Scottish Budget 2026-27 - Key Announcements By Shona Robison

14th January 2026

Finance Secretary Shona Robison today set out the Scottish Government's draft budget for the coming financial year, at Holyrood just four months ahead of the Scottish Parliament election.

1. New Income Tax Changes

Robison unveiled a new income tax band for higher-earning Scots:

A 45p tax band for people earning between £75,000 and £125,140;

The top tax rate — for earnings above £125,140 — will rise to 48p in the pound.

These changes are projected to raise about £1.5 billion in additional revenue.

The Government said this was aimed at ensuring those with greater means contribute more to public finances, while the three lowest income tax rates remain unchanged and some thresholds rise with inflation.

2. Support for Local Authorities

Robison announced funding to fully fund a council tax freeze, with local government overall funding rising to a record high. Councils will receive money equivalent to a 5 % rise in funding and a £144 million package to support freezing council tax.

However, councils' representative body COSLA warned that the freeze funding may not fully cover real-terms funding pressures, potentially leaving local services under strain.

3. Public Services Funding

Significant investments were outlined for key public services:

Frontline NHS funding will increase by £550 million, taking total health funding to more than £13.2 billion.

Social security spending will amount to around £6.3 billion next year, over £1 billion more than in 2023-24.

Additional commitments were signalled for affordable housing, public transport, and wiping out school meal debt.

4. Business and Economic Measures

The budget includes tax reliefs aimed at supporting business, including:

Business rates freezes or reliefs for smaller and certain sectors, such as hospitality in island communities.

Robison framed these measures as necessary to balance support for the economy without broad punitive tax hikes while maintaining investment in public services.

5. Political and Fiscal Context

The budget comes amid a backdrop of tight finances:

The Scottish Fiscal Commission has warned about constrained growth in day-to-day spending and forecast continuing pressures on the budget.

Senior councils and opposition figures have expressed concern that despite increased funding, real-terms pressures remain high and local services could still face cuts.

6. Election Framing

Because the budget is being delivered in an election year, the SNP has emphasised policies supporting working families, public services and tax fairness — a strategy seen as part of its effort to remain competitive in May 2026.