Fiscal sustainability delivery plan
Plan bringing together the key actions the Scottish Government is taking to deliver the fiscal strategy over the next five years, from now until financial year 2029-2030.
Tables
Pillar 1: Ensuring public money is focused on delivering government objectives, underpinned by reform and prioritisation to maximise impact
Measure: Increasing public value - ensuring funding is fully focused on delivering Scottish Government priorities and maximising impact of available investment.
Actions
- Identify and prioritise higher impact spending, with a specific focus on those areas of spend that meet Ministerial priorities, including achieving statutory targets on child poverty and climate emergency.
- Review all spending lines across Government and identify savings options which allow outcomes to be delivered for less resources.
- Improve the evidence base for the impact of existing spending and new spending proposals, to drive evidence-based investment/disinvestment decisions.
- Review opportunities to target existing spending more effectively to provide maximum support to those who need it most.
- Review options to more effectively raise revenue from government services.
Milestone(s)
Delivery of the Scottish Spending Review.
Delivery of the draft 2026-27 Scottish Budget.
Timescale
By Dec 2025 with further actions over the forecast period to 2029-30.
Further detail
See Annex E of the MTFS for the Spending Review Framework -
The Scottish Government's Medium-Term Financial Strategy
Responsible
Scottish Government.
Measure: Efficiencies and productivity - business improvement and increased productivity to secure the same or better outputs for lower cost.
Action
Planning for a managed downward trajectory for the devolved public sector workforce in Scotland (0.5 per cent reduction on average per annum over the next five years), with actions taken forward under:
- Workforce planning
- Workforce Management Policy and Control Framework
- Promoting best practice and guidance for existing severance policy
- Redeployment
- Improving transparency of workforce information
Milestone(s)
Expected on average 0.5 per cent reduction each financial year to 2029-30.
Timescale
To the end of the forecast period 2029-2030.
Responsible
Scottish Public Sector.
Measure: Efficiencies and productivity – business improvement and increased productivity to secure the same or better outputs for lower cost.
Action
Ensure the Public Sector Pay Policy continues to set the framework for fair and sustainable pay increases for staff, with a focus on multi-year pay metrics.
Milestone(s)
Update of Public Sector Pay Policy
Timescale
To be published alongside the 2026-27 Scottish Budget.
Further detail
Scottish Budget 2025 to 2026: public sector pay policy
Responsible
Scottish Government.
Measure: Efficiencies and productivity - business improvement and increased productivity to secure the same or better outputs for lower cost.
Action
Take forward wider public sector efficiencies, including a focus on reducing costs of corporate functions through the Public Service Reform Strategy, and considering all areas of service delivery.
Milestone(s)
Milestones being developed.
Timescale
To end of forecast period 2029-30.
Further detail
Scotland's Public Service Reform Strategy: Delivering for Scotland - gov.scot
Responsible
Scottish Public Sector.
Measure: Efficiencies and productivity - business improvement and increased productivity to secure the same or better outputs for lower cost.
Action
Social Security efficiencies through operational delivery improvements, investing in digital, and tackling fraud and error where it occurs.
Milestone(s)
Milestones being developed.
Timescale
Efficiencies ongoing throughout the forecast period and beyond.
Further detail
To be reported on in the Social Security Scotland annual business plan 2025-26.
Responsible
Social Security Scotland.
Measure: Efficiencies and productivity - business improvement and increased productivity to secure the same or better outputs for lower cost.
Action
Deliver NHS Board 3 per cent recurring savings against core funding, supported by a continuous programme of efficiency and productivity opportunities, and enabled by reform.
Milestone(s)
3 per cent annual recurring efficiency savings.
Timescale
Each financial year to end of forecast period 2029-30.
Further detail
NHS Scotland operational improvement plan - gov.scot
Responsible
NHS Scotland.
Measure: Efficiencies and productivity - business improvement and increased productivity to secure the same or better outputs for lower cost.
