Briefing for MSPs ahead of Finance and Public Administration Committee debate: Scottish Budget 2026-27

Summary

• Despite some welcome investments, the 2026-27 Budget in its current form wastes important opportunities to build on recent progress to reduce child poverty in Scotland.
• It is particularly disappointing that the £126 million freed up by the abolition of the two-child limit has been taken out of social security budget lines that had been earmarked to increase Scottish social security support for families. This is despite all the evidence that:
  • increasing the value of social security support for families is the single most cost-effective and impactful way to make further progress toward achieving the First Minister’s commitment to eradicating child poverty;
  • there is no credible route to meeting the 2030 child poverty targets that does not involve further substantive increases to the value of the Scottish child payment.
• The commitment to increase the Scottish child payment to £40 for children under one from 2027–28 is welcome. Support for families with babies is important as they are a group at particularly high risk of poverty. However, this support will only benefit four per cent of all children in receipt of Scottish child payment.[1] The uplift should be expanded to all children in receipt of the payment.
• The £126 million freed up as result of two child limit abolition could pay for an uplift in the Scottish child payment to £35 per week for all eligible children from this April.[2]
• As is stands there is no real terms increase in social security support for families in the 2026-27 Budget, and only £3m, for the Scottish child payment increase for under 1’s, in 2027-28.[3]
• Investment in breakfast clubs, after school and holiday activities, the Tackling Child Poverty Fund, and whole family support is very welcome, but further detail is needed as to the extent to which these are additional resources, and on how they will be deployed.
• Whilst real progress has been made, this Budget does not put Scotland on track to meet its statutory 2030 child poverty targets set out in the Child Poverty (Scotland) Act passed with all-party support in 2017. Looking forward, it is vital that all Scotland’s political parties set out how they will ensure families have access to the social security, housing, childcare and employment support they need so that no child grows up in poverty. 
   

[1] See: Table 11, Scottish Child Payment statistics to 31 December 2024, 2025. 

[2] Fraser of Allander, Implications for Scotland of abolishing the two-child limit, 2025. 

[3] Scottish Fiscal Commission, Scotland’s Economic and Fiscal Forecasts, 2026.