2026 Scottish manifesto analysis: Scottish Conservatives

Russell Findlay’s Scottish Conservatives launched their manifesto for the Holyrood election earlier this week. We’ll go through the main announcements on tax, spending and public sector reform, and we’ll look at whether the level of detail matches what we would expect from a manifesto.

Tax proposals: cuts across the board

Tax cuts are the centrepiece of the Scottish Conservatives’ manifesto, and they are substantial. The combined income tax and business rates proposals alone are estimated by the IFS to cost £3.7 billion a year by 2031–32 and propose a significant shift in Scottish tax policy.

On income tax, the Conservatives propose three changes:

1. A new 0% band would sit above the UK personal allowance (£12,570) and be uprated with inflation each year, reaching £13,892 by 2031.
2. The basic and intermediate rates would be cut to match the current starter rate at 19p.
3. The higher rate threshold would be raised from £43,663 to £50,270, bringing it into line with the rest of the UK.

Together, we estimate these changes would cost around £125 million this year, rising to nearly £2.5 billion by 2030–31.

All taxpayers in Scotland would pay less tax under these proposals. Scottish employees earning less than £86,000 would, by 2030-31, pay less income tax than someone earning the same salary elsewhere in the UK – reversing the current position for middle earners. However, the distributional effects of these savings are worth unpacking. The gains increase with income: someone earning £20,000 would save £286 in 2030-31, someone earning £45,000 would save £972, and someone earning £70,000 would save £2,644 per year.

This shift to the Scottish income tax system would lead to much closer alignment with tax systems in the rest of the UK. It would also remove the large jump in marginal tax rates for Scottish employees earning between £43,663 and £50,270 – where Scottish employees currently face a 50% marginal rate compared to 28% in the rest of the UK, because the Scottish higher rate kicks in before National Insurance contributions have fallen to 2%.

On business rates, the Conservatives propose a £20,000 property allowance beneath which no rates would be payable. Higher-value properties would only be taxed on the rateable value above £20,000. Existing cliff-edges at the £51,000 and £100,000 thresholds would be replaced with a smoother marginal structure, similar to the income tax system. The structural reform is sensible – cliff-edges in business rates create real distortions and can disincentivise property improvements. However, it is worth noting that over time the benefit to businesses may be passed on to landlords through higher rents, which is a common feature of property tax cuts rather than a flaw specific to this proposal.

Property taxes are also on the chopping block in this manifesto. The Conservatives propose to abolish Land and Buildings Transaction tax – Scottish stamp duty – for purchases of a main home. However, it’s important to note they only propose this if and when the UK Government does so, which is not something the current Labour Government has given any indication it intends to do. This is effectively a policy commitment with a significant asterisk.

More concretely, the additional dwelling supplement would be cut from 8% to 4%, reducing the tax penalty on second home and rental property purchases, which would likely benefit both landlords and tenants through reducing the cost of owning a second property and increasing the rental supply.

Finally, the manifesto proposes a ‘taxpayer dividend‘ – returning Scottish Government underspend directly to households each year. The appeal is obvious, but the fiscal mechanics raise questions. Unspent money is typically carried forward through the Scotland Reserve and reallocated the following year. This is not a one-off proposal – each year’s underspend would be paid out rather than retained, which compounds the resilience problem over the course of a full parliament. In the current tight fiscal environment, steadily eroding the Scotland Reserve in this way is a meaningful fiscal risk.

Spending and public sector reform proposals: benefit cuts and large assumed efficiencies dominate

Welfare spending cuts

The central question hanging over the entire Conservative fiscal package is whether the savings required to fund it will materialise. Welfare is the key focus here, where the manifesto identifies over £2 billion of annual savings by the end of the parliament – savings that are doing a significant amount of the heavy lifting in making the numbers add up.

The biggest single measure is a tightening of eligibility for Adult Disability Payment (ADP) for those with mental health conditions. Under the proposals, only those with a formally diagnosed mental health condition, supported by proof of unavoidable and necessary costs, would remain eligible. Given that mental and behavioural disorders account for around 40% of ADP primary conditions, this suggests a significant reduction in future caseload.