Action
Use the 2025-26 Invest to Save Fund to drive efficiencies and reform, with the intention to build on this in 2026-27 and future years.
Milestone(s)
2025-26 Awards announced
Timescale
Each financial year to end of forecast period 2029-30.
Further detail
Scottish Budget 2025-2026: Finance Secretary's statement - 4 December 2024 - gov.scot
Responsible
Scottish Government
Measure: Service reform - changing the way we deliver services to secure the same or better outputs for lower cost in the longer term.
Actions
- Health and Social Care reform - driven through the Health and Social Care Service Renewal Framework - reform coming from clear prioritisation, innovation, reforms of models of care, systems and structures, and how we monitor performance.
- Social Security Disability Benefits - assess whether the current award review process is working as intended and if any changes may be required. This will aim to ensure the review process continues to meet the eight principles contained in the Social Security (Scotland) Act 2018 including that the system is to be efficient and deliver value for money, whilst maintaining our commitments to supporting disabled people, treating clients with dignity, fairness and respect, and maximising benefit take-up.
- Justice reform - driven through the Vision for Justice three-year delivery plan, our vision is for a just, safe resilient Scotland, with reform expecting to positively impact on fiscal sustainability coming from actions that use a full range of solutions to reduce the need for, and pressure on, justice services.
- Education and Skills reform - Education Reform and Post-School Education and Skills Reform programmes will simplify the Education public body landscape, reduce duplication of services, implement digital transformation and strengthen skills planning.
- Joined up models of service delivery – changing our model of service delivery, particularly for those facing disadvantages, by better integrating support and reducing duplication.
Milestone(s)
Identification of the milestones relevant to the FSDP in progress.
Timescale
Various: medium-term (3-5 years) to long-term (>5 years).
Further detail
Health and Social Care Service Renewal Framework - gov.scot
Vision for Justice in Scotland: three year delivery plan - gov.scot
Education (Scotland) Bill | Scottish Parliament Website
Scotland's Public Service Reform Strategy: Delivering for Scotland - gov.scot
Responsible
Scottish Public Sector.
Measure: Prevention - investing in the most impactful preventative spend, to reduce service demand in the long term.
Actions
- The Population Health Framework - building on the positive and innovative actions we are already taking across areas creating a more prevention focused system.
- Through ‘Best Start, Bright Futures’, continue to drive forward cross-government action on child poverty.
- The Early Child Development Transformational Change Programme to improve early child development for the pre-birth to three period.
- Tackling poverty more generally through completing the Social Security Programme.
- Taking early action to prevent young people entering the criminal justice system and prevent reoffending and support rehabilitation.
- Introducing legal duties to prevent homelessness; delivering homelessness prevention pilots; investing in discretionary housing payments to help people remain in their homes; and increasing the supply of affordable housing.
Milestone(s)
Identification of the milestones relevant to the FSDP in progress.
Timescale
Various: medium-term (3-5 years) to long-term (>5 years)
Further detail
Scotland's Population Health Framework - gov.scot
Best Start, Bright Futures: tackling child poverty delivery plan 2022 to 2026 - gov.scot
Ending homelessness together: updated action plan - October 2020 - gov.scot
Early child development transformational change programme - gov.scot
Responsible
Scottish Public Sector.
Pillar 2: Supporting sustainable, inclusive economic policies with the greatest potential to grow Scotland’s economy, expand and broaden the tax base to fund public services
Measure: Increasing aggregate business activity - by supporting Scottish businesses and making it easier to do business through providing regulatory certainty and stability.
Actions
- Implement a Six Point Export Plan with SDI to support exporters.
- Support women-led businesses to export more.
- Deliver two Green Freeports and two Investment Zones.
- Boost planning capacity and reduce barriers to delivery.
- Implement the recommendations of the Housing Investment Taskforce.
- Support our transport network to become more available, affordable, and accessible.
