Piloting an Approach to Identifying Preventative Spend in the Scottish Budget

Annex E – Deputy First Minister, Economy and Gaelic Portfolio Pilot

Introduction

As part of the preventative budgeting pilot programme, a pilot study was developed with the Deputy First Minister, Economy and Gaelic (DFMEG) Portfolio to understand how prevention features in spending across the portfolio. This Annex covers the approach taken in the pilot and some of the aggregate results generated from the pilot study.

Approach

The pilot was designed to cover a sub-set of Level 4 budget lines in the DFMEG Portfolio that cover a mix of different types of spend categories (preventative and non-preventative) and different levels of prevention (if preventative).

The final scope included 7 Level 4 budget lines (around £166m), which is around 12% of the total number of Level 4 budget lines in DFMEG, and 27% of the total value. The lines includes are shown in Figure 30.

• Employability and Workforce Skills
• Fair Start Scotland
• Fair Work and Labour Market Strategy
• Industrial Transformation
• Innovation, Enterprise and Entrepreneurship
• Social Enterprise
• Growth Accelerator

The Level 4 Budget lines included in the pilot varied significantly in terms of value, and scope of activities covered within each line. In some cases, a simple tag was applied to the Level 4 Budget line. This was the case for Fair Start Scotland, Industrial Transformation, Innovation Enterprise and Entrepreneurship and Growth Accelerator. For some of the larger budget lines, we used additional budget information or additional data to apportion activity. This approach was used for lines such as Employability and Workforce Skills, Fair Work and Labour Market Strategy, and Social Enterprise.

Figure 31 – Deputy First Minister Economy and Gaelic Portfolio examples of planned spend within each element of the classification

Classification: Examples

Primary Prevention

• Projects for supporting fair work principles in the workplace

Secondary Prevention

• Employability support linked to families with children in poverty
• Noone left behind

Tertiary Prevention

• Specialist Employability support
• Fair Start Scotland

Enabling

• Social Enterprise funding
• Noone left behind support costs

Acute/ responsive/ treatment

• N/A

Other

• Innovation, enterprise and entrepreneurship
• Growth Accelerator
• Industrial Transformation
• General policy/ staff costs
• Fair Work Convention

Results

This section sets out the results from the budget tagging exercise for those budget lines covered as part of the DFMEG portfolio.

Note these results should be taken as preliminaryand could change between the pilot phase and the final budgeted preventative spend estimates for 2025/26 planned for Summer 2026 . Caution should also be taken when drawing broader conclusions and comparing against other portfolios, given the exercise only covers a sub-set of the budget. The final aggregate results for the full portfolio (planned Summer 2026) may look significantly different from the sample of pilot lines.

Preventative spend

The pilot study found that around 54% of DFMEG budgeted 2025/26 spending covered by the pilot can be defined as preventative (around £90m), while 6% was “enabling” (£9m), and 40% “Other/ general service” (£66m) (Figure 32). No spend was tagged as acute/ responsive.

Level of prevention

Of the planned preventative spend recorded, the majority of spend was classified as secondary prevention (Figure 33). Around 90% of the total planned preventative spend was spent on secondary prevention (£81m). There are smaller amounts recorded as primary and tertiary prevention (1% and 9% respectively).