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The draft Budget ensures the estimated revenues raised from non-domestic rates in 2026-27 will be 6% lower in real terms measured by CPI than pre-COVID, despite the number of properties on the valuation roll increasing in that time, and introduces the lowest Basic Property Rate for 2026-27 since 2018-19.

Businesses and communities will be supported with a generous non-domestic rates relief package worth an estimated £864 million in 2026-27, including the Small Business Bonus Scheme which remains the most generous scheme of its kind in the UK and is confirmed for the next three years, as well as transitional relief schemes for eligible ratepayers.

Recognising the challenges faced by the retail, hospitality and leisure sectors, for the next three years we will offer 15% relief for eligible properties in these sectors liable for the Basic or Intermediate Property Rate, capped at £110,000 per business per year; and extend and expand 100% relief for the next three years to retail, hospitality and leisure premises located on islands as defined by the Islands (Scotland) Act 2018, and in prescribed remote areas (Cape Wrath, Knoydart and Scoraig) capped at £110,000 per business per year.

It is estimated that around half of the properties in the retail, hospitality and leisure sectors will continue to be eligible for 100% Small Business Bonus relief in 2026-27. A further 37,000 properties could benefit from the new 15% relief for eligible retail, hospitality and leisure properties with a rateable value up to and including £100,000, and eligible retail, hospitality and leisure properties on Islands.

Taken together around 96% of retail, hospitality and leisure businesses could benefit from some form of relief in 2026-27.

The budget invests over £2.4bn in post school education and skills and reinforces our steadfast commitment to free education. It includes a significant real terms increase in our investment in Scotland’s College and University sectors so that people of all ages have the opportunity to fulfil their potential, while also ensuring that priority workforce needs are met.

The Scottish Government has committed to introduce a new approach to national skills planning, and strengthen regional skills planning.

Alongside setting up these new arrangements, we recognise the importance of tackling current skills needs in priority areas. We are providing targeted support across a range of sectors, including offshore wind, social care and engineering.

For example, we are providing funding to the college sector in 2025-26 to deliver an Offshore Wind Skills Programme, helping to create region-specific training hubs for offshore wind skills. We are investing almost £12 million over three years to deliver a targeted Offshore Wind Skills Programme. This new funding will enable us to deliver the most critical priorities in our action plan, while keeping the programme scalable as future funding decisions are taken.

We are also investing up to £2 million in 2025-26 to develop engineering skills in the Glasgow City Region through a programme led by Clyde Maritime Cluster with Skills Development Scotland. This is supporting industry-led action to increase the supply of engineering and advanced manufacturing workers and reduce levels of economic inactivity.

Operational decisions such as curriculum delivery are the responsibility of individual colleges.

The draft Budget ensures the estimated revenues raised from non-domestic rates in 2026-27 will be 6% lower in real terms measured by CPI than pre-COVID, despite the number of properties on the valuation roll increasing in that time, and introduces the lowest Basic Property Rate for 2026-27 since 2018-19.

The independent Scottish Fiscal Commission is responsible for forecasting tax revenues in its Scotland's Economic and Fiscal Forecasts and for 2026-27 the forecast Non-Domestic Rates revenue is £3,387 million.

Valuations are carried out by independent Assessors and we recognise that while some ratepayers will see their rateable values fall, a number will see significant increases.

That is why the draft budget will continue to support businesses and communities with a strong non-domestic rates package for 2026-27 that decreases the Basic, Intermediate and Higher Property Rates in 2026-27, delivering the lowest Basic Property Rate since 2018-19.

Businesses and communities will be supported with a generous non-domestic rates relief package worth an estimated £864 million in 2026-27, including the Small Business Bonus Scheme which remains the most generous scheme of its kind in the UK and is confirmed for the next three years, as well as transitional relief schemes for eligible ratepayers.

The budget invests over £2.4bn in post school education and skills and reinforces our steadfast commitment to free education. It includes a significant real terms increase in our investment in Scotland’s College and University sectors so that people of all ages have the opportunity to fulfil their potential, while also ensuring that priority workforce needs are met.

The Scottish Government is working to identify a shortlist of sectors for focused skills planning. Beginning in February, my officials will engage employers, colleges, universities, and regional partners to help refine this work. We will also share further details with the Education, Children and Young People Committee, including our emerging findings. Our intention is to formally publish this work in the Spring.

The Scottish Government provides support to groups of growers recognised as Producer Organisations (POs) via the Fruit and Vegetables Aid Scheme. It is a long-standing support mechanism to encourage and enable collaboration, strategic planning, improved quality and market competitiveness. It provides match-funding, over multi-year operational programmes, for actions including investments in infrastructure, employment of specialist staff and research and innovation projects.

