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The Scottish Government is committed to making savings by driving key efficiency programmes such as Scottish Single Estates, Commercial Value for Money (CVfM), Collaborative Procurement frameworks, Oracle Cloud implementation, the Intelligence Automation Centre of Excellence, Digital programme, and Revenue Raising. This work reflects our approach of building these key efficiency programmes into the overall PSR approach.

There has been strong progress across these programmes, with cashable savings delivered. Our Single Scottish Estate, National Collaborative Procurement, Commercial Value for Money and Digital programmes are collectively securing cost avoidance and cash releasing savings, expected to reach up to £280 million over a two-year period by the end of 2024-25, with further projected savings of nearly £300 million over the following two financial years to the end of 2026-27.

The Single Scottish Estate (SSE) will help us have a more efficient approach to public sector property management, optimising costs, enabling the delivery of excellent public services and providing staff with great places to work, recognising the shifts in working culture since the pandemic. The SSE engages with all parts of the public sector including health and local authorities as well as central government bodies. The programme is currently focused on the public sector administrative estate and is undertaking a number of location-based reviews and projects including across Perth, Edinburgh and Glasgow. We are estimating £50-80m total savings from now to 2028, with associated carbon reductions and improvements in service delivery to the public. An overall total of £36m of direct Single Scottish Estate benefits have been secured.

Collaborative procurement can help public bodies achieve better value for money, through consolidating volumes, driving efficiencies and social value and making better use of skills and resources. The Scottish Government establishes national collaborative procurement framework agreements on behalf of the whole Scottish public sector. There are opportunities to increase Scotland’s collaborative buying power by expanding the use of National Collaborative Frameworks across the Scottish public sector, leading to a significant increase in financial benefits delivered on a cross-sectoral basis via economies of scale. Building on current financial benefits delivered annually of around £130m, made up of both cost avoidance and cash savings, work is underway to scope the potential to scale up the service offered by the national collaborative procurement team.

The Commercial Value for Money programme (CVfM) is providing commercial expertise and support across all Scottish Government expenditure to support increased value for money through the delivery of monetary efficiencies and/or increased impactful policy outcomes. This includes work in areas such as grant alignment, commercial scrutiny of costs, development and implementation of performance monitoring and reporting to show the effectiveness of SG spend, development of novel funding approaches and increased leverage of SG spend. Almost £7m of cashable and £600k of non-cashable savings have already been delivered, with little or no impact on policy delivery. The CVfM programme is projected to save up to £50m over the next 5 years whilst also supporting other efficiency work.

Meanwhile, the Intelligent Automation Centre of Excellence has already been realised significant benefits within government and several core agencies. £3.9M in cost-avoidance benefits have been achieved to date with a projected £14.5M by 28-29.

As the PSR programme develops further, building on the data and capacity around savings, and the embedding of reform and efficiency in the budget process, we will look to drive and quantify other and future savings opportunities.

Our commitment to reform is not a single programme; it is a cross system approach with a focus on strategic priorities which we set out in the Budget. This work is being progressed through multiple and interconnected work-streams and requires a whole-of-government approach.

There are 5.8 civil servants working in the team that is leading the core public service reform programme.

The core Scottish Government workforce has been following a strategy to reduce in size since March 2022, to adjust to the budgetary context and the change in the profile of its work following the Covid-19 pandemic. This direction accords with the wider work on medium term financial planning and in-year path to balance, as well as aligning with wider Public Service Reform ambitions. Enhanced recruitment controls were introduced at the start of the 2022-23 financial year to achieve this strategy.

In 2022-23 and 2023-24 the total Scottish Government workforce (i.e. directly employed and contingent workers) reduced by 0.4% and 3% respectively. This is the first time the workforce has reduced in consecutive years since SG began publishing workforce statistics in 2012. For the remainder of 2024-25, the presumption against external recruitment has been further strengthened in line with the spending controls announced in August 2024. Workforce planning for 25-26 will get underway across SG teams in early 2025. The size of the corporate functions within the Scottish Government, and the services they offer to wider public sector bodies, has been part of the consideration of the optimal size and deployment of the total Scottish Government workforce.

Ongoing assessment of the size of the corporate functions, both within the Scottish Government and across the wider public body landscape, is underway and opportunities will continue to be reviewed to ensure the those functions are as efficient and effective as possible to enable the delivery of public services.

The Scottish Government is taking action to support effective workforce planning in public bodies to, including providing guidance on redeployment.

Table 1 shows the estimated net income from properties liable for the Basic Property Rate in 2025-2026, broken down by property class. The net estimates include adjustments for reliefs, as well as in-year adjustments such as reductions due to proposals or appeals and write-offs.

The Scottish Government does not hold property-level data on industry sectors. “Property class” is a classification used by Scottish Assessors to describe the type of property, but may not necessarily accurately reflect the actual use of a property.

