Fiscal sustainability delivery plan

Scope of the Delivery Plan

The Delivery Plan is structured around the three pillars of the Strategy and sets out the actions underway and planned across each of the three pillars to achieve our aim of fiscal sustainability.

All three pillars of the Strategy play an important role in strengthening the public finances. On economic growth, we highlight the economic interventions that are expected to grow the economy and expand and broaden the tax base; and on tax, we set out a range of priorities that will contribute to ensuring the tax system raises the revenue needed to achieve our priorities. In the short- to medium-term, however, the most immediate lever by which we can improve fiscal sustainability is public spending. This is reflected in the scale and scope of those activities. The Delivery Plan’s accompanying tables set out the actions and initial delivery information.

Strengthening the public finances requires action from across all of government and beyond. As such, a number of government strategies and programmes provide the basis for a range of the actions in this Delivery Plan. For Pillar 1, this includes the Public Service Reform (PSR) Strategy^[4], which was published on 19 June 2025. The PSR Strategy sets out clear commitments to change our system of public services to unblock barriers to change – to be preventative, to better join up and to be efficient. The PSR Strategy includes an ambitious challenge for the Scottish Government and public bodies to make significant savings in the next five years on the cost of corporate functions.

Delivery of efficiency and improvement is also a key focus for the Health and Social Care portfolio and reflects the commitment to ensure use of core resources is optimised and best value is delivered across NHS Scotland. Health efficiency and service renewal is being taken forward through the NHS Scotland Operational Improvement Plan^[5], and through the Health and Social Care Service Renewal Framework^[6], and Population Health Framework^[7], which were both published on 17 June 2025.

Scotland’s National Strategy for Economic Transformation^[8] and Scotland’s Tax Strategy^[9] provide the basis for the range of actions at Pillar 2 and Pillar 3 respectively, to grow the economy and broaden the tax base, as well as improve the operation and performance of the existing tax system and to deliver sustainable and growing tax revenues.

For Social Security, in Scotland, we have designed and implemented a radically different social security system built around human rights. The Scottish Government believes that this system should be used to tackle poverty and protect people, with the resources we have, from the worst impacts of UK Government cuts to reserved welfare benefits and to invest in improved outcomes for the people of Scotland, providing vital assistance to help people on low incomes, disabled people and their carers, and older people.

We are committed to protecting benefits spending, recognising that this does therefore have an impact on the wider Scottish Budget. Through the actions set out in Pillar 1, we will continue the ongoing work to make improvements to the way we process and deliver benefits, and we will consider improvements to the way we manage reviews of clients' awards.

Actions to set the capital programme on a sustainable path are not included in this Delivery Plan. This is because in December 2025, the Scottish Government will publish a new infrastructure investment pipeline building on the pipeline set out in the 2021 Infrastructure Investment Plan^[10] (IIP). This will be informed by the multi-year capital allocations underpinning the Scottish Spending Review. Future spending reviews will add to, and adjust, the infrastructure pipeline. The original pipeline was fully costed at the time in the accompanying Capital Spending Review^[11]. While many projects have been successfully delivered, high levels of inflation and lower than expected capital allocations from the UK Government mean that some are no longer deliverable within the planned timeframe. The publication of the new pipeline will ensure our capital budget is on a sustainable trajectory.

Regarding Local Government, the Scottish Government is committed to supporting Local Government’s own leadership and ambition to take forward transformation to ensure sustainability of services delivered at a local level, both within and between councils. We remain committed to a Fiscal Framework between Scottish Government and Local Government in addition to delivering the Local Governance Review alongside COSLA (Convention of Scottish Local Authorities), including the development of Single Authority Models and Democracy Matters.

As set out in the Verity House Agreement, Scottish Government and Local Government have a shared commitment to strategic reform. We will continue to work with Local Government on the basis of mutual trust and respect to deliver our ambitious programme of reform.