Published:

Scottish Economy

PFG Reaction

The afternoon the First Minister John Swinney unveiled an earlier than usual Programme for Government covering the final year of this parliament ahead of Scottish elections in May 2026.

The rationale for the Programme for Government is that it sets out the parliamentary programme for the year ahead. The FM said that this is being presented now to ensure a “year of delivery” in the run up to the election.

Since the last PfG, there have been a number of changes to this programme with some dropped (Misogyny Bill), some being substantially re-drafted ahead of being introduced (Heat in Buildings Bill) and others that are already going through Parliament being substantially scaled back (National Care Service Bill). As such, it makes sense for the government to be updating how it intends to make the best use of the scarce parliamentary time in the year ahead.

However, this also provides a convenient time to make some noise about the good things the government is doing in Scotland. The timing, shortly after was expected to be, and indeed was, a difficult week for Labour and Conservatives in elections in England, doesn’t feel entirely accidental. But enough of the politics – what was in the substance of what was discussed?

What were the top priorities?

The key themes of the programme for Government are growing the economy, eradicating child poverty, tackling the climate emergency and ensuring high quality and sustainable public services.

On the economy, the First Minister was keen to first set out the measures that the Scottish Government had pursued to reduce the cost of living for citizens in Scotland, in particular focussing on the decision to partially reinstate the winter fuel payment given it is now a devolved benefit. He also referenced global economic developments, and announced a new “Six Point Export Plan”, which will focus on unlocking target markets. It will be good to examine in the coming months how this lines up with previous efforts such as the Trading Nation Strategy.

The FM was keen to reiterate that eradicating child poverty was at the heart of the SG’s programme, and highlighted the impact that the Scottish Child Payment was directly having on child poverty. The modelling suggests that the measure reduces child poverty by 4 percentage points in 2025-26, which represents about 40,000 children in Scotland. Having said that, as we covered extensively recently, the SG have missed their interim statutory child poverty targets. If these statutory targets are to be met, the child payment will not be sufficient on its own.

Tackling the climate emergency did not feature prominently in the FM’s speech, but there is more in the document on this than was presented in the chamber. The removal of peak fares was presented as a cost of living measure, but is also discussed as a measure likely to support modal shift. This announcement is interesting in the context of the Government ending the pilot of peak fare removal in September 2024, as (according to the government’s evaluation) it didn’t encourage enough modal shift to pay for itself, and generally helped out those from better off households, rather than those in the poorest households.

Finally, there was the section on public services, which had as the headlines the commitments on the health service that had been well-trailed, including an extra 100,000 GP appointments. While this had been covered as dealing with the “lottery of the 8am call”, it would appear to be a more general commitment to increase capacity, which the government will hope will improve the way that people experience their interactions with primary care. The Programme for Government’s claim that additional GP appointments will “address the root causes of ill health” appears to contradict much of the Scottish Government’s own public health messaging—as well as broader expert consensus—which emphasises the importance improving living conditions (also known as Primary Prevention) as the key to improving health outcomes, rather than relying on healthcare services alone. A new Population Health Framework is due to be published in the next month – we’ll have to wait and see how this all fits together.

It goes without saying that none of these issues can be solved in 12 months. And while they may be government priorities, we do not have the detail on delivery. A high-level document is not the place to be setting out the nuts and bolts of this, but the concern is that rather than sparing us the detail, the government lacks the enough of a grasp on the issue to solve it and has even less of a plan on how progress will be measured and evaluated.

For example, on GP appointments. How many GP services are unable to meet demand? Why are some having to operate restrictions on appointment booking and others are not? How will the government monitor whether additional resource allocated is making a difference? How is this compatible with some GPs currently not able to take on staff because of funding restrictions?

To be clear, allocating additional resources to a problem is not the same as delivering an improvement.

Fiscal pressures limit ambition

The PfG usually comes out a few months before the Scottish Budget meaning that pledges set out by the First Minister could then make their way into the budget process with money allocated and available for the start of the next financial year.

With the Scottish budget likely to be at least 6 months away, and the next financial year 11 months away, this PfG had to fit into the fiscal envelope already set. And this is an envelope already under pressure, with more potentially to come.

The Scottish Government has got less than it wanted from the UK Government to compensate for the increase in employer National Insurance Contributions, and this money will need to be found within existing budgets for 2025-26. We are also yet to see the conclusion of pay deals for 2025-26, an issue that has seriously derailed government budgets in previous years; and there was no provision for the likely progression of staff on pay scales, which will add further pressure.

Unfortunately, the Cabinet Secretary for Finance has said today that the Medium-Term Financial Strategy (MTFS), which should normally kick off the year-round budgeting process (see here for more MTFS chat), has been delayed until the end of June. Shona Robison has said in a letter to the Scottish Fiscal Commission, released this afternoon, that it is due to the timing of the UK Spending Review. This has been known for some time and a further delay to the MTFS is disappointing.

 What was missing?

As mentioned, the Heat in Buildings Bill is being revised and this involves taking out some of the more ambitious elements related to mandating replacement of domestic heating systems. Other, non-legislative but still PfG relevant, pledges around reducing car use have been dropped recently following an Audit Scotland report citing minimal progress towards its target.

The FM reiterated the government’s commitment to ending the two-child limit on benefits, but there was little extra detail on the delivery timetable for this given the repeated statements the FM has made on introducing this before April 2026 if possible.

Two key Bills that were shelved in the September PfG were the Human Rights Bill and the Learning Disability, Autism and Neurodiversity (LDAN) Bill. Neither have had a reprieve and we will need to wait till the manifestos to know if these remain priorities for the SNP to follow through on.  Even the watered-down commitments made in the PfG to consult on the clauses on the LDAN Bill have not, as far as we know, been progressed.

Authors

Picture of Mairi Spowage, director of the Fraser of Allander Institute

Mairi is the Director of the Fraser of Allander Institute. Previously, she was the Deputy Chief Executive of the Scottish Fiscal Commission and the Head of National Accounts at the Scottish Government and has over a decade of experience working in different areas of statistics and analysis.

Emma Congreve is Principal Knowledge Exchange Fellow and Deputy Director at the Fraser of Allander Institute. Emma's work at the Institute is focussed on policy analysis, covering a wide range of areas of social and economic policy.  Emma is an experienced economist and has previously held roles as a senior economist at the Joseph Rowntree Foundation and as an economic adviser within the Scottish Government.