We also discuss what the Scottish Government will need to cover in its Climate Change Plan published later this year. Read the full report here: bit.ly/46hZaFV 4/4

In devolved areas more public spending per person is needed in Scotland than in the rest of the UK in every 5-year period, presenting a fiscal risk to the Scottish Government. bit.ly/46hZaFV 3/4

Public spending needed to reach net zero is expected to be highest on buildings in every 5-year period under the Climate Change Committee’s balanced pathway scenario. bit.ly/46hZaFV 2/4

In our Forecast Evaluation Report we show social security spending in 2024-25 was £6.1bn, 2% below our forecast of £6.3bn. The main drivers of the error were in-year policy changes. The forecast errors in disability payments broadly cancel each other out. 9/9

Our recommendation is that the Budget presented in December should include comparable information for the baseline year and the upcoming budget. 8/9

Once increased 2024-25 spending was accounted for, the presentation of percentage changes in the 2025-26 Scottish Budget moved significantly. Health, Local Government and Education Portfolios all had lower growth between 2024-25 and 2025-26 than was presented in December 2024 7/9

Our report concludes with ways the presentation of the upcoming Scottish Budget might be improved. These are technical points but are important for Parliamentary scrutiny. 6/9

Income tax outturn for 2023-24 was published in July, showing faster Scottish revenue growth than in the rest of the UK, and than originally forecast. This contributes to a positive £406m reconciliation to be applied in the 2026-27 Scottish Budget. 5/9

Reducing public sector employment will require a departure from previous trends, where the devolved public sector workforce has grown each year since 2018-19. 4/9

The Scottish Government’s Spending Review in December needs to explain how this gap will be closed. In June the Government outlined its plans to close these gaps, including reducing the size of the devolved public sector workforce by an average of 0.5 per cent per year. 3/9

In June, the Scottish Government projected spending will exceed funding by over £2 billion by 2029-30 for both day-to-day spending and capital spending. This equates to 4 per cent of day-to-day spending in 2029-30, and around 23 per cent for capital. 2/9

Our report includes an updated forecast for the Two-Child Limit Payment and an illustrative estimate for the new Pension Age Winter Heating Payment policy in Scotland, which we estimate 860,000 pensioners will be eligible for with total spending of £151 million in 2025-26. 4/4