Scotland’s tax rise puts £1.5bn behind public services

Scotland raised a record £98.3 billion in public revenues in 2025-26, an increase of £6.3 billion on the previous year, according to the latest Government Expenditure and Revenues Scotland (GERS) statistics. Income-tax receipts accounted for £1.5 billion of that increase.

For people using devolved services, the immediate significance is the stronger income-tax take. The Scottish Government says its tax decisions helped deliver additional funding for measures including the Scottish Child Payment, free prescriptions, bus travel for under-22s and free university education.

Why the income-tax increase matters

The £1.5 billion rise in Scottish income tax was the strongest revenue movement highlighted in the figures. The source says it was partly the result of taxation decisions made by the Scottish Government.

However, the statistics do not provide a breakdown of how much of the increase came from those decisions, compared with changes in earnings, economic activity or other factors. That limits what can be concluded from the headline figure alone: higher receipts may strengthen the funding available to devolved public services, but they do not show that every additional pound is assigned to a particular programme or that the same rate of growth will continue.

Spending increased most in health and social protection

The largest increases in spending attributed to Scotland were in social protection and health. These are broad spending areas, covering support and services used by households, rather than a list of new commitments announced alongside the GERS publication.

Deputy First Minister and Finance Secretary Jenny Gilruth said total and devolved revenues had grown faster than spending. She argued that the rise in income-tax revenue was helping to support cost-of-living measures, including the Scottish Child Payment, free prescriptions, free university education and bus travel for under-22s.

Her comments set out the Scottish Government’s interpretation of the figures. GERS itself is an accounting publication that records revenues and spending attributed to Scotland within the UK framework; it does not allocate each revenue change directly to individual services.

What the deficit estimate does and does not show

GERS estimates a notional deficit, meaning the gap between public spending attributed to Scotland and revenues raised there as part of the UK. That measure improved by 0.6 percentage points over the year, to -10.9% of GDP, but remained negative.

Gilruth said the publication does not show the fiscal position of an independent Scotland because it models Scotland within the UK. The figures therefore provide a snapshot of the current public-finance accounting position, rather than a forecast for a different constitutional arrangement.

The full GERS 2025-26 statistical publication is available from the Scottish Government.

Source: Scottish Government News