Scottish Budget 2024-25: Transformative Funding Changes and Future Implications
- The Scottish Government plans to allocate £47.6 billion for the 2024–25 budget.
- Since December 2023, funding for the Scottish Government has increased by £1.2 billion for day-to-day spending on public services.
- Health and Social Care received the largest boost, increasing by £1.1 billion.
Overview of Scottish Government Funding for 2024–25
Table of Contents
The Scottish Government plans to allocate £47.6 billion for the 2024–25 budget. Out of this, £6.3 billion is for social security, and £265 million is for debt service. This means £41.1 billion is available for public services.
Funding Breakdown
| Source | Original Budget (Dec 2023) | Autumn Budget Revision (Oct 2024) | UK Autumn Budget (Oct 2024) |
|---|---|---|---|
| Block grant | £37.449 billion | £38.179 billion | £39.647 billion |
| Net tax revenues | £1.592 billion | Not updated | Not updated |
| Net social security | –£1.092 billion | Not fully updated | Not updated |
| Available for public services | £41.086 billion | £42.308 billion | £43.776 billion |
Changes in Funding
Since December 2023, funding for the Scottish Government has increased by £1.2 billion for day-to-day spending on public services. The UK Spring Budget added £293 million through Barnett consequentials, and an additional £437 million came from higher public sector pension costs. Recent UK decisions, like restricting winter fuel payments, led to reduced funding of around £140 million. However, this may not impact public service funding significantly.
Spending Adjustments
Spending increases varied by portfolio. Health and Social Care received the largest boost, increasing by £1.1 billion. This included £0.2 billion for SCAPE costs, leaving £0.9 billion available for other pressures like pay increases. Finance and Local Government saw an increase of £155 million but is still set for a slight real-term decrease.
Future Funding Projections
The UK Autumn Budget set the Scottish block grant for 2025–26 at £41.1 billion for resource spending and £6.5 billion for capital, reflecting increases of 7% and 17% respectively. Projections indicate funding will reach £48.6 billion by 2028–29, demonstrating growth yet suggesting continued tough fiscal choices ahead.
Recommendations for the Scottish Government
The Scottish Government should plan realistically for the future. It may be wise to “bank” some funding increases for investment in productivity. Careful planning can ensure sustainable growth in public services. The government should also assess its income tax policies to align with fiscal realities.