To inform this year’s pre-budget scrutiny, the committee will focus on three key areas:

• progress on the Scottish Government’s public service reform programme
• the Scottish Government’s approach to taxation, including what its draft tax strategy should include and how potential behavioural responses impact business and individuals
• how the Scottish Government is using its capital expenditure to achieve innovation, productivity, and growth.

Primary objectives

The primary objectives of this year’s pre-budget scrutiny are:

• to establish progress made in relation to the Scottish Government’s 10- year public service reform programme
• to influence development of the Scottish Government’s tax strategy by seeking views on what key elements the strategy should include
• to bring greater transparency to the potential impacts of behavioural change arising from the Scottish Government’s approach to taxation
• to scrutinise the effectiveness of the actions that the Scottish Government is taking to grow the tax base and increase labour market participation, productivity, and growth, and what further actions are needed
• to establish in what areas the Scottish Government should prioritise its limited capital spend to achieve most progress with innovation, productivity, and growth.

Pre-budget scrutiny aims to:

• influence how the Budget is prepared
• improve transparency and increase public awareness of the Budget
• consider how the Scottish Government’s Budget for 2025-26 should respond to fiscal and wider policy challenges
• lead to better results and outcomes when compared against the Scottish Government’s targets and goals.

UK election impact

As a result of the UK election being scheduled for 4 July 2024, the Scottish Government delayed publication of its strategic policies which usually inform the start of the committee’s inquiry.

Usually, the committee would have received:

• the Scottish Government’s Medium-Term Financial Strategy
• the Scottish Fiscal Commission’s economic and fiscal forecasts.

Publication of the Scottish Government’s draft tax strategy has also been delayed along with its infrastructure plans and second update on its public service reform programme to the committee.

At this stage, it is not clear when these documents will be published.

Key documents

Read: Priorities for Scotland: First Minister's statement - 22 May 2024
Read: Public sector pay policy 2024 to 2025
Read: Fiscal Sustainability Report – March 2023
Read: Fiscal Sustainability Perspectives: Climate Change

First Minister’s priorities

On 22 May 2024, the First Minister set out his four priorities to guide the Scottish Government’s decision-making on policy and the budget.

He said his four priorities are:

• Eradicating child poverty
• Growing the economy
• Tackling the climate emergency
• Delivering better public services.

As part of the inquiry, the Committee will consider whether these are the right priorities for the Scottish Budget 2025-26, and potential alternatives.

Guidance for Subject Committees

Guidance for committees on the budget process 2025-26 highlights relevant supporting documents, work approaches and examples of good practice.

Budget Process 2025-26: Guidance for Committees (226KB, pdf) posted 12 June 2024