There will be a debate on the Impact of the Spending Review 2025 on Scotland in Westminster Hall on Wednesday 2nd July 2025. The debate will be led by Graeme Downie MP.
Spending Review 2025
On 11 June 2025, the Chancellor announced the outcome of the 2025 Spending Review. This set planned spending totals for all government departments for the next three to four years.
The Library briefing Spending Review 2025: A summary provides a summary of the departmental spending limits and other announcements in the 2025 Spending Review.
Funding for the Scottish Government
Most funding for the devolved administrations in Scotland, Wales and Northern Ireland is determined by the Barnett formula. As the Library briefing The Barnett formula and fiscal devolution explains, the formula adjusts the block grants that are provided so that each administration receives broadly the same pounds-per-person change as comparable spending changes in England.
The Scottish Government will therefore receive increases in its spending as a result of the spending review increases in England. The UK government says the Scottish Government will receive “£2.9 billion per year on average through the operation of the Barnett formula, with £2.4 billion resource [day-to-day funding] between 2026-27 and 2028-29 and £510 million capital [investment funding] between 2026-27 and 2029-30.”
Other spending for Scotland
The Scotland Office’s press release Spending Review: Billions to back Scottish jobs outlines other investment for Scotland announced in the spending review, including:
- £25 million for the Inverness and Cromarty Firth Freeport
- redevelopment of HM Naval Base Clyde through the ‘Clyde 2070’ programme.
- up to £750 million committed to the development of the UK’s largest and most powerful supercomputer at Edinburgh University
- £160 million over 10 years for Investment Zones in the North East of Scotland and in Glasgow City Region, and confirming £452 million over four years for City and Growth Deals across Scotland.
Further information
- The Scottish Parliament Information Centre’s briefing UK Government Spending Review provides greater clarity on the fiscal outlook for Scotland provides an overview of the key announcements and sets out the implications for Scotland.
- The Fraser of Allander Institute’s article 2025 Spending Review: the spending rollercoaster is well and truly back also explains the implications for Scotland.
- The Scottish Government gave its reaction in a media release with the headline Spending Review presents challenges. On 25 June 2025, it set out its medium-term financial strategy reflecting the impact of the UK government’s 2025 spending review on Scotland’s funding position.