Scottish Spending Review 2026

Chapter 2 Delivering on our Priorities

This Spending Review(SSR) focuses on delivering our key priorities:

• Eradicating child poverty
• Growing the economy
• Tackling the climate emergency
• Ensuring high quality and sustainable public services

These priorities are central to decision-making and this is reflected in portfolios’ multi-year spending plans. Within the constrained funding available, we are focusing investment on delivering results across these areas.

2.1 Eradicating Child Poverty

Eradicating child poverty is this Government’s top priority and, as a result of the Scottish Government’s policy decisions, the proportion of children in relative poverty fell in 2023-24, with rates nine percentage points lower in Scotland than the UK average. This SSR builds on our positive impact so far, with investment focused on addressing the key drivers of child poverty reduction and ensuring that support is available for people when and where they need it. To further progress our mission to eradicate child poverty, key actions will include:

• Publishing our third Tackling Child Poverty Plan in March 2026, which will set the path to our statutory child poverty targets, with actions to increase income from employment; increase income from Social Security and benefits in kind; and reduce the cost of living.
• Putting in place a new annual £50 million package of Whole Family Support that will wrap around families and help them into employment and break the cycle of generational poverty. This will further enhance existing support and include support with transport and a dedicated £20 million fund for the Third Sector. A Training Access Fund will provide Scotland’s colleges with additional resources to deliver new and expanded training opportunities. Through the RISE (Raising Income through Skills and Education) initiative, we are providing colleges access to a projected £8 million of funding to deliver new or expanded initiatives to help adult learners get the skills and qualifications needed to secure new employment opportunities. Further to this we will significantly increase our Tackling Child Poverty Fund with over £185 million to be invested over the spending review period to further accelerate action on child poverty. Further details of both will be set out in the third Tackling Child Poverty Delivery Plan.
• Continuing to invest around £1 billion every year through the Local Government settlement to deliver high quality funded early learning and childcare for all 3 and 4 year olds, and eligible 2 year olds.
• Investing in the delivery of a national breakfast club programme across Scotland, as well as expanding after school activities clubs for children. This includes:
  • By August 2027 providing a universal breakfast club offer for every primary school in Scotland. This will give children access to a nutritious breakfast as well as supporting parents to get to work;
  • Continuing to invest over £5.5 million in our Extra Time programme in partnership with the Scottish Football Association (SFA), which currently supports 5,000 children most at risk of living in poverty to access free after school and holiday clubs; and
  • Investing up to £2.5 million per year in further expanding delivery of after school activity clubs, working with the SFA and a range of delivery partners, building on the success of the Extra Time programme.
• Continuing to fund school age childcare services for families most at risk of living in poverty through our Access to Childcare, and Early Adopter Community projects, supporting parents to enter and sustain employment.
• Continuing to invest in the Scottish Attainment Challenge, supporting further improvements to attainment and outcomes of children and young people impacted by poverty. Up to £200 million will be invested in 2026-27, building upon a £1.75 billion investment over the past decade, with continued support to schools a vital investment in young people’s futures to help break the cycle of poverty.
• Continuing our investment in additional initiatives to ease the financial pressure on families and learners, such as free school meal provision for eligible pupils, the School Clothing Grant and the Educational Maintenance Allowances (EMA) which support more young people aged 16 to 19 to continue their learning. In addition, we will continue to provide £21.75 million per year to fund holiday free school meal alternatives for all eligible children across Scotland.
• Investing £90 million per year in employability support throughout the SSR period, prioritising parents and supporting over 22,000 people into work.
• Uprating the Scottish Child Payment to £28.20 for 2026-27 in line with inflation, and adding a premium for under 1s commencing in 2027-28 which will bring the total Scottish Child Payment amount to £40 per week for each eligible child under one year old.
• Supporting the provision of warm, affordable homes with up to £4.9 billion of investment, of which £4.1 billion will be public sector investment, over the next four years. This investment will work to leverage additional new private sector investment to support the delivery of 36,000 affordable homes, and is expected to provide a warm, safe home for up to 24,000 children – a significant contribution to our child poverty mission while helping families leave unsuitable temporary accommodation.
• Investing £32.5 million per year as part of the cross portfolio work to keep The Promise, and deliver sustained support to care experienced children and young people to enable them to grow up safe, supported and able to achieve their full potential

