Fiscal framework outturn report: 2026

29 Sep 2026 02:27 PM

The Fiscal Framework Outturn Report 2026 publishes outturn and reconciliation information for Scottish Income Tax, Scottish Landfill Tax, Land and Buildings Transaction Tax and devolved Social Security benefits, as well as updates on borrowing and the Scotland Reserve.

Introduction

This is the ninth Fiscal Framework Outturn Report published by the Scottish Government. It is intended to support pre-Budget scrutiny, as set out in the Written Agreement with the Scottish Parliament[1].

It contains the following information:

Terminology used in this document

The Scottish Government relies on forecasts when setting each Budget, and the UK Government also relies on forecasts when determining BGAs. When information about actual revenues and expenditure becomes available – known as ‘outturn data’ – subsequent Budgets are adjusted to account for the difference between forecast and outturn data, known as forecast error. This process is known as a ‘reconciliation’ and can involve additions or reductions to Scotland’s Block Grant.

Reconciliations are a normal part of the Fiscal Framework – they serve the purpose of correcting for forecast error and do not reflect tax or social security performance. Both the Scottish Fiscal Commission (SFC) and Office for Budget Responsibility (OBR) publish annual Forecast Evaluation Reports which review how their forecasts compared with outturn and the reasons for variance.

Outturn figures are, at times, first published on a provisional basis before a final figure is published. Final outturn is then used to calculate final reconciliations, which are applied to Scotland’s block grant. A full explanation of the reconciliation process, BGAs and the calculation of Scotland’s Block Grant can be found in the Technical Note on the Fiscal Framework.

Data used in this document

The forecasts of the BGAs are based on the Office for Budget Responsibility (OBR) forecasts of UK tax revenues and social security benefits expenditure made at the UK Spring Forecast on 3 March 2026. BGAs are based on the forecasts for taxes and social security benefits where the UK Government retains responsibility for them, which is England and Northern Ireland for tax (except for Aggregates Tax, which is England, Northern Ireland and Wales) and England and Wales for social security.

In previous years the SFC have published tax revenue and social security expenditure forecasts alongside the Scottish Government’s Medium-Term Financial Strategy publication (MTFS), which have also been used to inform the Outturn Report. As there was no MTFS in May 2026, the latest SFC forecasts were published alongside the Scottish Budget 2026-27 on 13 January 2026.

This year’s Outturn Report therefore compares tax revenue and social security forecasts for Scotland from January 2026 with BGAs based on forecasts for rUK from March 2026.

Updated forecasts from the SFC will be published alongside the Scottish Budget 2027-28. The OBR will publish its next set of forecasts alongside the UK Government’s Autumn Budget 2026 on 28 October 2026, which will allow for the calculation of updated forecasts of BGAs.

It is prescribed in the Budget Process Session 6 Agreement between the Scottish Government and the Finance and Public Administration Committee that the Fiscal Framework Outturn Report is published in September each year, as was recommended by the Budget Process Review Group. Due to third party publication schedules, some final outturn is unavailable before the publication of the FFOR. When final outturn is not published before the Outturn Report, provisional data is used.

Whether the data is final or is provisional is detailed as follows, with a list of outturn sources outlined in Table 20 in Chapter 11:

Final:

Provisional

Historically, the difference between provisional and final outturn data has varied. In recent years the differences were small when comparing provisional outturn to final outturn for tax revenue, social security expenditure and BGAs. The exception was 2022 where the change was much larger. Further detail is provided in Annex A.

Reconciliations set out in this document

The following reconciliations have been calculated and included in this report:

Due to the use of provisional data, the overall reconciliation applying to the Scottish Budget 2027-28 cannot be finalised yet, but will be confirmed in the Scottish Budget 2027-28. The difference between reconciliations detailed in previous outturn reports and the reconciliation applied to the Scottish Budget is detailed in Annex B.

When final outturn isn’t available within two months of the Scottish Budget, the Scottish Government has the option to use provisional outturn and defer the impact to the following Budget. The £361.5 million reconciliation outlined in the Fiscal Framework Outturn Report 2025 was applied to the Scottish Budget 2026-27, but this included provisional social security outturn. When final outturn data was applied, this reduced the overall reconciliation requirement to £351.1 million. The resulting negative £10.5 million impact was deferred to the Scottish Budget 2027-28.

Considerations for Scottish Budget 2027-28

The following points are relevant for 2027-28 Budget considerations:

Corrections to outturn

Since Autumn Statement 2022, several changes to outturn have been identified. SG and HMT will reach a decision on the handling of this outturn and further information will be published in due course. As previous BGAs are a component of new BGA calculations, outturn changes will be reflected in future BGA calculations regardless of the decision on whether a reconciliation will flow from these changes to outturn.

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