Scottish Spending Review 2026

Chapter 3 Delivering Public Service Reform

The Public Service Reform Strategy sets out the vision for public services in Scotland. It is a vision where everyone can access services that are efficient, high quality and effective and meet people’s day-to-day needs, while optimising every pound of public spend. We are committed to a more preventative, joined-up and efficient system. This is critical to meeting our fiscal sustainability challenge.

3.1 Prevention

Prevention must be at the heart of how we plan, budget and invest across the whole public service system. Early intervention can improve lives by preventing problems that lead to negative outcomes for people. Evidence shows that effective prevention can dramatically cut the demand for expensive acute or crisis services, which supports fiscal sustainability. For example, illustrative modelling suggests reducing overall poverty by a quarter could avoid £2.9 billion in public spending, as noted in the PSR Strategy.

We will be piloting an approach to tracking preventative spend across the Scottish Budget with a number of partners across the public sector in early 2026. Learning from this will provide the basis for a comprehensive understanding of preventative spend across the whole of the Scottish Budget by Summer 2026, with a view to integrating this approach into an ongoing annual reporting cycle from 2027–28 Budget.

3.2 Joined-Up Services

We are committed to changing our model of service delivery to integrate support and empower the front line to bring together all the resources people and families need to thrive. Whole Family Support (WFS) is our model for the integration of services. By bringing funds together into collaborative decision-making and planning spaces at the local level, WFS can deliver locally identified priorities. We will also ensure that funding flows effectively to the third and community sectors, with their value fully recognised. WFS is about making our system work with people in the way that they need, based on an ongoing relationship. To support this change we are investing a further £50 million annually in supporting WFS approaches, alongside our existing investments in the promise, tackling child poverty, and supporting children and families.

3.3 Efficient Services

As outlined in the PSR strategy, the Scottish Government and public bodies will collaborate to review how services are delivered, to reduce duplication and identify and implement opportunities to create efficiencies and simplify the landscape. We recognise that upfront investment for projects to make efficiencies and transform delivery of public services is sometimes required.

Through the PSR strategy, we committed to working across the service delivery landscape to deliver a more efficient system, setting an ambitious target to reduce annualised Scottish Government and public body corporate costs by £1 billion over the next five years.

3.4 Portfolio Efficiency and Reform Plans

We are publishing Portfolio Efficiency and Reform Plans to set out actions to secure the sustainability of Scotland’s public services. The plans (Annex B) cover workforce savings, efficiencies in corporate functions and wider service reforms, with £1.5 billion in cumulative savings set out over the Spending Review period. The plans provide a clear update on the steps being taken to strengthen fiscal sustainability while protecting frontline services, and show how we are building a sustainable, modern public sector for Scotland now and in the future.

Publishing these plans in the SSR shows our commitment to transparency and accountability. We will update and publish revised plans as further progress is made to deliver on the Fiscal Sustainability Delivery Plan (FSDP) targets, which cover a longer period to 2029-30.