2.2 A Fair, Green, Growing Economy

Persistent economic uncertainty, both globally and for the UK as a whole, has impacted people, businesses and communities across Scotland in recent years, but Scotland continues to out-perform the rest of the UK on inward investment, growth in GDP per person, and unemployment. We will take targeted action throughout the spending review period to deliver growth locally and nationally, including:

• Investment to ensure connectivity across Scotland, including over £1.2 billion to continue the dualling of the A9.
• Investment of over £480 million in key growth sectors over the Spending Review through our Enterprise Agencies.
• Achieving our commitment to capitalise the Scottish National Investment Bank with £1 billion and remaining on track for the commitment of £2 billion over the first 10 years.
• Investment of £228 million in digital connectivity, supporting rural communities.
• Capital investment of £750 million in local and regional economies through investment in City and Regional Deals and Regeneration programmes.
• Continuing to strengthen our cultural sector, fulfilling our commitment to increase our annual culture funding by £100 million by 2028-29 in recognition of its importance to the Scottish economy and social cohesion.
• Providing £56 million to fund the Art Works project in Granton, delivering a shared storage facility for Scotland’s national collections of art and artefacts, whilst also creating a community hub which is accessible to all and supports local development in Granton.
• Investing in major sporting events. In 2027 Scotland will host Tour de France Grand Départ and in 2028 we are co-hosting the UEFA European Championships, and our investment will ensure we deliver a vibrant and inclusive events that maximises its contribution to Scotland’s economy. The benefits of co-hosting the UEFA European Championships are estimated to be worth approximately £270 million to the Scottish economy, through job creation and tourism.
• Providing almost £40 million per year to VisitScotland to continue its strategic role in driving a vibrant and dynamic visitor economy, growing its value to Scotland, and creating better places for people to live, work and visit. VisitScotland’s brand and campaign activity will continue to promote Scotland as a quality destination domestically and internationally, and further grow international connectivity in a competitive global market.
• Providing a further £250 million of resource into Scotland’s colleges and universities over the spending review period, which will mean more than £2.4 billion being invested annually to help people all across Scotland fulfil their potential. This investment will also strengthen Scotland’s economy, support our world class research base, deliver the skills needed across key sectors and help lift people out of poverty. We will also continue our Widening Access agenda and prioritise investment in apprenticeships, helping more learners to enter education and training, remain engaged, and progress into and through employment. Scotland’s colleges will see £146 million of additional resource funding allocated over the spending review period, creating a strong foundation for the sector to come together to deliver an ambitious body of reform and transformation alongside delivering vital services and opportunities for people and employers across Scotland.
• Proceeding with a £1.5 billion Bond Programme over the next parliamentary term, following the high Investment grade Credit Ratings received by Moody’s and S&P. This will deliver one of the key recommendations from the Investor Panel as part of a fiscally sustainable capital borrowing policy.
• Continuing to explore use of the long-term resource budget to support capital additionality where affordability and Value for Money conditions allow. Initial policy areas for exploration are set out in our Infrastructure Delivery Pipeline document, also published today.

2.3 Tackling the Climate Emergency

This spending review continues our work to address the twin crises of climate change and nature loss, as we push forward in our journey to net zero and the opportunities that it brings. To tackle the climate crisis, we will:

