Scottish Budget - provisional outturn 2025-2026: briefing note - 18 June 2026

Borrowing

9. The Scottish Government undertook no resource borrowing in 2025-26 while capital borrowing totalled £430 million, below our maximum borrowing level of £472 million.

10. Final borrowing decisions are always made at the end of the financial year when there is greater certainty on both the final funding envelope and final spending forecasts.

11. No resource borrowing was assumed to support the 2025-26 position at the point the budget was set and that remained the position through to the end of the financial year.

12. At the Spring Budget Revision capital borrowing was reduced by £42 million from the £472 million set out in the Scottish Budget to £430 million. Final borrowing was consistent with the amounts outlined in the Spring Budget Revision. The reduction in capital borrowing followed emerging underspends in capital projects.

13. Future year borrowing plans remain unchanged and are consistent with the borrowing policy outlined in the 2026-27 Scottish Budget.

14. The fiscal framework limits the tools we have available to achieve balance. Our borrowing powers are restricted. We are unable to borrow to fund additional resource expenditure and are only able to borrow against forecast errors. The annual limit for resource borrowing (subject to the level of forecasting errors realised) in 2025-26 was £629 million with a total limit of £1.834 billion.

15. We can borrow to supplement the capital budget however there remains tight limits on the amounts we can borrow. Our annual capital borrowing limit in 2025-26 was £472 million, with a total cap of £3.145 billion.