However, these savings are very dependent on how individuals respond to the changes. Those who do not currently have a formal diagnosis – and who are counted within the projected savings – may go on to seek one, and would then remain eligible for the benefit. The scale of this behavioural response is inherently uncertain. When the UK Government considered similar reforms to Personal Independence Payment (PIP) in England, the Office for Budget Responsibility estimated that behavioural responses of this kind would roughly halve the projected savings. There is a real risk, therefore, that the welfare savings the Conservatives are counting on to fund their tax cuts and spending commitments may not fully materialise in practice. It is also worth noting that people losing ADP entitlement do not disappear from public services – some will place greater demands on the NHS and social care instead, potentially offsetting a portion of the savings elsewhere in the budget.

The other headline welfare proposal is the introduction of the two-child limit on the Scottish Child Payment (SCP). The Conservatives suggest it would strengthen work incentives, and it would certainly reduce marginal tax rates for some particular individuals. But the more significant consequence is the impact on child poverty, particularly for children from larger families, and it would reintroduce some of the issues that existed with the two-child limit on universal credit.

It’s important to consider the overall distributional picture. These proposals cut taxes in ways that deliver the largest gains to higher earners, funded in significant part through reductions in support for those at the lower end of the income distribution. That is a legitimate political choice, but one that is worth acknowledging.

Turning to spending on children, the Conservatives also propose to expand free childcare to working parents of children from nine months onwards, mirroring reforms recently introduced in England. The current Scottish entitlement offers 1,140 funded hours to all three- and four-year-olds and disadvantaged two-year-olds, regardless of parental working status. Expanding provision is a costly commitment and will provide genuine help to many families. However, the majority of the benefit would flow to families who would have worked regardless and paid for childcare themselves, limiting the policy’s impact on child poverty.

Health and social care

There is a central tension in the Conservatives’ health proposals that is worth naming upfront. Increases in NHS performance – shorter waiting times, guaranteed GP access, an end to corridor care – are planned at least partly on the basis of savings within the NHS itself, via reductions in back-office costs and senior management numbers. Whether those internal savings are sufficient to bridge the gap between ambition and resource is the key question this section of the manifesto leaves unanswered. But the level of performance improvement implied would be a big challenge, let alone achieving it on the basis of efficiency savings.

The flagship retail commitment is the GP Guarantee – doubling the GP share of the NHS budget to 12% and guaranteeing an appointment within 48 hours. Other proposals include Super Saturdays for high-volume procedures, off-peak evening and weekend scanning, opening the five National Treatment Centres promised but undelivered by the SNP, and new walk-in mental health hubs.

These are meaningful commitments and we’d expect additional funding help deliver improvements. But the scale of ambition is large relative to the savings identified to fund it, and if back-office efficiencies fall short of what is planned, a Conservative government would face a difficult choice between scaling back its health commitments, finding cuts elsewhere in public services or needing to revisit its tax pledges.

On social care, the Conservatives propose a bed-blocking pilot scheme, aiming to discharge patients declared fit for release into suitable care homes within 48 hours, with a care package prepared in parallel. The logic is sound – delayed discharge is one of the most persistent and costly inefficiencies in the system – but it is explicitly a pilot, limited to areas where care home capacity already exists. How widely this could scale beyond those areas, and at what cost, is not addressed.

The workforce strategy – to be developed in partnership with staff and patients – is presented as a key plank of the health proposals. It is worth being clear that this is a process commitment rather than a policy commitment. A strategy developed over the course of the parliament is not the same as a funded plan, and the chronic staffing challenges facing both the NHS and social care in Scotland are unlikely to be resolved by a consultation process alone.

Education

The Conservatives have made a meaningful commitment to Scotland’s college sector, pledging to reverse real-terms cuts to college funding and restore budgets to their 2021–22 levels in inflation-adjusted terms. College funding has fallen significantly in recent years, and this commitment addresses a gap that has real consequences for apprenticeship places and vocational pathways. A new Skills Bill would establish a permanent framework for cooperation between colleges and employers, aiming to ensure that provision responds to genuine skills gaps rather than institutional inertia. These are practical proposals that, if delivered, would help address two well-documented problems: the decline in vocational pathways for school leavers and the persistent skills gaps facing Scottish employers. The success of such frameworks will depend, however, on sustaining meaningful employer engagement.

The manifesto also pledges to maintain free tuition for Scottish students, but “examine alternative systems so that Scottish students are no longer put at a disadvantage in the admissions process.” This appears to be a reference to the caps on university places for Scottish-domiciled students, which the Scottish Government currently uses as a way of limiting expenditure on the free tuition policy. Of course, any increase in funded places would come at a cost to the Scottish budget, but this commitment is at much too incipient a stage to be quantified.

