Breaking Down Scotlands 2025 Budget Act: What You Need to Know

The Budget (Scotland) Act 2025, officially passed on February 25, 2025, received Royal Assent on March 28, 2025. It outlines the financial plans for the Scottish Administration and various direct-funded bodies for the financial year 2025/26, along with emergency arrangements for 2026/27. Here's a simplified look at what this means for Scotland:

Key Highlights:

Part 1: Financial Year 2025/26

1. Scottish Administration Spending:

   • The Act authorizes the Scottish Administration to use resources for specified purposes. It covers a wide range of sectors, such as Health and Social Care, Finance and Local Government, Social Justice, Education, and more.
   • Total resource allocation is set to ensure operational and administrative costs are met across various sectors, including capital investments and social programs.

2. Direct-Funded Bodies:

   • Specific funds are allocated to bodies directly funded by the Scottish Government, such as the Scottish Parliamentary Corporate Body and Audit Scotland, to cover their operational and administrative costs.

3. Borrowing by Statutory Bodies:

   • The Act specifies borrowing limits for certain statutory bodies, including Scottish Water and Scottish Enterprise, ensuring they can manage their financial needs efficiently.

4. Scottish Consolidated Fund:

   • Overall cash authorizations are defined, detailing the amounts allocated to the Scottish Administration and direct-funded bodies.

5. Contingency Payments:

   • A provision allows for up to £50 million in contingency funds to be authorized by the Scottish Ministers for urgent expenditures that fall outside the usual budgetary provisions.

Part 2: Emergency Arrangements for 2026/27

• If a budget isn't approved by the start of the financial year 2026/27, temporary cash authorizations are established to ensure continuity of government services.

Part 3: Miscellaneous Provisions

1. Budget Revision Regulations:

   • The Act allows the Scottish Ministers to amend budget figures if necessary, subject to parliamentary approval.

2. Repeal of Spent Provisions:

   • Outdated provisions from the previous budget are repealed to streamline current financial operations.

Sectoral Allocations:

• Health and Social Care: Significant funding to support hospital services, mental health, community care, and health integration frameworks.
• Education and Skills: Focus on operational costs, teacher development, and educational reforms, including initiatives like the Scottish Attainment Challenge.
• Transport: Investments in infrastructure, public transport, and sustainable travel solutions.
• Justice and Home Affairs: Funding directed towards legal aid, prison services, and community safety initiatives.
• Environment and Energy: Allocations for climate change initiatives, energy efficiency projects, and environmental protection.

Conclusion:

The Budget (Scotland) Act 2025 sets a comprehensive financial framework for the Scottish Government, addressing immediate operational needs while preparing for potential emergencies in the following fiscal year. It underscores the government’s commitment to funding essential services and investing in long-term sustainability and growth.