- Delivering a financial support and guidance scheme to support industry clusters to emerge, grow, and remain internationally competitive.
Milestone(s)
Actions expected to be in delivery by May 2026.
Timescale
National Strategy for Economic Transformation to 2032.
Further detail
Responsible
Scottish Government.
Measure: Increasing employment levels - through improving access to good, well-paid employment and attracting investment to start new and grow existing employment opportunities in Scotland.
Actions
- Investing up to £90 million in 2025-26 for the delivery of devolved employability services.
- Investment of up to £500 million over five years in offshore wind.
- Edinburgh Innovation Hub will grow innovation-led enterprise, aiming to deliver around 100 new start-ups over its lifetime.
- Delivering Scotland’s Migration Service and continuing to make the case for tailored migration routes for Scotland.
- Launching ‘Invest Scotland’, a new portal that will showcase investment opportunities and information for investors.
- Transform the number of women starting and scaling businesses by investing up to £6 million to implement Ana Stewart and Mark Logan’s Pathways report.
Milestone(s)
Actions expected to be in delivery by May 2026.
Timescale
National Strategy for Economic Transformation to 2032.
Further detail
Responsible
Scottish Government.
Measure: Increasing average wages - through improving skills and attracting high-wage sectors to Scotland .
Actions
- New national approach to skills planning and reforming the education and skills funding system.
- Launching AI Scotland, including a national AI adoption programme for SMEs.
- Continue to provide additional targeted support across a range of sectors including investing in offshore wind, social care, engineering, and advanced manufacturing.
- Providing £3.5 million to colleges to deliver the pipeline of skills our economy and public services need with new programmes focused on care and offshore wind.
- Widening access to higher education for students from the most socio-economically disadvantaged communities.
- Award new regional contracts alongside delivery of the £600 million+ R100 programme, so more households, communities and businesses can access reliable gigabit connectivity.
Milestone(s)
Actions expected to be in delivery by May 2026.
Timescale
National Strategy for Economic Transformation to 2032.
Further detail
Responsible
Scottish Government.
Pillar 3: Ensuring a strategic approach to tax revenues which considers the longer-term impact of our tax choices and competitiveness
Measure: Priorities to improve the operation and performance of the existing tax system.
Action
Expand the evidence base for Scottish Income Tax.
Milestone(s)
Publish research on income tax and business competitiveness.
Timescale
By end Q4 2025.
Further detail
Scotland's Tax Strategy: Building on our Tax Principles - gov.scot
Responsible
Scottish Government.
Measure: Priorities to improve the operation and performance of the existing tax system.
Action
Work with HM Revenue and Customs (HMRC) to publish evaluations of policy changes to Scottish Income Tax in 2023-24 and 2024-25 tax years.
Milestone(s)
Subject to discussion with HMRC following outturn data becoming available. Initial progress expected mid-2026.
Timescale
2026.
Further detail
Scotland's Tax Strategy: Building on our Tax Principles - gov.scot
Responsible
Scottish Government and HMRC.
Measure: Priorities to improve the operation and performance of the existing tax system.
Action
Review the operation of existing taxes.
Milestone(s)
- Council Tax: a programme of engagement with an objective to build consensus for a coherent option for meaningful and long-term reform: Q2 2025-26: IFS analysis and modelling; Q3 2025-26: consultation launch, town-halls, expert roundtables; Q4 2025-26: analysis of engagement.
- Land and Buildings Transactions Tax (LBTT): a review of the first 10 years of LBTT.
- Scottish Landfill Tax (SLfT): commissioning independent research on the effectiveness of the lower rate of Scottish Landfill Tax.
Timescale
All over 2025 to 2026.
Further detail
Building consensus on Council Tax reform - gov.scot
Scottish Landfill Tax: Lower Rate Review
Responsible
Scottish Government, COSLA, Revenue Scotland.
Measure: Priorities to improve the operation and performance of the existing tax system.