On Additional Support Needs (ASN), the Conservatives propose to invest in 1,000 additional classroom assistants and conduct a full national review of Scotland’s current approach to mainstreaming – the presumption that pupils with ASN should be educated in mainstream schools where possible. This is a genuinely complex area of policy where there is no easy consensus, and a review is a reasonable response to the significant pressures the current system is placing on both mainstream schools and the pupils within them. It is worth noting, however, that this would move Scotland away from mainstreaming at a time when England is moving strongly towards it.

Energy

The Conservatives propose to scrap the 2045 net zero target and support the continued extraction of Scottish oil and gas reserves – a position that sits in clear tension with Scotland’s existing climate commitments and would represent a significant change in direction for Scottish energy policy. They also propose to provide households with energy bill discounts funded through Crown Estate revenues from auctioning parts of Scotland’s seabed for offshore wind projects. Directing these revenues straight to households is an appealing offer, but it foregoes their use as a source of financing public spending – limiting the Scottish Government’s flexibility to deploy them for other purposes should spending pressures arise across the parliament.

Public sector reform and efficiencies

The manifesto also has a headline-grabbing proposal to find £500 million in savings through a snappily named Scottish Agency of Value and Efficiency (SAVE), as well as £1.5 billion in corporate functions and operating costs – which we think are additional to the £500 million, although the manifesto is unclear.

There is little detail in how this is to be achieved, and indeed over what horizon these savings are to be considered. If it’s £2 billion across a number of years, it is far from enough to deal with the projected day-to-day deficit of £2.5 billion in 2029-30, let alone the much larger deficit opened up by the party’s proposed tax policies.

And if it is an addition to plans already laid out by the Scottish Government and in annual terms, then we’re heading into even less plausible territory. The Public Service Reform Strategy published last year already had annual savings of £1 billion or 20% of all administration costs by the end of the decade. These were presented without as much detail as would have been hoped for – in fact, the Scottish Government said at the time it would need to collect data to know where to focus its efforts – and we saw the line that ‘frontline services’ would be protected being deployed.

This is an amorphous concept, and it seems implausible that such a reduction in spending would come with no change in service delivery. It’s of course perfectly reasonable and legitimate to make an argument that some services should be cut back or not delivered at all – but pretending that there are such large, unrealised efficiencies that allow all services to be maintained on a much smaller budget does no one any favours.

The Scottish Government already has a 0.5% annual reduction in headcount pencilled into its plans, and the Scottish Conservatives want to increase this to 0.75%. This would mean cutting an additional 6,700 jobs by 2030-31, which in itself doesn’t seem implausible, although it may or may not be possible to fully protect ‘frontline services’ – that formulation again – as the manifesto suggests. But the main thing missing is a plan for how these would be decided on. The Scottish Government’s current plan of simply not replacing those leaving does not take into account changing delivery needs, and the Conservative manifesto makes no mention of a different mechanism.

Overall level of detail

It’s good to see precise proposals on the income tax side, which allow bodies like us and the IFS to cost them. There are other proposals on the tax side that have less detailed implementation plans, and council tax – a tax which is badly in need of reform or at the very least revaluation – is conspicuously absent from the manifesto altogether.

On the spending side, proposals for cuts to benefits and efficiency savings, while of course obviously legitimate, lack detail. On the restriction of benefit eligibility, the main question mark is regarding the effect of higher requirements for formal diagnoses on claimants obtaining them, which would likely erode a substantial share of the savings. And efficiency plans seem extremely ambitious, especially while protecting ‘frontline services.’

This matters because the Scottish Government needs to be able to fund its spending on an ongoing basis, and tax cuts paid for by efficiencies can only be delivered if they materialise. If they don’t, this would require cutting back on the level of public service provision – something that this manifesto does not address at all.

 

This work is supported by the Nuffield Foundation. The Nuffield Foundation is an independent charitable trust with a mission to advance social well-being. It funds and undertakes rigorous research, encourages innovation and supports the use of sound evidence to inform social and economic policy, and improve people’s lives. The Nuffield Foundation is the founder and co-funder of the Nuffield Council on Bioethics, the Ada Lovelace Institute and the Nuffield Family Justice Observatory. Find out more at: nuffieldfoundation.org.

The views expressed are those of the authors and not necessarily those of the Foundation.