Funding Scotland’s Future: Tax Reform for a New Parliament
Our fiscal priorities for the new Scottish Parliamentary term.
By David Avern
30 July 2026
By David Avern
30 July 2026
Scotland’s new parliament faces the most challenging fiscal outlook since the creation of devolution. Rising demand for health, social care, and social security, combined with squeezed UK Government spending, is placing unprecedented pressure on devolved budgets.
The Scottish Government’s own analysis forecast a fiscal gap of £2.6 billion by the end of the decade for day-to-day spending. To date, the Scottish Government’s strategy has relied heavily on finding cost efficiencies to close the budget gap. While cost control and value-for-money should be part of any strategy, the nature of many public services makes large-scale savings difficult to achieve without impacting service delivery.
If Scotland is to safeguard public services and deliver on long-term policy commitments, it is clear that more revenue must be raised from taxation. This briefing sets out a package of credible reforms which can raise £2.3 billion a year while creating a fairer and more efficient system.
The Scottish Government’s own analysis forecast a fiscal gap of £2.6 billion by the end of the decade for day-to-day spending. To date, the Scottish Government’s strategy has relied heavily on finding cost efficiencies to close the budget gap. While cost control and value-for-money should be part of any strategy, the nature of many public services makes large-scale savings difficult to achieve without impacting service delivery.
If Scotland is to safeguard public services and deliver on long-term policy commitments, it is clear that more revenue must be raised from taxation. This briefing sets out a package of credible reforms which can raise £2.3 billion a year while creating a fairer and more efficient system.