Scottish Spending Review 2026

Chapter 5 Finance & Local Government

Our focus is on enabling public services to become more sustainable and resilient to meet the needs of communities across Scotland. The portfolio is also responsible for delivering sound public finances and a balanced budget while supporting local government partnership.

This Spending Review provides investment to reform public services including supporting implementation of the Public Service Reform (PSR) strategy and specific commitments such as community empowerment, supporting public bodies, and collaborative leadership.

The Spending Review further simplifies and consolidates funding arrangements for local government, reducing administrative burdens. The Spending Review supports long-term planning and investment whilst acknowledging that reforms will help delivery of high-quality, sustainable public services for Scotland’s communities.

Funding for local government across the SSR period will support targeted delivery across Scottish Government’s four priorities by enabling Councils to take action to reduce child poverty, strengthen local economic growth, accelerate progress towards net zero and drive continuous improvement in public services through reform, collaboration, and more efficient delivery.

Within the Scottish Government, funding will ensure the Exchequer can effectively manage Scotland’s public finances through revenue raising, improving public value, and ensuring the overall financial position is balanced and sustainable. It will also support corporate services in enabling other parts of the Scottish Government and wider public bodies to deliver for our citizens.

In 2026-27, we will provide upfront investment of £29.9 million through the next round of Invest to Save for reform projects that will deliver ongoing savings and support the delivery of the PSR strategy – a key part of the Government’s overarching approach to fiscal sustainability.

The portfolio will also issue the Scottish Government Bond, as part of a multi-year £1.5 billion issuance programme, to support infrastructure investment, grow the economy and ensure high-quality public services.

Improvements to Scotland’s planning service will reduce barriers to development, delivering clearer, quicker decisions to foster confidence and predictability for investors and developers. This will accelerate the development of quality housing and infrastructure for the people of Scotland and help drive economic growth to fund public services.

*This figure includes UK Funded AME (Non-Domestic Rates). See Table 5.02 for full breakdown of Local Government costs.