As reported ahead of the announcement, finance secretary Shona Robison told Holyrood that the government will “invest £768 million for the Affordable Housing Supply Programme in 2025‑26, boosting affordable housing supply across Scotland and enabling housing providers to deliver at least 8,000 homes for social rent, mid‑market rent and low‑cost home ownership. This investment will help tackle the housing emergency while contributing towards our target of 110,000 affordable homes by 2032”.

The funding largely reverses last year’s near £200m cut the affordable housing budget which was met with warnings of “devastating” consequences for social housing supply and homelessness support.

The 2025-26 Scottish Budget also includes:

• almost tripling capital investment in the offshore wind supply chain to £150m in 2025/26, advancing the Scottish Government’s £500m commitment to offshore wind
• almost £100m will be spent on expanding Scotland’s digital infrastructure, while £62m is allocated to regeneration projects to revitalise towns and communities
• an increase of £139m in capital spending power, progressing the Belford Hospital, Monklands Hospital and Edinburgh Eye Pavilion projects
• a real-terms uplift of 3% for spending on education and skills to maintain teacher levels and invest in school infrastructure
• a record £15bn for local government
• over £660m for rural communities
• £6m for the National Islands Plan to deliver infrastructure projects designed in partnership with islanders to support successful and resilient island communities

The finance secretary said: “I am proud to present a budget that delivers on the priorities of the people of Scotland.

“Parliament can show that we understand the pressures people are facing. We can choose to come together to bring hope to people, to renew our public services, and deliver a wealth of new opportunities in our economy.

“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 and I look forward to working with all parties in Parliament to secure agreement around its provisions.”

Home builders have their say

Scotland’s home builders welcomed the restoration of the housing budget but warned that a supportive policy and regulatory environment is need to maximise the funding’s benefit.

Chief executive of Homes for Scotland Jane Wood

“Given the significant challenges which have arisen as a result of the cuts to this year’s budget, including the stalling of 7,500 much-needed homes of all tenures, the reinstatement of this funding for 2025-26 is a welcome boost in the context of the national housing emergency that was declared earlier this year.

“While the damage of this year’s cuts cannot be undone overnight, the Scottish Government must now focus on the many other wide-ranging delivery blockers that exist to maximise the benefits and potential of this new funding,

“This needs to happen at the pace which a national housing emergency necessitates, with detail now required on how the newly proposed Housing Planning Hub will be implemented and clarity needed on the outcomes of key consultations (such as the Building Safety Levy and Accessible Homes Standard) which have the potential to considerably increase costs.

As the cabinet secretary for finance and local government said herself today, the Scottish Government, given the scale of the housing challenge must ‘look at all the levers available’. HFS and its members stand ready to play their full part to move Scotland from a position of housing emergency to one in which all those who live here have the range and choice of homes that meet their needs and that they can afford.”

Susan Jackson, joint managing director at Campion Homes

“The cut to funding for affordable homes last year definitely had a significant negative impact on several social housing projects. Ultimately, this has led to delays in families being able to move into the homes they need. 

“With several Councils and the Scottish Government both declaring housing emergencies, clearly this needed to be addressed. That is why it is really positive to see this budget cut reversed. Significant barriers to more homes, both private and social, still remain, but this is a good step towards recovering the shortfall of 110,000 homes in Scotland since 2007.”

Behnam Afshar, director at AMA Homes

“While the reintroduction of funding to Scotland’s affordable housing scheme is a promising step forward, the Government has not promised much else in the way of housing for Scotland. Because of this, the UK-wide budget’s decisions on housing will undoubtedly have an impact on us here. With increased borrowing following the Westminster budget, we can expect mortgage rates to rise.

“However, as the Bank of England has knocked interest rates back to 4.75%, this will hopefully do enough to ensure the housing market continues steadily, with reports suggesting a stronger year ahead in both volumes of sales and percentage increase prices. I am expecting to see greater market confidence in general in Scotland than in England. As a devolved nation, we rely less on the workings of Westminster politics to stimulate our housing market, and I am confident we will see more home movers in Scotland in 2025.

“While England has seen a change to both the Stamp Duty rates for first-time buyers and second homeowners, we are reassured here in Scotland that the LBTT rates and first-time buyer relief will stay the same until 2026. This provides some stability for those considering a purchase in 2025 and should add a confidence boost to the Scottish market.

“While in the south, people will be spending the next couple of months trying to rush a purchase, or calling off their search entirely, here in Scotland we can expect a continuous level in interest in homebuying. While house price growth is predicted to slow in 2025, I imagine that this will happen at an accelerated rate in England, compared to Scotland, due to the difference in the Stamp Duty and LBTT payment expectations in both countries.”

Jim Baxter, financial director at Allanwater Homes

“While I welcome the reversal in cuts to Scotland’s affordable housing budget, I believe the Government could have done more to support housebuilders in Scotland. The budget could have been used to address other key challenges in the housing sector, including rising costs and supply chain disruptions. Unfortunately, the Scottish Government followed Westminster’s lead, improving minimum wages and pensions but without incentivising employers to expand workforces, and with little incentive to meet the current housing shortfall.

“However, homeownership is still an important aspiration in Scotland, and there must be support made available to first time buyers too. I would like to see the Scottish Government look to reintroduce financial support for home buyers, such as reintroducing Help to Buy or Shared Equity schemes, in order to make homeownership accessible once again for a new generation of first time buyers.

“However, there is also significant pressure on SME housebuilders to deliver. Regulatory reforms are urgently needed to address the housing pipeline, including streamlined planning permissions for residential development to enable quicker project launches and reduce delays. Equally, greater flexibility in zoning would allocate more land for residential projects, particularly in high-demand areas.

