UK Government’s Plan for Change delivers record settlement for Scottish Government with an extra £9.1 billion over the SR period to deliver public services
Working people across Scotland will benefit from significant investment in clean energy and innovation, creating thousands of high-skilled jobs and strengthening Scotland’s position as the home of the United Kingdom’s clean energy revolution.
The UK Government has confirmed £8.3 billion in funding for GB Energy-Nuclear and GB Energy in Aberdeen. This is alongside an increased commitment to the Acorn Carbon Capture, Usage and Storage project, which will receive development funding.
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The Spending Review, outlined today, Wednesday 11 June, announces targeted investment in Scotland’s most promising sectors to grow the economy and put more money in working people’s pockets. It delivers an extra £9.1 billion over Phase 2 of the Spending Review, through the Barnett formula.
The government also confirmed £25 million for the Inverness and Cromarty Firth Freeport.
These investments are part of a wider package, with funding for hydrogen production projects at Cromarty and Whitelee.
Secretary of State for Scotland, Ian Murray, said:
Investment in Scotland to Strengthen UK Defence
Speaking in the House of Commons today, the Chancellor reaffirmed the government’s commitment to increase defence spending to 2.6% of GDP by April 2027, backing our Armed Forces, creating British jobs in British industries, and prioritising the security of Britain when it is most needed.
The long-term future of the Clyde is secured through an initial £250 million investment over three years which will begin a multi-decade, multi-billion pound redevelopment of HM Naval Base Clyde through the ‘Clyde 2070’ programme.
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Investing in Innovation and R&D
Scotland will also become home to the UK’s largest and most powerful supercomputer, with up to £750 million committed to its development at Edinburgh University. This world-class facility will give scientists across all UK universities access to extraordinary computer power, further strengthening Scotland’s research and innovation capability.
The UK Government is backing Scottish industry with a share of increased UK-wide R&D spending set to grow from £20.4 billion in 2025-26 to over £22.6 billion per year by 2029-30.
Scotland will also benefit from a £410 million UK-wide Local Innovation Partnerships Fund.
Targeted Support for Scottish Communities
The government is also investing £160 million over 10 years for Investment Zones in the North East of Scotland and in Glasgow City Region, and confirming £452 million over four years for City and Growth Deals across Scotland.
A £100 million joint investment for the Falkirk and Grangemouth Growth deal with the Scottish Government (£50 million from UK Government and £50 million from Scottish Government), demonstrating the UK Government’s continued commitment to the Grangemouth industrial area.
A new local growth fund, and investments in up to 350 deprived communities across the UK, will maintain the same cash level as in 2025-26 under the Shared Prosperity Fund. The Ministry of Housing, Communities and Local Government and the Scotland Office, will work with local partners and the Scottish Government, to ensure money goes to projects that matter to local people. This investment will help drive growth and improve communities across Scotland.
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Supporting Scottish Businesses
The National Wealth Fund (NWF) is trialling a Strategic Partnership with Glasgow City Region to provide enhanced, hands-on support to help it develop and finance long term investment opportunities. The NWF has already made its first investment in Scotland with £43.5 million in direct equity for a sustainable packaging company, which is to build its first commercial-scale manufacturing facility near Glasgow.
Through its Nations and Regions Investment programme the British Business Bank is delivering £150 million across Scotland to break down access to finance barriers and drive economic growth.
The settlement also allocates £0.75 million each year to champion our ‘Brand Scotland’ trade missions to promote Scotland’s goods and services on the world stage and to encourage further growth and investment.
A Record Settlement for Scottish Public Services
The Government has been clear that local decision-making against local priorities is central to delivering growth.
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The Scottish Government will receive the largest real terms settlement since devolution began in 1998, with an average £50.9 billion per year between 2026-27 and 2028-29, enabling the Scottish Government to deliver for working people in Scotland. This includes £2.9 billion per year on average through the operation of the Barnett formula, with £2.4 billion resource between 2026-27 and 2028-29 and £510 million capital between 2026-27 and 2029-30.
This investment and record settlement is made possible by the tough but necessary decisions taken in the October Budget.
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