The distribution for relief awards is estimated based on a snapshot of councils’ billing systems as at 1 June 2024. In the case of the proposed relief for hospitality properties, the forecast value of the relief has been distributed based on property level eligibility without trying to account for take-up or for the effect of the £110,000 cash cap for this relief at a business level.

Table 1: Estimated net income from properties liable for BPR by class, to the nearest £100,000

The number of properties expected to be liable for the Basic Property Rate (BPR) in 2025-2026 before any reliefs are applied is presented in the following tables, broken down in Table 1 by property class, and in Table 2 by council area.

Property class is a classification used by Scottish Assessors to describe the type of property, and does not necessarily accurately reflect the use of a property. The Scottish Government does not hold property-level data on industry sectors.

These tables are based on the non-domestic valuation roll as at 1 October 2024.

Table 1: Number of properties expected to be liable for BPR by class, to the nearest 10

The Public Service Reform Programme was established in December 2023. Through the programme we are working to address both the efficiency and effectiveness of services, whilst also working to move the public services system to prioritise prevention.

The update to Parliament in September 2024 set out the details of Scottish Government’s key efficiency programmes and projected savings. These programmes include: Commercial Value for Money (CVfM), Collaborative Procurement, Central Government Procurement Shared Services, Single Scottish Estate, The Shared Services Programme, the Intelligent Automation Centre of Excellence and the Digital Programme.

These programmes are securing significant cost avoidance and cash releasing savings, expected to reach up to £280 million over a two-year period (by end 2024-25), with further projected savings of nearly £300 million over the following two financial years to the end of 2026-27.

In terms of further detail, examples include:

• An overall total of £36M direct Scottish Single Estates benefits have been secured in the first year of the programme. This includes cash savings of £5.5M in 23-24 and £15M in 24-25
• The Commercial Value for Money programme has delivered almost £7m of cashable and £600k of non-cashable savings.
• The Intelligent Automation Centre of Excellence has delivered 143 automations with a further 469 in the pipeline. £3.9M in cost-avoidance benefits have been achieved to date.

As the programme develops further, building on the data and capacity around savings, and the embedding of reform and efficiency in the budget process, we will look to drive and quantify other savings opportunities.

The Scottish Government cannot deliver reform alone and is working with local government, public bodies, third sector and the private sector to build a consensus and common vision for achieving sustainable public services and establishing the infrastructure that enables us to collectively make progress.

The Scottish Government has not engaged any consultancies in developing or progressing the Public Service Reform Programme.

Every ‘scheduled’ award review carried out by Social Security Scotland is a light-touch review.

This means that Social Security Scotland do not require clients by default to provide information again that they already provided, that is not relevant to the changes they have reported, or that we can gather through other means.

Instead, Social Security Scotland will consider information they already hold about the client, where still relevant, and make use of appropriate decision-making tools, where needed, to reduce the need for further questions. They only ask for new supporting information in specific scenarios and take their usual supportive approach to gathering this information.

Our approach differs when a client’s circumstances or changes are more complex, or their reported level of need is unexpected. This is not light touch and Social Security Scotland will decide on a case-by-case basis what additional steps are required and appropriate to better understand the client’s needs, and to ensure they have the information needed to make a robust determination on the client’s entitlement.

Table 1 shows annual inflation as at September between 1999 and 2024 using the Consumer Price Index (CPI), as well as the annual change in the Basic, Intermediate and Higher Property Rates between 1999-2000 and 2025-2026. The rateable value threshold up to which different rates are charged has changed over time. In Scotland, there is no legislation linking the maximum possible uprating of the rates to inflation of the preceding year. Given that Scottish Ministers have chosen to set the Basic Property Rate in order to match or be below the Small Business Multiplier in England since 2007-2008, up until 2016-2017, September Retail Price Index (RPI) acted as a cap on inflationary increases in poundage in Scotland because in England, legislation used to link the maximum possible uprating of the Small Business Multiplier to September RPI of the preceding year. The independent Barclay Review of Non-Domestic Rates published in 2017 noted calls for increases in the poundage to be linked to the CPI rather than the RPI. Since 2017-18, annual changes in the rates in Scotland have been lower than the CPI increase. Revaluations are also typically designed to be revenue-neutral in real terms so both inflation and the growth in the tax base (taking into account expected appeals losses in that cycle) is taken into account when setting the rates.

Table 1: Annual CPI change as at Sept (1999-2024) and annual change to the Basic, Intermediate and Higher Property Rates (1999-2000 to 2025-26)

The Scottish Government keeps a range of measures under consideration as it develops and finalises its Budget. Final decisions are communicated with the Scottish Fiscal Commission (SFC) as soon as is practicable. The Scottish Fiscal Commission is undertaking work to cost the proposal to mitigate the impact of the two-child cap in Scotland for 2026-27. The SFC plan to publish their supplementary costings on 7 January 2025.