ICAS: Scottish Budget offers glimmer of hope, but falls short of long-term reform
Media statement
Commenting on this afternoon’s Scottish Budget 2025/26 announcement, the Institute of Chartered Accountants of Scotland (ICAS) said that the budget proposed some positive investment decisions, but once again lacked the vision or detail required to satisfy the need for long-term solutions.
Bruce Cartwright CA, ICAS CEO, said:
“It was clear this was always going to be a tricky budget for the Finance Secretary, Shona Robison, with faltering public services, the lack of a substantial Scottish tax base and only a handful of levers to play with. What resulted was an uninspiring budget which fell short of offering long-term certainty for businesses or a coherent strategy for public service reform.
“It’s a relief that no additional income tax bands have been introduced to what is already an overcomplicated Scottish income tax system. The decision to increase starter, basic and intermediate bands by 3.5% offers a glimmer of hope to those on lower incomes. But to put this increase into context, it isn’t as much as you would expect – for example, someone earning £25,000 a year will only be £5 better off. And if they see their council tax bill go up by more than that, this small gain will be completely wiped out.
“For those falling in the three higher tax bands, we’ll almost certainly see some individuals being dragged into higher tax rates through even small pay rises. This means that more of their hard-earned money goes to the government.
“We rightly heard some very big numbers going into public services, including a record £21bn allocation for the NHS. But we need to have honest discussions about the outcomes of these investments. There is no point spending more money on health services or schools, if there’s no willingness or incentive to change how we deliver these services. We need to identify how and where things must improve. We also need to see evidence of whether standards have gone up, waiting times have come down and more crimes have been solved.
“We called for the budget to put an end to current fiscal short-termism and hoped that it would offer certainty for businesses and public services to plan beyond the next 12 months, which sadly it falls short in doing. We think major public sector structural and spending reform is needed. A long-term tax strategy, which includes a complete review of income tax bands and how we grow our tax base is also long overdue.”
