Pre-budget scrutiny 2027–28: the affordability and sustainability of Scotland’s tax and spending plans

Overview

The focus of this year’s pre-budget scrutiny inquiry is on the affordability and sustainability of Scotland’s tax and spending plans.

Your views

There are 11 questions in the Finance and Public Administration Committee’s call for views. 

Have your say by 14 August 2026.

Find out more about the inquiry

Introduction

The 2026 Scottish Spending Review (January 2026) sets out proposed day to day (resource) spending over three financial years, and investment (capital) spending over four years. The provides some detail on portfolio allocations, although this is not to the same level of detail as the annual budget.

1. Are the spending allocations outlined in the 2026 Scottish Spending Review the most effective approach to strengthen public finances?
    
2. What are the biggest risks to the spending plans outlined in the 2026 Scottish Spending Review?

The Medium-Term Financial Strategy (June 2025) is a five-year financial plan setting out the Scottish Government’s forecast for revenues and demand, spending priorities and borrowing plans.

3. Does the 2025 Medium-Term Financial Strategy (MTFS) recognise and clearly set out the scale of the fiscal challenges facing the Scottish budget, and are the actions identified in the Fiscal Sustainability Delivery Plan (FSDP) likely to address the forecast shortfall?
    
4. What do the next MTFS and update to the FSDP need to include to show that the Scottish Government is on track?
    
5. What actions should the Scottish Government take to grow the tax base and increase labour market participation, productivity, and Scotland’s economic growth?

The 2026 Scottish Spending Review sets out further details on the £1.5 billion in public sector efficiencies that are to be achieved over three years. On average, these efficiency savings range from 0.7% to 0.9% per year.

6. Are the planned efficiencies realistic and deliverable at a scale sufficient to make public services sustainable?
    
7. What are the main risks to revenues from devolved taxes?

Preventative spend – investment aimed at avoiding future demand on services - has long been a priority of the Scottish Government, but the intended outcomes have yet to be fully achieved.

This may reflect the complexity of changing entrenched budgeting practices that tend to prioritise short-term, reactive spending, as well as the challenge of coordinating action across multiple services where costs and benefits fall in different areas.

The Scottish Government recently published a Preventative Budgeting Tool and Guidance, with a view to embedding this system of tracking prevention into ongoing annual budgeting by December 2026

8. Preventative spend has been a goal for several years, but the intended outcomes have not been fully achieved.  Why do you think this is the case and how might a Preventative Budgeting Tool help track progress with achieving outcomes?
    
9. In which areas should the Scottish Government prioritise its capital spend to best support economic growth?
    
10. How effective are the Scottish Government’s existing financial flexibilities - including borrowing and the Scotland Reserve - in managing fiscal pressures, and what limitations, if any, should be addressed?

Alternative financing approaches are increasingly considered as ways to support public investment and strengthen financial resilience.

Bonds allow governments to raise upfront capital from investors, repaid over time. The Scottish Government has indicated it intends to launch its first bonds this year and, as set out in the Scottish Spending Review, expects them to fund the majority of capital borrowing in this parliamentary term. 

Mutual Investment Model (MIM) is a revenue-financed model that brings in private investment with payments spread over the life of an asset.

While these approaches can unlock additional funding beyond traditional budgets, their role remains evolving, reflecting the need to balance affordability, risk, and long-term value for money.

11. What role should alternative financing approaches – such as bonds, the mutual investment model, or other mechanisms – play in supporting public investment and strengthening Scotland’s financial resilience?

Who we would like to hear from

We welcome responses from a wide range of individuals and organisations, including: 

• Members of the public 
• Advocacy groups 
• Professional bodies 
• Industry experts 
• Academic institutions 
• Government agencies 
• Any other stakeholders with an interest in the affordability and sustainability of Scotland’s tax and spending plans. 

How to contribute 

Please answer the call for views by completing the submission form below.

You don’t have to answer all the questions. If you would prefer to send in a statement which does not cover any of the questions, please get in touch with the Committee at FPA.committee@parliament.scot 

We welcome written views in English, Gaelic, Scots or any other language.  

You can also give your views to the Committee in a BSL video. If you send a video, we will arrange for a translation and pay for this. You can send a video through a file transfer service such as WeTransfer, or upload to YouTube and share it as a private link with us by email. 

Watch our BSL users guide

Confidentiality and publication of responses 

Please let us know if you wish your response to remain confidential. You can also ask for your submission to be anonymised. 

We aim to publish all the submissions we receive. The only exceptions are where submissions are made on a “confidential” or “not for publication” basis.  

If we receive a very high volume of submissions, we may not have the resources to process and publish them all.

The call for views closes on 14 August 2026.