Health spending plans for next year ‘represent real-terms freeze’

Day-to-day spending on health and social care received a £1.5bn top-up in the current financial year, but plans for the next year represent a real-terms freeze, a think tank has said.

The Institute for Fiscal Studies (IFS) analysed the Scottish Government’s spending plans for the 2025/26 year as well as what has taken place so far in the current year.

It concluded that next year’s health budget would be likely to require in-year top-ups as well.

The £1.5bn boost this year largely came from the increased spending as a result of Chancellor Rachel Reeves’ first Budget.

However the IFS said more large increases in UK spending would be unlikely in the next year.

The Scottish Government’s latest plans imply that overall day-to-day spending on public services will increase by 1.2% in real terms between this year and next, an IFS report said.

Research economist Bee Boileau said: “The Scottish Government has made big top-ups to health spending plans this year which, if spent well, should improve the performance of the health service in the coming year too.

“But with essentially no further increase in day-to-day health spending currently planned for 2025–26, it is likely additional funds will need to be found for top-ups to the health budget over the next 12 months too.

“The fiscal situation means it is unlikely that much if any extra funding will be forthcoming from the UK Government.

“Instead, the Scottish Government will have to rely on carrying forward funding from this year into next, and on cutting back budgets for other service areas – most of which are currently set to see much bigger year-on-year increases in spending than the Scottish health service.”

David Phillips, an associate director at the IFS, said: “The Scottish Government has repeatedly highlighted a ‘£2 billion increase’ for the Scottish health service in 2025–26.

“But that is based on comparing plans for next year with the original budget for this year, and therefore is not an accurate reflection of how spending really is changing.”

He called on the Scottish Government to adopt more meaningful definitions of its spending plans, something called for by MSPs.

A Scottish Government spokesperson said: “The 2025-26 Scottish Budget provides funding worth £21.7 billion for health and social care – an all-time high.

“This Budget will have a continued focus on reform and improvement in our services.

“This will reduce waiting lists and tackle delayed discharge – all of which will improve the flow of patients through hospital and ease pressures on A&E.”