RICS Response to Draft Scottish Budget 2025 - 2026

The Scottish Government has published its draft budget for 2025-26.

The Government once again faces a challenging backdrop, following the decision to cut £500m from this year's spending plans to balance its budget for 2024-25. Nevertheless, The UK government has outlined that it will provide a block grant of £47.7bn, external to Scotland in 2025/26 - an increase of £3.4bn on 2024/25. Though this will certainly be impacted by the UK Government’s changes to employers’ National Insurance contributions.

Key announcements within the budget, focused on the decision to lift the two-child benefit cap in Scotland in 2026, as well as the decision to fund the Winter Fuel Allowance for all pensioners in Scotland from 2025, a significant break with UK Government policy and a clear challenge to Scottish Labour.

Key announcements in the built environment space, include:

Building safety

• Introduce new legislation for a Scottish Building Safety Levy to support future programme delivery, expected to raise £30 million per annum for cladding remediation
• Cladding Remediation funding increased to £52.2m

Housing

• Housing & Building Standards budget increased to £766 million, including increases to the More Homes budget (£590m) and Housing Support (£171.4m)

Planning

• Establish a Housing Planning Hub to help unblock major developments which have stalled within the system
• Launch a graduate programme and treble the number of bursaries offered to planning students

Non-domestic rates

• The Intermediate and Higher Property Rates will increase by inflation to 55.4p and 56.8p respectively
• A new 40% relief for Hospitality premises (including Music Venues with capacity up to 1,500) will be introduced for 2025-26, where the property is liable for the Basic Property Rate (rateable value up to £51,000), capped at £110,000 per business
• The 100% relief for Hospitality premises on islands and specified remote areas will continue in 2025-26, capped at £110,000 per business, and will also be available for music venues with a capacity up to 1,500 per business from 1 April 2025

Sustainability

• Invest over £300 million for the Heat in Buildings Programme, maintaining 2024‑25 levels of investment
• £25 million to support the energy transition, creating jobs across the supply chain
• Establish a Scottish Government hub for offshore wind in the North East

Responding to the budget, Robert Toomey, RICS Senior Public Affairs Officer, Scotland commented:

“The Scottish Government’s draft budget announcement yesterday, highlights that while there are still financial challenges, positive steps have been taken to address funding shortfalls in key areas.

After Scottish Government declared a housing emergency earlier this year, it’s positive to see these words being met with action – something we have called for – with substantial increases made to the housing and building standards budget after the disastrous cuts made last year, as well as investments in the planning space and further building safety commitments.

While further investments in infrastructure and skills are needed, we look forward to continuing our work with Scottish Government in 2025 to ensure growth across all parts of the built environment.”

For more information or to get involved in RICS’ policy work in Scotland, contact Senior Public Affairs Officer, Robert Toomey at rtoomey@rics.org