Piloting an Approach to Identifying Preventative Spend in the Scottish Budget

Chapter 1 - Introduction

In the 2026 Scottish Spending Review, the Scottish Government outlined a commitment to develop an approach to identifying and tracking preventative spend across the Scottish Budget by Summer 2026, with a view to integrating this into ongoing budgeting by December 2026.^[4]

To support the delivery of this commitment, the Scottish Government Prevention Unit developed a Preventative Budgeting Tool, which provides a method for “tagging” budget information against a consistent definition of prevention. It also allows this budgeted spend to be linked to outcomes and drivers of public service demand.^[5]

This report sets out the Preventative Budgeting Tool methodology, how it was used in the pilot programme, and next steps in developing a full Budget estimate and informing upcoming Budgets.

The pilot programme will form the basis for a wider assessment of planned preventative spend across the full Budget 2025/26 for Summer 2026, with a view to rolling this forward into the 2026/27 Budget by Autumn 2026 and the 2027/28 Budget process (Winter 2026).

Background and Strategic Context

‘Prevention’ is often used in different contexts to mean slightly different things – the Scottish Government Prevention Unit defines prevention as “activity intended to stop the establishment or escalation of problems that lead to negative outcomes for people”.^[6] It is a key lever for improving public service outcomes and helping manage fiscal pressures in the short and long term.

Prevention has grown in focus in recent decades, in particular following the 2011 Christie Commission on the future delivery of public services, as a way of delivering better outcomes for people, and reducing fiscal pressures on Government in a time of tighter budgets.^[7]

The need for renewed efforts to support the shift towards prevention has been recognised by the Scottish Government and is reflected in a number of key strategic documents. For example, prevention features heavily in the Public Service Reform Strategy^[8] and Population Health Framework.^[9]

At present, there is no comprehensive overview of Government spending on prevention. This limits the ability of Scottish Government and the wider public sector to understand what prevention we invest in, how these activities link to outcomes, and how spend changes over time.

The Prevention Unit developed the Preventative Budgeting Tool to make prevention easier to identify, track and incorporate into analysis and strategic decisions. In particular, it can help measure progress against key commitments, such as the Public Service Reform Strategy commitment to “track that the proportion of spend on prevention increases and the resultant spend on acute/crisis decreases”^[10]. The budget tagging approach would also support, in conjunction with other evidence, associated Public Service Reform Strategy actions to “change how we budget… to support upstream investment”.

Objectives of the pilots

The pilot programme has two main objectives:

1. Test the method - to trial an approach for identifying planned preventative spend (including the levels of prevention) within budgets across the Scottish Government.

2. Explore how this approach could inform future Scottish Budgets – to understand how the exercise could be broadened across the full Scottish Budget and integrated into ongoing budget reporting and support future decision making.

Structure of this report

This report is structured into the following sections:

• Methodology (Chapter 2) – sets out the Preventative Budgeting Tool, definitions used, budget data, and application of definitions to this data.
• Results (Chapter 3) – presents initial results from the pilot process on planned preventative spend, level of prevention and outcomes impacted.
• Reflections on the Tagging Process(Chapter 4) – covers feedback on the process for applying the Preventative Budgeting Tool in practice, and how this was incorporated into the latest version of the Tool.
• Next steps and Development (Chapter 5) – describes next steps to evolve the preventative budget tagging work into a full estimate of the planned preventative spend across the Scottish Budget 2025/26 for Summer 2026, before rolling this forward to 2026/27 and then informing the Budget 2027/28 process.