Prevention toolkit

Tool 4 – Preventative Budgeting Tool

The Tool

• The Preventative Budgeting Tool provides a way of identifying spend within an organisational budget and following a structured approach to budget tag spend as preventative, and at what level.

Use this to

• Identify within a budget what spend could be considered “preventative” vs other types of spend (e.g. acute/ responsive/ treatment spend)
• Develop estimates of planned preventative spend that can be tracked over time.

You end up with

• An aggregate estimate of the total proportion of a budget that can be tagged as preventative, and at what level of prevention.
• A detailed dataset that can be used as the basis for further analysis including links to outcomes and impact and provide a structured approach to budget decisions.

Who can use this?

• The Preventative Budgeting Tool has been developed to be applicable to any budget, including Scottish Government portfolio areas, public sector organisations (e.g. health boards and local authorities), and non-public sector budgets (e.g. third sector organisations).

How does this tool support prevention thinking?

• Preventative budget tagging can be useful in identifying how planned spending could contribute to preventing negative outcomes and how this is changing over time.
• In conjunction with evidence of the impact, it can provide a tool for prioritising spend to shift activity upstream.

Using the Tool

The Preventative Budgeting Tool was produced by the Scottish Government Prevention Unit, building on an established approach from the Chartered Institute for Public Finance and Accounting.

The Prevention Budgeting Tool walks users through a process of breaking down the data within a given budget, organising this into a structured format, and then tagging this in line with a clear definition of prevention.

This can be seen as the first two steps (Figure 7) in the four step process set out in our Preventative Budgeting Tool. Step 3 on outcomes tagging is considered in Tool 4 (Outcomes Tagging).

Figure 7 – Preventative Budgeting Tool steps

Step 1 - Organise budget data

Identify budget data to be used in tagging Organise this into a consistent format for tagging process

Step 2 - Preventative budget tagging

Follow structured process for classifying each budget line by "spend category" (preventative or other) and "level of prevention"

Step 3 - Outcomes tagging

Assess impact of activity on outcomes Score evidence underpinning outcomes tagging

Step 4 - Results

Generate aggregate estimates for planned preventative spend interrogate results and interactions with "other" spend.

This approach has been designed to provide a “top down” assessment of planned preventative spend within a budget. This type of approach involves applying a standardised set of categories to budget lines to track and monitor shifts in budget allocations over time. This allows for a tagging approach to be applied at a high level to budget lines in a proportionate way, even though much of the spend is allocated to other organisations, and not spent by Government directly. This contrasts to a “bottom up” approach, which focusses on a detailed mapping of services to classify activities and matching this to actual spend on those activities. This is more appropriate to ‘front-line’ organisations where services/activities are delivered. The preventative investment guidance developed by CIPFA focusses on a “bottom up” approach.

Step 1 – Organise budget data

The first step in our process is to identify the budget data we are looking to classify, and organise this into a format to allow each activity to be assessed in line with our prevention classification.

The budget information used should reflect how your organisation organises and records planned spending, and can include as many tiers/ levels of aggregation as is useful. We follow a simple three-tier structure suggested by CIPFA, which works well in most contexts:

• Tier 1: Department or Directorate - for example: the "Education and Skills" portfolio in Scottish Government
• Tier 2: General service or activity area - for example "Whole Family Wellbeing Fund"
• Tier 3: Specific disaggregated service - for example "Family Group Decision Making".

Note for more complex budgets, you may wish to add further tiers. In some cases, particularly for organisations like local authorities or NHS Boards, the existing organisational cost hierarchies and structures can be used rather than following the format set out above.

Ideally, the budget information identified should focus on activity (rather than service level information e.g. staff costs), balance detail and proportionality, and be regularly recorded to make it easier to update any assessments in future.

Step 2 – Preventative budget tagging

Once the budget data has been identified and organised, the next step is to tag the planned spending in line with the classifications set out in the Preventative Budgeting Guidance.

To support the consistent classification of preventative spend, it is useful to consider two things – the target population of a policy and the primary purpose.