• Invest £296 million in the offshore wind supply chain, which will leverage private investment into manufacturing and infrastructure projects to create and sustain thousands of jobs and build a skilled renewables workforce.
• Invest £110 million in peatland restoration over the next four years, and £93 million in wider nature restoration. These key investments will address the ongoing threat to nature and deliver our Scottish Biodiversity Strategy and our aim of halting the loss of biodiversity and being nature positive by 2030. Restoring peatlands reduces emissions, enhances biodiversity, increases resilience to climate change by helping reduce flooding and the severity of wildfires, and improves water quality. This funding will support the restoration of around 37,800 hectares of peatlands.
• Allocate over £282 million to Scottish Forestry over the next three years, recognising the vital contribution of forestry to tackling climate change and biodiversity loss, as well as generating economic growth. This funding will support the creation of 60,000 hectares of woodlands.
• Invest £15.9 million capital funding per year in the Just Transition Fund, supporting communities in the North East and Moray in diversifying regional economies away from carbon-intense industries and towards net zero.
• Make public transport more affordable and more accessible, providing up to £35 million per year across the SSR period to continue to fund the removal of peak rail fares, encouraging more use of sustainable public transport.
• Invest nearly £1.4 billion in low carbon and sustainable travel, including active travel, bus infrastructure and support for zero emission vehicles.
• Continue to progress our Heat in Buildings Programme, working to decarbonise buildings across the country in a way that does not penalise individuals, contributing towards both tackling the climate emergency and reducing fuel poverty. Across the next four years we are investing £1.3 billion in heat in buildings to support an estimated 20,000 households annually make energy efficiency and clean heat improvements, alongside continued investment in heat networks and public sector buildings.
• Invest £80 million over the next four years to progress Scotland’s transition to a circular economy by reducing waste and promoting sustainable consumption, increasing re-use and recycling of our resources and decarbonising the disposal of waste. This includes major delivery programmes for extended producer responsibility and modernising recycling services through the co-design of a new Household Recycling Code of Practice.
• Continue the CARES programme, which supports communities across Scotland to develop local community energy, over the spending review period. A further £29.5 million will be invested in community owned wind and hydro, decarbonising community buildings, installing solar PV on faith buildings, developing community action plans, innovation studies, and helping local communities invest in commercial renewable energy projects.
• Invest over £180 million over the SSR period in Energy Transitions to promote a secure, efficient and sustainable energy supply. This will encourage innovation such as carbon capture and storage opportunities. It will also support a just transition at Grangemouth safeguarding its role as a leading industrial cluster to ensure a sustainable, long-term future for the area.
• Invest more than £1.9 billion over the SSR period in support for Scottish farmers, crofters, land managers, and rural communities. This funding will maintain direct payments while investing in the transformation of farming and food production. Key commitments include the Agriculture Reform Programme – a transformational programme to deliver the Vision for Agriculture – and the Agri-Environment Climate Scheme to help producers cut emissions and enhance biodiversity.

2.4 Ensuring High Quality and Sustainable Public Services

This SSR demonstrates our commitment to ensuring that people across Scotland can access high quality public services, which are being delivered in a fiscally sustainable way. To support this commitment, we will:

• Improve access to primary care and shift more towards care into the community, framed by the Primary and Community Health Outcomes and Route Map in 2026, by investing £531 million of additional funding as part of a three year deal to 2028-29. Our investment will ensure that we strengthen the General Practice workforce and improve access, quality, patient outcomes and sustainability – including through the creation of High Street GP Walk-in centres.
• Continue to provide funding to our National and Territorial Health Boards (£17.6 billion in 2026-27 and increasing year on year, with a forecast real terms increase of 5.9 per cent over three years) to support delivery of services, uplift pay and support Agenda for Change reforms. We will work with Boards to drive sustainable improvement and deliver efficiencies against core funding.
• Invest £4.1 billion health capital over four years including in major health infrastructure projects such as the University Hospital Monklands, Princess Alexandra Eye Pavilion, Belford Hospital, and St Brendan’s Hospital replacements, as well as undertaking essential maintenance and replacing and upgrading vital medical equipment.
• Continue funding for the Learning Estate Investment Programme to support modern, fit-for-purpose schools across Scotland. This £2 billion programme will deliver 47 new school projects by end of 2027-28 in collaboration with our partners in local government.
• Provide £1.5 billion resource budget to the Scottish Prison Service to manage the prison population and £507 million resource investment in community justice services, which will continue to support our shift to the use of more community based sentences which evidence shows can help reduce reoffending.
• Enhance and maintain our rail network and fleet with over £4.4 billion of capital investment over four years. This will support electrification of key routes in the Borders and Fife and enable Scotrail to replace the Intercity and Suburban fleets.
• Provide £4.7 billion and £1.1 billion resource budget respectively over the SSR period to Police Scotland and the Scottish Fire and Rescue Service, in continued support of frontline capacity.
• Provide £816.8 million of capital funding to enable Scottish Prison Service to progress the replacement of HMP Highland and HMP Glasgow and conduct maintenance across the wider estate, and to support them to implement recommendations from Fatal Accident Inquiries.
• Invest over £1 billion capital over four years to deliver ferry service improvements. Vessel replacements, including on the Islay and Little Minch routes, the seven SVRP Phase 1 vessels, MV Lord of The Isles replacement, and the new freight flex vessels for the Northern Isles routes, will be taken forward. A number of related port improvements on these routes will also be progressed including Port Ellen, Mallaig Harbour and Ardrossan.
• Provide £9 million to extend the funding to Police Scotland to support the Retail Crime Taskforce and its associated activity, to allow the service to increase efforts to prevent shop-based theft and pursue those responsible.