Scotland's fiscal outlook: medium-term financial strategy
This is the seventh Medium-Term Financial Strategy published by the Scottish Government. It provides the economic and fiscal context for the Scottish Budget and sets the medium-term strategy for sustainable public finances.
Annex C: Resource Spending Outlook
This annex provides a detailed breakdown of the resource spending forecast by spending area (Table C.01), and the key assumptions made in the forecast.
| (Figures in £million) | 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 |
|---|---|---|---|---|---|
| Social Security Assistance | 6,772 | 7,544 | 7,976 | 8,379 | 8,825 |
| Health and Social Care | 20,200 | 21,459 | 22,487 | 23,635 | 24,810 |
| Local Government | 12,824 | 13,164 | 13,516 | 13,861 | 14,207 |
| Other | 12,828 | 12,772 | 13,153 | 13,577 | 13,881 |
| Total | 52,623 | 54,938 | 57,132 | 59,453 | 61,723 |
| Central funding outlook | 52,623 | 53,975 | 55,235 | 57,100 | 59,099 |
| Modelled shortfall | - | (963) | ( 1,897) | (2,353) | ( 2,624) |
Key forecasting assumptions
Social Security Assistance
The Social Security Assistance forecast mirrors the SFC’s June 2025 forecasts, excluding Discretionary Housing Payments (DHPs) and Employability, but including the illustrative forecast for Pension Age Winter Heating Payment policy change, announced in June 2025.
Health and Social Care
The Health and Social Care forecast assumes 3.3 per cent real growth per year on average across the forecast period.
Local Government
The Local Government forecast assumes 3.3 per cent real growth per year on average for social care non-pay spending, Public Sector Pay Policy to social care pay and real-terms growth to remaining Local Government spending.
Other Scottish Government spend
All remaining Scottish Government spending is grown in line with GDP deflators, except for:
- Non-HSC, non-Local Government pay and workforce spending, where pay is grown in line with Public Sector Pay Policy unless pay deals have been agreed, and workforce growth of 0 per cent is assumed.
- Targeted above inflation growth for some specific spending commitments.
- SFC forecasts for Discretionary Housing Payments and Employability.
Contact
Email: Scottish.Budget@gov.scot