activity. This limits the ability of Scottish Government and the wider public sector to understand what prevention we invest in, how this investment links to outcomes, and how this changes over time.

The Scottish Government Prevention Unit developed a Preventative Budgeting Tool, which provides a method for “tagging” budget information against a consistent definition of prevention. ^[3] It also allows this spend to be linked to outcomes and drivers of public service demand.

The Preventative Budgeting Tool was tested through a pilot programme, which ran between December 2025 and May 2026, focussing on identifying planned preventative spend within a range of “Level 4” lines (the most detailed published data available) across the Scottish Budget 2025/26.

This report sets out the results from the pilot process, including the Preventative Budgeting Tool methodology, how it was used in the pilot programme, what the initial results were and what next steps are for developing this into a Budget-wide estimate.

Methodology

The preventative budgeting pilots test an approach for identifying data held on planned spend within the published 2025/26 “Level 4” lines of the Scottish Budget (the most detailed published budget data available for the Scottish Budget), and “tagging” these lines based on a classification of prevention developed by the Prevention Unit.

The pilot programme was designed to cover a sub-set of 2025/26 Level 4 Budget lines, including a mix of budget lines across different portfolios, and different types of planned spend. The final pilot study scope covered 99 Level 4 budget lines, spread across 7 portfolios, accounting for around 21% of the total Scottish Budget lines and 41% of Scottish Budget spending. Included in this was a separate pilot programme with 7 territorial NHS Boards and 2 national NHS Boards.

Given the variance in the size, shape and detail provided for each “Level 4” budget line, a process was developed for determining whether a budget line could be sufficiently tagged at the Level 4, or whether further breakdown and analysis could provide a more nuanced tagging of the line.

The budget information was then tagged based on the Scottish Government Prevention Unit prevention classification which has two stages:

• Spend category – whether the spend is preventative, enabling prevention, acute/responsive/treatment, or other/general service activity
• Level of prevention – if preventative, the spend is categorised relative to a “level” of prevention. This is based on the “Primary, Secondary, Tertiary” prevention framework. The levels correspond to the placement of the activity in relation to a problem, with primary prevention stopping a problem in the first place (e.g. a vaccine), secondary prevention responding to those at-risk of experiencing a problem (e.g. legal aid for those at-risk of entering the court system) and tertiary prevention reducing the severity of a problem or reoccurrence after it has occurred (e.g. rapid re-housing support for those at risk of homelessness).

Allocating budget lines to these categories was determined by two main criteria - the primary purpose of the budget line (whether or not its main purpose is to prevent a negative outcome) and target population (e.g. population wide or targeted).

Note, while the focus of this report is on identifying direct, primary-purpose prevention, it is important to consider all spend in any broad analysis of prevention across the full system of Scottish public spending. Other types of activity, such as acute/ responsive/ treatment activity, have a role to play in prevention, even if not directly. For example, the way responsive hospital services are provided can have an indirect impact on prevention.

The pilot studies focussed on resource spending, meaning other elements of spend, such as capital spend, were not covered in the scope of this report. The pilots also focussed on opening budgets, prior to any baselining or adjustments during the financial year. This allowed the pilot to focus on data that closely resembles what would be available in an upcoming budget. Capital and budget adjustments will be covered in future work.

Strengths and Limitations of Approach

The preventative budgeting approach deployed as part of the pilot study has been designed to balance proportionality with detail. The benefit of this approach is that it provides a framework for budget tagging that can be systematically applied quickly, using existing budget structures, while balancing the need to produce a broader assessment over the entire Scottish Budget.

There are, however, some limitations with this approach, which mean the estimates produced are provisional and experimental. In particular, the varied nature of data collection for each level 4 line and the subjectivity involved in applying a classification of prevention mean there is some margin for error and limits on the extent to which results can be compared. The estimates are likely to be revised as the approach is expanded across the full Scottish Budget and further refined over time.

Results

The results showed that around £3.0bn of planned spending across the pilots could be tagged as preventative (around 15% of total planned spending piloted), with a further £0.8bn tagged as enabling prevention (4% of total planned spending piloted). Acute/responsive/ treatment and other/ general service categories made up the remaining 81% of the planned spend piloted. (Figure 1).

Of the budgeted spending covered by the pilots, around £0.5bn was tagged as primary prevention, accounting for 18% of total planned preventative spend and 2.7% of overall budgeted spend (Figure 2). The majority was classified as secondary prevention, with £1.3bn tagged under this category (around 42% of the total budgeted preventative spend and 6.4% of overall spend). This was followed closely by tertiary prevention, with around £1.2bn recorded (around 40% of total budgeted preventative spend and 6.1% of total budgeted spend overall).

Looking across portfolios, there was planned preventative spend identified in all of the 7 portfolios we piloted. The overall results in the pilot were driven largely by the Health and Social Care Portfolio, which includes large budget lines for territorial and national NHS Boards (accounting for around three quarters of spend considered in the pilot), as well as large spend areas like primary care, mental health, dental and community eyecare. There were also large budget lines in other portfolios too, such as the Pupil Equity Fund (in Education and Skills portfolio) and Legal Aid Fund (Justice and Home Affairs portfolio).

We also tagged the budgeted preventative spend against a set of drivers of demand for public services. Budget lines could be tagged against one “main” driver of demand targeted, along with any secondary impacts on other drivers. This exercise was only done on Scottish Government portfolio pilots (excluding NHS Board pilots). We found that the planned preventative spend was largely targeted at drivers that reflected the remits of the portfolios included in the pilot. For example, there was a high level of direct spend targeted at adult ill-health, child ill-health, and offending. However, a large amount of planned preventative spend impacted a number of drivers indirectly, such as inequality/ poverty, social isolation and discrimination.

Next Steps

In line with the intention set out in the Public Service Reform Strategy and Spending Review, the pilot programme described in this report will be expanded to cover the full 2025/26 Scottish Budget over Summer 2026, with a view to rolling this forward into 2026/27 and exploring how this information can be used as an input, alongside other evidence, to support the Budget process for 2027/28.

The preventative budgeting approach set out in this report is the first step in developing a system for identifying planned preventative spend across the Budget, linking this to outcomes, and eventually building in other evidence that supports budget decision making.

The Prevention Unit will also be looking to further develop the preventative budget tagging approach going forward. For example, the Preventative Budgeting Tool will also be developed in future to consider further metrics related to impact, timescales and quality of evidence. This could also consider other elements important to Public Service Reform, such as how budget lines reflect person-centred service provision, or the extent to which activities bring decisions around prevention closer to communities.