Scotland’s public spending rose markedly in 2025–26, driven by large increases in social protection and health budgets, while higher revenues — mainly from national insurance contributions — helped reduce the notional deficit slightly.
Spending and revenue: the headline numbers
New Government Expenditure and Revenue Scotland (GERS) figures show total spending in Scotland reached £123.6bn in 2025–26, an increase of £5.7bn (4.8%) compared with the previous year. On a per‑person basis, that equates to £22,281 spent in Scotland, versus £19,561 across the UK — a gap of £2,720 per head.
Revenue in Scotland rose to £98.3bn, up £6.3bn (6.9%). The growth in receipts helped reduce the notional Scottish deficit by around £600m, to £25.3bn, which the report expresses as 10.9% of GDP (down from 11.5%). For comparison, the UK’s deficit was put at 4.2% of GDP.
Where the money went
The largest annual spending increases were in what GERS classifies as “social protection” — including interventions to tackle poverty — which rose by £2.1bn, and in the health budget, which increased by £1.5bn. The combined effect of these and other pressures accounted for the bulk of the year‑on‑year rise.
- Social protection: +£2.1bn
- Health: +£1.5bn
- Total spending: £123.6bn (+£5.7bn)
The report also highlights the role of North Sea revenues, which totalled £3.2bn (3.2% of Scottish revenue). Excluding those receipts, non‑North Sea revenue was £95.1bn, an annual increase of 7.6%.
| Measure | Scotland | UK average |
|---|---|---|
| Spending per head | £22,281 | £19,561 |
| Revenue per head (incl. North Sea) | £17,718 | £17,720 |
| Total spending | £123.6bn | — |
| Total revenue | £98.3bn | — |
Drivers of revenue change
The largest increases in revenue were linked to changes in income from employment and taxation. GERS attributes the main rises to the UK government’s increase in national insurance contributions (an additional £2.4bn) and to higher income tax receipts (an additional £1.5bn) against a backdrop of inflation and nominal earnings growth. Devolved revenues — including council tax, non‑domestic rates and Scottish Income Tax — rose to £27.8bn, up 8.2% on the year.
At the same time, North Sea tax receipts fell by about £0.4bn, reflecting lower oil and gas prices during the period.
Context and implications for health and welfare
The figures show a notable policy and spending emphasis on social protection and health in Scotland in 2025–26. A rise of £1.5bn in health spending is numerically significant, but the report does not disaggregate that increase into specific services or programmes, making it difficult to assess how much of the extra resource was directed to NHS frontline care, social care commissioning, mental health services or capital investment.
Higher per‑person spending compared with the UK average does not automatically equate to better outcomes; public health and service performance depend on how resources are allocated and used. The GERS data provide a fiscal snapshot — helpful for assessing budgets and comparative effort — but they do not measure service quality or patient outcomes directly.
“Year after year
The limited comment captured in the source reflects the politically contested nature of GERS, which is often used in debates about fiscal sustainability and constitutional arrangements. The figures are inevitably interpreted through different lenses: some will view the revenue increases as signs of fiscal resilience, while others will highlight the scale of the notional deficit and the continuing dependence on volatile oil and gas receipts.
For health policy and planning, the challenge remains how to convert higher nominal spending into sustained improvements in access, waiting times and population health. The figures will be scrutinised by ministers and opposition parties as evidence on the affordability of current policies and any future commitments in health and social protection.
Readers should note that GERS reports are annual snapshots that combine devolved and reserved receipts and spending; they are useful for understanding relative effort and trends but have recognised limitations when used to draw causal conclusions about service performance.