• Population group targeted - The target population is the specific group of people supported by the activity.
• Primary purpose of the spend – is the intervention aiming to stop a problem from happening, escalating, or getting worse as its primary purpose (e.g. a vaccine), or is it responding to an immediate problem (e.g. accident and emergency).

Using the target population and primary purpose of the spend, users have four options for classifying what “spend category” the spend is (Figure 8).

Figure 8 – Classification of Spend Category

Spend category: Preventative

Description: Spend designed to increase the resilience of individuals, communities and environments, and reduce the likelihood or severity of future demand for reactive activity.

Spend category: Enabling

Description: Spend that is not in itself preventative but is required to support or facilitate the delivery of a preventative activity.

Spend category: Acute/ Responsive

Description: Spend that responds to a problem but does little or nothing to reduce the likelihood or severity of future demand for reactive activity.

Spend category: General service/ other

Description: Spend designed to support basic operations but does little or nothing to reduce the likelihood or severity of future demand for reactive activity.

If an activity was classified as “preventative” in the previous section, then it must also be classified in line with our definitions of the levels of prevention (Figure 9).

Figure 9 – Levels of Prevention classification

Level of prevention: Primary prevention

Description: Population-level action, or action which targets a large subset of the population, to build resilience and stop known risks from developing into problems

Level of prevention: Secondary prevention

Description: Targeted action to identify and respond to early signs of a problem to prevent escalation

Level of prevention: Tertiary prevention

Description: Intervening once there is a problem to stop it from getting worse or recurring in future

Step 3 – Outcomes tagging

The preventative budget tagging can be used in conjunction with outcomes tagging to understand the potential outcomes impacted by the budgeted preventative spend.

We cover that in the next tool (Tool 5), given the outcomes tagging can be viewed as a standalone tool (not dependent on the prevention tagging).

We are also exploring the additional of impact measures in future versions of the tool. More detail on future developments is outlined in the Prevention Unit report Piloting an Approach to Preventative Budgeting in the Scottish Budget.

Step 4 – Results and Narrative

Once you have tagged your budget using the preventative budgeting approach, you will be able to produce an overarching estimate of the proportion of the budget that is planned preventative spend vs other types of activity, and (if preventative) what level of prevention.

Some key considerations when presenting results and developing narratives around spending

• Be clear on pros and cons of the tagging approach – this approach has the advantage of being able to classify and segment budgets in a structured way, but also involves some subjectivity and is only as good as the budget data available to the user.
• Consider the implications of both “preventative” and other types of spend – Typically, a lot of activity has indirect links to prevention, even if it is not in the scope of our prevention category. For example, if activity is categorised as “acute/responsive/ treatment”, the way these services are provided can have an indirect impact on prevention.
• Bring in multiple perspectives - As you go through the tagging you should bring in perspectives of those delivering policy, particularly if being led by finance or analysts.
• Building in tagging of outcomes and impact - Finally, the preventative budget tagging is the first step in developing an understanding of preventative activity. The next step is to understand the outcomes of spend (what it is that the activity seeks to prevent) and then build the evidence on what impact that spend actually has. The Tool set out on outcomes tagging (Tool 5) and will be developed to consider impact measures in future. Furthermore, Tool 6 and Tool 7 in this Toolkit outline how you can quantify the benefits of prevention (Tools 6 and 7) to support assessment of impact.

Where to find more information/ support

More information is provided in the Prevention Unit Preventative Budgeting Tool and Guidance.

The Prevention Unit have also published a Preventative Budgeting Pilot report, which applied the tool to a range of Scottish Government portfolios covering around 40% of the Scottish 2025/26 Budget by value. Further work is planned to develop a Budget-wide estimate of spend to be reported annually.

This approach builds on similar approaches developed by Chartered Institute for Public Finance and Accounting, who deploy the “bottom up” approach to mapping spend and classifying.

Other Resources

• Public Service Reform Strategy - The Public Service Reform Strategy sets out Scottish Government commitments on to develop a system for preventative spend.
• Scottish Spending Review - The commitment to developing a preventative spend estimate across the full Scottish Budget was set out in the Scottish Spending Review 2026.
• The Scottish Parliament - The Scottish Parliament Information Centre (SPICe) produced a briefing on preventative spend, including the plans of the Prevention Unit.