Scottish Budget: Two-child benefit cap scrapped and record spending for NHS and councils

The two-child benefit cap will be scrapped in Scotland and a record spending for the NHS and councils in next year's budget, Scottish Finance Secretary Shona Robinson has announced.

With First Minister John Swinney having declared eradicating child poverty to be his Government's top priority, Ms Robison said action to mitigate the cap - which means families can only claim some benefits for their first two children - will lift 15,000 youngsters out of poverty.

Hitting out at Prime Minister Sir Keir Starmer's UK Government, Ms Robison said many had looked to Labour to end the "pernicious" policy - but said the Scottish Government will act where it had not.

Outlining her tax and spending plans in Holyrood on Wednesday, Ms Robison said: "Be in no doubt that the cap will be scrapped."

She said implementing the move will require "co-operation" from the UK Government, which has the relevant data on the families that lose out as a result of the policy, the Scottish Government will "work as hard as possible" so payments can start being made "as early as we can in 2026".

Mitigating the two-child cap is forecast to cost around £150 million in 2026-27 - with this rising to more than £200 million by 2029-30.

Ms Robison challenged Labour to "join us in ending the cap in Scotland", but she told MSPs: "Let me be crystal clear, this Government is to end the two-child cap and in doing so will lift over 15,000 Scottish children out of poverty."

The Scottish Government has also promised to reintroduce winter fuel payments for all pensioners north of the border from next year - part of changes that will see the bill for benefits in Scotland rise to more than £6.7 billion.

Record spending for NHS and local authorities

The Government has a record £47.7 billion to spend in 2025-26, and Ms Robison also used her draft Budget to announce record funding for the NHS and councils, as well as a major increase in funding for affordable housing.

A total of £21 billion will go on health and social care, which Ms Robison said is an increase of £2 billion next year.

She vowed the additional cash will make it easier for people to get an appointment with GP, and reduce NHS waiting times.

"By March 2026, no-one will wait longer than 12 months for a new outpatient appointment, inpatient treatment or day case treatment," the Finance Secretary said.

The funding will also pay for new specialist long Covid nurses and improved community support for teenage mental health, as well as replacement hospitals in Airdrie and Fort William, along with a new eye hospital in Edinburgh.

Scotland's councils meanwhile will get more than £15 billion in 2025-26, an increase of more than £1 billion.

Ms Robison said the cash will mean councils can "deliver the services people rely on" - telling local authorities the settlement means there is "no reason" for them to impose large hikes in council tax once this year's freeze comes to an end.

Affordable homes

The Scottish Government previously came under fire for cutting £200 million from affordable housing in the current year's budget, and Ms Robison promised to up spending in this area.

She said ministers will "ramp up action on housing" with £768 million for affordable homes, which will see more than 8,000 new homes built or acquired over the coming year.

Unveiling her plans at Holyrood, the Finance Secretary said the Budget shows the Government understands "the pressures people are facing".

She told MSPs: "This Budget invests in public services, lifts children out of poverty, acts in the face of the climate emergency, and supports jobs and economic growth.

"It is a Budget filled with hope for Scotland's future."

The Child Poverty Action Group said the Scottish Government had made the "right decision" by promising to mitigate the two-child cap, with chief executive Alison Garnham adding: "Westminster must now step-up and scrap the two-child limit UK-wide.

"There can be no justification now for Westminster dragging its feet and continuing to roll out poverty to more and more children through this policy from the austerity era."

Chris Birt, association director for Scotland at the Joseph Rowntree Foundation, said the Budget shows "positive signs of investing in the right things".

He added: "Committing to the eliminating of the two-child limit by investing in social security is a positive recognition that political choices can reduce poverty.

"Reversing the huge cuts to affordable house building is also welcome while we're in the jaws of a housing emergency."

The minority Scottish Government needs at least one other party to back the Budget for it to pass, but none has yet committed to supporting it.

Scottish Green finance spokesman Ross Greer said "significant further changes" will be needed before his party can vote the Budget through.

Scottish Liberal Democrat leader Alex Cole-Hamilton welcomed measures such as funding for GPs, dentists and mental health.

But he said: "Let me be clear, this does not guarantee our support. As with all budgets, the devil will be in the detail and we will be looking closely at that."

Scottish Conservative finance spokesman Craig Hoy said the Budget fails to fix 17 years of "economic mismanagement" under the SNP.

He claimed: "This Budget is just more of the same. Inputs, not outputs, half-hearted attempts to fix the problems that they themselves have created.

"The era of high tax, free spending is far from over and once against people in Scotland will pay more and get less."

Scottish Labour finance spokesman Michael Marra said the Budget contains "no reform, no vision, no plan", and he declared: "Scotland is going in the wrong direction because of the SNP.

"Almost one in six Scots are on an NHS waiting list, schools falling further behind, a national housing emergency, growth lagging behind the rest of the UK. Every Scottish institution is weaker.

"It is not enough just to try and correct the mistakes made last year by putting back the money that was slashed in the budget itself, or in the cuts chaos of the now annual SNP emergency budget.

"This Budget amounts to more of the same, sending Scotland ever faster in the wrong direction."

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