The Scottish Government will set out a new Medium Term Financial Strategy next week, following what Finance Secretary Shona Robison has described as a “disappointing” UK Spending Review and welfare reforms that will reduce Scotland’s budget.
The five-year strategy, to be presented to the Scottish Parliament on Wednesday 25 June, will outline how public finances will be managed to ensure long-term sustainability and alignment with the Scottish Government’s key priorities.
Alongside the MTFS, a Fiscal Sustainability Delivery Plan will be published, detailing the actions being taken to support the strategy. The plan aims to ensure that Scotland’s public spending remains on a stable footing despite constrained funding growth.
Under the UK Government’s latest Spending Review, Scotland’s day-to-day spending is projected to grow by just 0.8% over the next three years, compared to an average of 1.2% for UK Government departments. Had Scottish funding kept pace with UK-wide growth, the Scottish Government would have had an additional £1.1 billion to allocate to public services.
Finance Secretary Shona Robison said:
“This government has delivered a balanced budget every year while taking steps to improve the overall sustainability of our finances. This is despite a deeply challenging financial situation caused by rising global instability, persistent higher inflation and over a decade of UK austerity.
“Our disappointing settlement at the recent UK Spending Review has made the situation worse, short-changing the Scottish Government by £1.1 billion in our day-to-day funding compared with UK Government departments. This comes on top of reductions in our funding worth hundreds of millions of pounds as a result of the UK Government’s proposed welfare reforms and failure to fully fund its employer National Insurance increase.
“In this context, it is important that we take action to maximise funding targeted at frontline services such as our NHS.”
The MTFS will be followed later this year by the Scottish Spending Review and a new infrastructure investment pipeline, both of which will be published alongside the 2026-27 Scottish Budget.
The announcement is expected to spark debate over the adequacy of devolved funding and the Scottish Government’s ability to deliver on its policy ambitions.
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