Chamber and committees

The Scottish Government estimates that spending on workforce pay, including pensions and employer National Insurance contributions, will be equivalent to 53.4% of the entire Scottish resource budget in 2025-26. That reflects the importance this Government places on having a highly skilled and remunerated workforce. This only includes funding provided to Local Government from the Scottish Government and does not take account of other sources of funding available to Local Government, such as council tax and other forms of income.

Medium-term projections on workforce spending over the next five years will be set out in the forthcoming Medium Term Financial Strategy.

Yes. 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.

Based on Scottish Government forecasts for 2029-30 the total Fiscal Resource Budget is forecast to be £60.2 billion. Social Security expenditure for 2029-30, as forecast by the Scottish Fiscal Commission, is £8.9 billion. Therefore, Social Security expenditure is estimated to be 14.8 per cent of the total Fiscal Resource Budget in 2029-30.

The Scottish Government published a detailed update to Finance and Public Administration Committee on 19 December 2023 setting out our reform plan.

With actions across 4 workstreams we are clear on the work that Scottish Government is doing. We are working to build a shared vision, support efficient delivery of services, empower service providers, unblock stubborn barriers and work together with partners on models of funding and accountability which underpin the reform we need to see. Our approach balances responding to short-term budget pressures and making savings, while building the platform for wider change.

I provided an update to FPAC on delivery against the programme and the portfolio plans on 23 September 2024 and 21 December 2024, and we will continue to report on progress with the Parliament at 6-monthly intervals.

I will also be leading the process of articulating a PSR strategy within government and with partners. We will engage with public sector leaders at a PSR summit by the end of February 2025. Together this will set out the Scottish Government’s vision and expectations and invite public sector leaders to come together to inform that strategic approach and to galvanise action.

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.

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.

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

Social Security Scotland routinely publishes information on Adult Disability Payment applications and caseload, broken down by disability condition. No information on the number of indefinite awards made as a result of Adult Disability Payment applications is currently published.

From 21 March 2022 to 31 October 2024, there were 282,930 part 1 Adult Disability Payment applications received from new applicants, of which 86,275 had the primary disability condition “Mental and Behavioural Disorders”.

The latest Adult Disability Payment official statistics publication can be found at: https://www.socialsecurity.gov.scot/publications/statistics. The next release of Adult Disability Payment statistics which will cover the period to the end of January 2024, is due to be published on 18 March 2024.

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.

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