Targeting funding at frontline services

26 Jun 2025 11:28 AM

Financial strategy and action plan published.

Savings rising to £2.6 billion in 2029-30 will ensure funding can be targeted at frontline services such as the NHS, social security, action to eradicate child poverty and other priorities.

Under the five-year Medium Term Financial Strategy and Fiscal Sustainability Delivery Plan the Scottish Government will:

• increase value for public money, with affordable and sustainable investment plans set out through a Scottish Spending Review in December
• improve efficiencies and productivity across the public sector by using more technology and automation while improving collaboration between public bodies
• reform public services, doing more with available resources and prioritising people with the greatest need
• reduce the public sector workforce by an average of 0.5% every year until 2030 while protecting frontline services
• invest in preventative measures to reduce demand on services such as health, social care and justice

The strategy and action plan also include measures to support sustainable, inclusive economic growth and ensure a strategic approach to tax policy that considers longer term impacts and competitiveness.

Finance Secretary Shona Robison yesterday said:

“With the world facing profound economic uncertainty this Medium Term Financial Strategy is being published in deeply challenging circumstances. Those challenges have been exacerbated by the actions of the UK Government, whose decisions continue to have serious consequences for the delivery of our public services.

“Managing the impact of Westminster austerity is all too familiar. In spite of this we continue to invest in the people of Scotland, supporting a better paid public sector, delivering high-quality public services and providing welfare support that is not available in other parts of the UK. And we have done this while delivering a balanced budget every single year.

“Fiscal sustainability is about more than balancing the books – it’s about delivering value, driving reform and making strategic choices that support long-term growth. By focusing on efficient public spending, modernising services, growing our economy and taking a strategic approach to tax, we can build a stronger, fairer Scotland.”

Background

Medium Term Financial Strategy 2025

Fiscal Sustainability Delivery Plan 2025

Medium-Term Financial Strategy: Ministerial statement – gov.scot

The Scottish Government’s seventh Medium Term Financial Strategy (MTFS) provides the economic, funding and spending outlooks for the financial years 2025-26 to 2029-30. It also presents the Government’s fiscal strategy to deliver sustainable public finances within the current constitutional settlement.

A Fiscal Sustainability Delivery Plan (FSDP) is published alongside the MTFS this year, bringing together the actions across government to deliver fiscal sustainability. 

The FSDP actions include:

• a Scottish Spending Review that will set a savings target of between £300 million and £700 million a year over the five years
• improving efficiency and productivity while reforming public services, with savings growing from £600 million to £1.5 billion a year over the five years
• reducing the public sector workforce by an average of 0.5 per cent every year until 2030, with savings growing from £100 million to £700 million a year

Exact savings figures will vary on an annual basis.

These figures incorporate the total £1 billion reduction in corporate functions over five years as set out in the Public Service Reform strategy.

A framework for the Scottish Spending Review forms part of the MTFS. The review will set out multi-year allocations on capital and resource funding, and will be published alongside the next Budget in December.