The Scottish Government has set out a package of tax, rates and investment measures aimed at supporting businesses and household finances as part of its draft Scottish Budget for 2026-27.
Finance Secretary Shona Robison has outlined almost £68billion of total investment next year, alongside a multi-year Scottish Spending Review, Infrastructure Strategy and Infrastructure Delivery Pipeline, setting out planned public spending and capital investment across the economy.
For businesses, the Budget includes tax and rates decisions intended to support low and middle income earners while maintaining stability for employers. Ministers confirmed that Basic and Intermediate rate income tax thresholds will increase, while current income tax rates and bands will be maintained.
A non-domestic rates relief package, estimated to be worth £864 million, will also be delivered. This includes targeted measures for pubs, restaurants and retailers.
Alongside business taxation, the Budget includes a cost of living package aimed at supporting families and participation in work. This includes funding to trial a programme of after-school activities in a range of primary schools between 3pm and 6pm, a “Summer of Sport” offering free children’s sporting activities – including swimming lessons for every primary school child – and a commitment to deliver a breakfast club in every primary school by August 2027.
The Scottish Government will also continue investment in existing cost of living measures, including free prescriptions and eye examinations, the removal of peak rail fares on ScotRail, free tuition fees for young people, free school meals for thousands of children – including all pupils in P1 to P5 – and free bus travel for under-22s and over-60s.
Significant investment is also earmarked for skills, education and workforce transition. Universities and colleges will receive additional funding, with colleges seeing a combined £70million increase in resource and capital funding, equivalent to a 10% uplift.
The Budget also includes a modest fund to help retrain workers in the oil and gas sector, alongside an ongoing commitment to Scotland’s apprenticeship programme, which will provide more than 31,000 people with a pathway into sustainable, well-paid jobs this year.
Responding to the Budget, Russell Borthwick, Chief Executive at Aberdeen & Grampian Chamber of Commerce, welcomed elements of the package but warned that significant gaps remain for the North-east.
He said: “We strongly welcome efforts to support higher and further education with additional funding, and investment in breakfast clubs which will help more people into work to support our labour market. Funding to help with business rates is also a step in the right direction - although the need for intervention highlights that we are dealing with a system that is no longer fit for purpose, and our next government must prioritise meaningful reform.”
However, he raised concerns about the lack of major infrastructure commitments for the region and the scale of transition funding.
Mr Borthwick said: “For businesses in the North-east, the absence of any clear commitment to major transport infrastructure is deeply disappointing. As is the piecemeal £15.9 million funding allocation for the Just Transition Fund, which simply does not match the scale of the challenge facing this region.
“We are now halfway through this promised ten-year £500million fund, with just £100million allocated and this is simply not good enough. It is our view that investment in creating jobs should be prioritised ahead of token funding for training people for roles which do not yet exist.”
Nationally, the Budget includes £4.3billion of transport funding, covering rail investment, ferry fleet renewal and nearly £200 million for dualling the A9. More than £5billion will also be invested to tackle the climate emergency, reduce carbon emissions and support regenerative and sustainable skills in food and farming.
Mr Borthwick also highlighted concerns around aviation taxation, adding: “Finally, it is crucial that the new Air Departure Tax must not become a penalty on regional connectivity. For areas like the North-east, air links are essential for business, investment and exports, and any new tax must support growth rather than undermine Scotland’s global competitiveness.”
Scottish Finance Secretary Shona Robison said the Budget would support families, public services and long-term economic ambition.
She said: “This Budget delivers for families across the country, for a stronger NHS, and for a more prosperous future.
“It will fund landmark policies to continue efforts to eradicate child poverty – investing in a brighter future for Scotland and the children growing up here.
“Almost £68billion is being invested in 2026-27 and almost £200billion through the Scottish Spending Review and Infrastructure Investment Pipeline, demonstrating the scale of our ambition for our nation.”
The draft Budget will now be scrutinised by the Scottish Parliament ahead of final approval.