19th June 2026
Finance Secretary Shona Robison described this as evidence of careful financial management, and in one important respect that is true. Unlike the UK Government, Holyrood has strict legal limits on borrowing for day-to-day spending and must keep its finances within the budget approved by Parliament.
Yet one figure in the final accounts deserves closer attention.
The Government reported an underspend of £358 million, made up of:
£312 million of day-to-day (resource) spending.
£42 million of capital spending.
£4 million of financial transactions.
At the same time, Scotland continues to face long NHS waiting lists, local councils warn of financial pressures, roads require maintenance, housing shortages persist and many public bodies say they are struggling to meet demand.
That raises a reasonable question.
If £358 million remained unspent, why could it not have been used where it was most needed?
The Answer Is More Complicated Than It First Appears
It is tempting to think that government money is like money sitting in a single bank account, ready to be spent wherever the need is greatest.
In reality, public finance works very differently.
The Scottish Budget is divided into separate spending categories, each operating under different rules.
Money allocated for building schools or hospitals cannot simply be switched to employ more nurses or teachers.
Similarly, funding set aside for loans or financial transactions cannot simply be transferred into day-to-day public services.
In other words, not every pound is interchangeable.
Sometimes an Underspend Is Good Financial Management
Governments prepare their budgets months before the financial year begins.
During that year, many things can change.
Projects may be delayed because planning permission takes longer than expected.
Construction costs may rise.
Recruitment may prove more difficult than anticipated.
Procurement contracts can slip into the following financial year.
If ministers insisted that every department spent every last pound before 31 March simply to avoid an underspend, there would be a risk of rushed decisions and poor value for taxpayers.
A modest underspend can therefore be a sign of careful financial control rather than waste.
But There Is Another Side to the Argument
Critics point out that public services across Scotland continue to face enormous pressures.
Questions naturally arise.
Could some waiting lists have been reduced?
Could more roads have been repaired?
Could more affordable homes have been built?
Could local councils have received additional support?
Could delayed maintenance on schools and public buildings have been tackled?
If the answer to any of those questions is yes, then people are entitled to ask why money remained unused.
Timing Matters
One of the least understood aspects of government finance is timing.
A department may have money available.
It may even know exactly what it wants to spend it on.
But if legal agreements have not been completed, staff have not been recruited or contractors cannot begin work before the end of March, the money may simply remain unspent.
The issue is therefore not always a lack of willingness to spend.
Sometimes it is the practical reality of delivering complex public projects.
Could the Budgeting System Be Too Rigid?
This raises a much bigger question.
Should governments have greater flexibility to move money between departments during the year when priorities change?
Some economists argue that greater flexibility would allow resources to be directed more quickly towards the areas under greatest pressure.
Others warn that constantly moving money around would make long-term planning almost impossible and reduce accountability.
Finding the right balance is not easy.
Looking Beyond the Headlines
A balanced budget is undoubtedly important.
Overspending year after year would eventually create serious financial problems.
However, balancing the budget tells us only one thing.
It tells us that spending remained within legal limits.
It does not tell us whether public money was used in the most effective way.
That is a different question altogether.
Perhaps the real measure of success is not whether every pound was spent, but whether every pound that was spent delivered the greatest possible benefit for the people of Scotland.
The Questions That Matter Most
Rather than arguing about whether an underspend is automatically good or bad, perhaps we should be asking:
Why did individual departments underspend?
Which projects were delayed?
Could some of the money have been redirected earlier?
How much can be carried forward into future years?
What lessons can improve next year's budgeting process?
Those answers would tell taxpayers far more than a simple headline saying the budget was "balanced."
Final Thoughts
The Scottish Government deserves recognition for keeping spending within the legal limits set by Parliament.
That is no small task when managing a budget approaching £60 billion.
But taxpayers are equally entitled to ask another question.
If hundreds of millions of pounds remained unspent while many public services were under pressure, what prevented those resources from being used?
That is not necessarily a criticism of ministers.
Nor is it proof of poor financial management.
It is simply the question that naturally follows when public need and unspent public money appear side by side.
Understanding the answer is likely to be far more useful than arguing over whether a balanced budget is, by itself, a success.
Bill Fernie