The IFS Scottish Budget Report : 2026-27

The Scottish Budget and Spending Review published on 13 January set detailed spending plans for 2026-27, alongside higher-level plans for the following two years for day-to-day (resource) spending and the following three years for investment (capital) spending. Understandably, the Scottish Government chose to highlight areas where it has chosen to spend more (such as the Scottish child payment) or tax less (such as increases in the basic- and intermediate-rate tax thresholds). But a significant slowdown in funding growth means that these decisions sit alongside tougher choices elsewhere. This report, building on our initial response to the Scottish Budget, looks in more detail at the spending plans set out. We will consider the funding situation (including funding risks), tax and benefit policy, and public service performance in a series of pre-election briefings to be published over the next two months.