Public spending per person in Scotland in 2025-26 was £2,720 higher than the UK average, new figures reveal. This 'record Union dividend' means individuals in Scotland benefited from approximately £2,700 more in public services compared to the rest of the United Kingdom.
Overall public spending in Scotland for 2025-26 reached £123.6 billion, a 4.8% increase from the previous year. Despite this historically high spending, Scotland recorded a deficit of £25.3 billion, equivalent to 10.9% of its GDP. This contrasts with the UK's deficit of 4.2% of GDP for the same period.
Revenue Growth and Tax Hikes
Revenues in Scotland reached a record £98.3 billion in 2025-26, a 6.9% increase from the prior year. This growth was partly attributed to tax increases implemented by both the UK's Labour government and the Scottish National Party (SNP)-led Scottish government. The Labour government's hike in employers' National Insurance contributions reportedly generated £2.4 billion, while the SNP's decision to freeze higher income tax bands yielded an additional £1.5 billion.
Political Reactions to the Figures
Scottish Conservative finance secretary Craig Hoy stated that the figures demonstrate Scots are "benefitting from a record Union dividend" and that an independent Scotland would be "disastrous for the nation's finances." Reform UK's Scottish leader Malcolm Offord described the data as a "damning indictment of how the SNP spends taxpayer money," suggesting that Scots are receiving less value for their tax contributions.
Douglas Alexander, the UK Government's Scottish Secretary, emphasized the value of the union, noting that pooled resources allow for significant additional public spending in Scotland, benefiting vital services like schools, hospitals, and transport.
SNP Counterpoint
However, SNP's Deputy First Minister and Scottish Finance Secretary, Jenny Gilruth, contested the interpretation of the figures. She argued that the Government Expenditure and Revenue Scotland (Gers) data provides only "notional estimates" of Scotland's deficit within the UK and does not reflect the potential fiscal position of an independent Scotland. Gilruth pointed out that total and devolved revenues grew faster than spending in areas controlled by the Scottish government, indicating sustainable finances in those sectors. She also highlighted that decisions such as funding free tuition, the Scottish Child Payment, and public sector pay deals contributed to higher spending but were investments in public services and aimed at easing the cost of living.
Gilruth asserted that independence would allow Scotland to chart a different economic path and reach its full potential. She also noted that Scotland's geography makes delivering services more expensive and that different political choices are made by the Scottish government.
North Sea Revenue Decline
The Gers figures also indicated a decline in revenue from North Sea oil and gas. Revenue decreased from nearly £5.5 billion in 2023-24 to approximately £3.9 billion in 2025-26. This reduction is partly attributed to falling oil and gas prices and the UK government's ban on new drilling as part of its Net Zero agenda.
João Sousa, a senior research economist at the IFS, commented that while Gers provides a starting point for understanding the fiscal challenges of an independent Scotland, the long-term fiscal position would depend on future policy decisions. He noted that a deficit of the current scale would necessitate higher taxes or lower spending unless economic growth could be significantly and sustainably increased.