Examples of some of the innovation projects that have been funded through the scheme are:

• propagation trials, which if successful, would reduce imports of plants, reduce costs, control plant health and ensure the best plants for producing high quality food;
• pesticide reduction supported by UV light robots which autonomously shine a UK light on fruit plants, killing disease and causing microbes. Results indicate they can reduce powdery mildew pesticide treatments by 60-100% and increase fruit production by 15%;
• growing media trials to phase out the use of peat. Coir is an important and valuable growing media that has enabled growers to transition away from using peat, but also comes with concerns. Funding from the scheme has enabled growers to experiment with blending spent coir with woodchip, hemp, wool, heather and bracken and trial the alternatives. Finding a replacement will increase business resilience and contribute to climate change goals.

The Fruit and Vegetables Aid Scheme helps support growers of all sizes work together and plays a key role in sustaining the horticulture sector. It is reported that nearly half of UK-grown fresh produce is managed by UK-based POs.

The Scottish Government also supports fruit and vegetable growers, who are not part of a recognised PO, through a range of complementary measures. The Basic Payment Scheme (BPS) provides area-based support to all eligible farmers and crofters, including those growing fruit and vegetables, helping them maintain sustainable production and contribute to Scotland’s food supply. Organic fruit and vegetable growers can also access financial assistance through the Agri-Environment Climate Scheme (AECS), which offers funding for both conversion and maintenance of organic practices, supporting soil health, biodiversity, and climate-friendly farming.

Initiatives such as the Small Producers Pilot Fund provide capital grants and strategic support to support small producers across Scotland. This includes £500,000 in capital funding this year to boost innovation, strengthen local food production, improve energy efficiency and sustain rural jobs. It is delivered by Highlands and Islands Enterprise and South of Scotland Enterprise. The sector has welcomed this support enthusiastically, with strong demand reflected in a high number of applications, highlighting the vital role small producers play in driving innovation, sustainability and vibrant local communities.

In addition, the national Good Food Nation Plan sets out a vision for a fair, healthy and sustainable food system, guiding current and future food policy, and further support is provided through grant funding for community growing projects, which aim to increase access to land and encourage people to learn about and experience the benefits of growing their own food.

Draft rateable values for the 2026 revaluation were published on 30 November 2025 but may be subject to change.

The final valuation roll will come into effect on 1 April 2026. The Scottish Government has published a report on changes in rateable values based on draft 2026 values on 13 January and will publish a further report once final valuations are available.

The draft budget will continue to support businesses and communities with a strong non-domestic rates package for 2026-27 that decreases the Basic, Intermediate and Higher Property Rates in 2026-27, delivering the lowest Basic Property Rate since 2018-19.

Businesses and communities will be supported with a generous non-domestic rates relief package worth an estimated £864 million in 2026-27, including the Small Business Bonus Scheme which remains the most generous scheme of its kind in the UK and is confirmed for the next three years, as well as transitional relief schemes for eligible ratepayers. The Scottish Government values the contribution that the Hydro sector makes to the Scottish economy and to our low-carbon ambitions, and continues to offer the most generous rates relief in the UK for renewable generators, including hydro schemes.

The Scottish Government does not collect this data. En route HGV charging facilities and most depot charging for HGVs are privately owned and operated.

In September 2024 the Scottish Government published research on the locations required for charging or hydrogen fuelling HGVs on long journeys, based on real world telematics data, to inform investment decisions by the electricity networks, chargepoint operators and others.

A second report refining the detail for charging and covering 2% of Scottish HGVs was published in July 2025. It found that the charging infrastructure needed for all HGVs in Scotland will comprise at least 63 en-route charger locations, of which 26 are already built or under development – meaning approximately 37 additional sites are required.

The next iteration, to be published in summer 2026, will use data from around 10% of Scottish truck miles.

For Scotland’s colleges, the 2026-27 budget delivers a combined increase of £70m in resource and capital funding, equivalent to 10% uplift on last year’s budget, taking our total investment in core college funding to £764m. This enables colleges to continue to deliver high quality education and skills to learners across Scotland. Since its inception in July 2023, the Tripartite Alignment Group has been working collaboratively to identify and implement workable flexibilities to further help ease colleges’ financial pressures while ensuring accountability for public funds.

Given the situation in Gaza, the First Minister announced on 3 September 2025 a pause on new awards of public money to defence companies whose products or services are provided to countries where there is plausible evidence of genocide being committed by that country. A Business and Regulatory Impact Assessment is underway and will be published before the end of the Parliamentary session.

Given the situation in Gaza, the First Minister announced on 3 September 2025 a pause on new awards of public money to defence companies whose products or services are provided to countries where there is plausible evidence of genocide being committed by that country. A Business and Regulatory Impact Assessment is underway and will be published before the end of the Parliamentary session.