Action
Work in partnership with Local Government, to ensure that local taxes are fair and sustainable, and to explore the creation of more revenue generating powers for local authorities.
Milestone(s)
Scottish Parliament debate
Timescale
2026
Further detail
Scotland's Tax Strategy: Building on our Tax Principles - gov.scot
Responsible
Scottish Government and COSLA
Measure: Priorities to improve the operation and performance of the existing tax system.
Action
Implement the devolved taxes: the Building Safety Levy; Air Departure Tax, Scottish Aggregates Tax.
Milestone(s)
Air Departure Tax: Principles published: 25 June 2025.
Scottish Aggregates Tax: 1 April 2026.
Building Safety Levy: 1 April 2027.
Timescale
2025 to 2027
Further detail
Air Departure Tax - Taxes - gov.scot
Aggregates Levy - Taxes - gov.scot
Building Safety Levy - Taxes - gov.scot
Responsible
Scottish Government and Revenue Scotland
Measure: Priorities to improve the operation and performance of the existing tax system.
Action
Promote Areas of Research Interest to the academic community and other stakeholders working on tax.
Milestone(s)
Roundtable event with academics in June 2025 to help establish an academic network.
Timescale
Ongoing through 2025 and beyond.
Further detail
Scotland's Tax Strategy: Building on our Tax Principles - gov.scot
Responsible
Scottish Government
Measure: Priorities to improve the operation and performance of the existing tax system
Action
Strengthen our approach to Scottish tax compliance in collaboration with HMRC and Revenue Scotland:
- Work in partnership with HMRC through the joint Compliance Working Group to explore future improvements in Scottish Income Tax compliance.
- Work in partnership with Revenue Scotland to deliver Scottish Aggregates Tax and Scottish Building Safety Levy through the use of data and operational insights.
- As part of Revenue Scotland’s Digital Strategy, working to ensure a single end-to-end digital journey for taxpayers and their agents.
Milestone(s)
Milestones being developed.
Timescale
Initial reporting by end of Q1 2026.
Further detail
Scotland's Tax Strategy: Building on our Tax Principles - gov.scot
Responsible
Scottish Government, HMRC and Revenue Scotland.
Measure: Future tax reform - explore opportunities for reform and devolution of tax powers.
Action
Use evidence on the operation of the overall suite of Scottish taxes to develop options and principles for future change.
Milestone(s)
Collate and publish evidence on existing taxes building on materials produced for the next Scottish Budget.
Timescale
Initial steps by the end of Q1 2026.
Further detail
Scotland's Tax Strategy: Building on our Tax Principles - gov.scot
Responsible
Scottish Government.
Measure: Future tax reform - explore opportunities for reform and devolution of tax powers.
Action
On reserved taxes, develop a set of tests that can be applied to the consideration of further devolution of taxes.
Milestone(s)
Initial stakeholder engagement to test ideas and approaches.
Timescale
Initial steps by the end of Q1 2026.
Further detail
Scotland's Tax Strategy: Building on our Tax Principles - gov.scot
Responsible
Scottish Government.
Measure: Future tax reform - explore opportunities for reform and devolution of tax powers.
Action
Undertake a programme of activities relating to framing a discussion on wealth taxation, to scope options for Scotland.
Milestone(s)
Publish initial scoping materials including a literature review.
Timescale
By end of Q1 2026.
Further detail
Scotland's Tax Strategy: Building on our Tax Principles - gov.scot
Responsible
Scottish Government.
Measure: Future tax reform - explore opportunities for reform and devolution of tax powers.
Action
Commission research on international comparative approaches to scope priorities for tax as a lever to encourage positive behavioural change.
Milestone(s)
Collate existing evidence base to inform commission of new research.
Timescale
2026
Further detail
Scotland's Tax Strategy: Building on our Tax Principles - gov.scot
Responsible
Scottish Government
Contact
Email: Scottish.Budget@gov.scot