“I would also like to see the Scottish Government take a closer look at our supply chains, and support the local production of construction materials to reduce dependence on imports, and then stabilising costs to make this achievable.”

Michael Pratt, director at Timber Engineering & Invertay Homes

“Housebuilders desperately need the Scottish Government to do more to help SMEs with the broken system for financing new-build developments. Traditional forms of lending for development finance have become too restrictive and onerous for most SMEs to obtain. With land acquisition, planning, developer contributions and regulatory requirements now swallowing up so much equity at the front-end of every development it is very difficult to make the numbers stack up for ‘traditional lenders’.

“Coupled with the high level of construction industry insolvencies over the last four years, lenders are becoming very risk averse meaning developers need to commit more of their own money for longer with smaller returns. It is fast approaching a point where the ‘juice isn’t worth the squeeze’ particularly given many developers have to provide personal guarantees to secure lending. While that money is tied up it can’t be deployed on other developments.

“Scotland is in the middle of a Housing Emergency. While it’s an encouraging move to see the Government recommit to funding affordable housing, we simply don’t have enough homes for the growing needs of the country – and yet new housing is at its lowest output since 2009 which can be largely attributed to the reduction on the number of SME housebuilders.

“The Scottish Government needs to do everything it can to help SME’s grow their output and we would strongly endorse a similar Government Guaranteed scheme such as what has been proposed for England and Wales last week. It is not a silver bullet but a Scottish ‘Help to Build’ initiative could lay the foundations for a much-needed resurgence in house building in Scotland.”

Liz Hamilton, senior land and planning manager, AS Homes (Scotland) Ltd

“We welcome the decision in today’s Scottish Government budget to reverse the £200m cut to housing. This proposed cut was a hammer blow for much-needed affordable housing. We are amid a housing crisis and as a business we are poised to deliver more, but we need supportive policies to do this. More funding is key. To really unlock affordable housing we also need a massive shift to speed up the planning process and free up more deliverable land so we can actually deliver these homes.”

Offshore wind supply chain

The decision to almost triple capital investment in the offshore wind supply chain to £150m in 2025/26 and establish an offshore wind hub in Aberdeen have been singled out for particular praise.

Rod Hutchison, partner and energy sector lead at Aberdein Considine

“Shona Robinson’s draft 2025/26 Scottish Budget has earmarked £150m in additional investment for the offshore wind sector and its supply chain. This move, which will help to leverage private investment of £1.5bn for offshore wind infrastructure and manufacturing capacity, marks a further step in the right direction towards transforming the North-east of Scotland into a renewables powerhouse. It is very encouraging to see investment going into supporting the growth of our renewables economy which can only help to accelerate our vital energy transition efforts.

“We also greatly welcome the announcement of plans to establish an offshore wind hub in the city. This showcases the government’s increasing confidence in the region, following on from the recent decision to base GB Energy in Aberdeen. This new hub will support agencies and industry bodies to streamline what is quite often a complex planning system for offshore renewables projects, ultimately speeding up their deployment. At a time when net zero deadlines are looming, it is heartening to see positive action being taken that will support us in meeting these ambitious targets.”

ETZ Ltd chief executive, Maggie McGinlay

“The decision to locate a new Offshore Wind Hub in Aberdeen is hugely welcome and a positive step toward the North East of Scotland positioning itself as an internationally recognised renewables energy cluster, particularly for offshore wind. We will work closely with the Scottish Government to ensure this Hub and the additional £150m earmarked for offshore wind in the coming year are channelled effectively. 

“The importance of speeding up the planning and consenting of offshore wind projects, so they are commercially available, is vital if Scotland is to emerge as global leaders in this sector. Therefore, it makes perfect sense to locate this new body in a region that has proximity to the vast majority of offshore wind projects in Scotland and is home to the highest concentration of energy supply chain companies in the UK. 

“Following the UK Government decision to locate GB Energy in the city and the fact a range of the key energy industry and innovation support organisations are already based here, the North East of Scotland is an energy ecosystem without rival and the most attractive location in Europe to invest in low carbon technologies.”

Scottish budget ‘falls short’ on skills, colleges and ASN support

A trade body has applauded the housing and green energy funding but urged action on apprenticeship and further education investment.

The Scottish and Northern Ireland Plumbing Employers’ Federation (SNIPEF) has warned that ambitious plans for housing and green energy risk being derailed by a critical skills shortage in the plumbing and heating profession.

Fiona Hodgson, chief executive of SNIPEF

“The allocation of £768m to deliver 8,000 low and middle-income homes is a positive step forward and will undoubtedly drive demand for plumbing and heating professionals.

“Likewise, the £300m investment to improve heating and insulation as part of the effort to tackle fuel poverty, alongside £25m for new green energy jobs, which we hope will include apprenticeships, demonstrates a commendable commitment to achieving Scotland’s climate goals.”

The Scottish Government has also been criticised for failing to allocate sufficient funding to colleges in the draft Budget unveiled today.

Ministers have pledged less than half of the £25m required to address rising inflationary costs, leaving Scotland’s 24 colleges struggling with a persistent 17% real-terms funding cut since 2021/22.

Alarmingly, the Budget neglects critical issues, such as replacing crumbling RAAC concrete in seven colleges, reinstating a vital employer training scheme, and investing in improved classrooms and digital resources for students.

The draft Budget proposes a 1.8% increase in college funding - falling well short of the 3.2% inflation rate.

Dr Graeme Jackson, interim CEO of Colleges Scotland

“This draft Budget fails to recognise the vital role colleges play in driving economic growth, reducing poverty, and strengthening communities. While additional resources for the NHS and commitments to a greener economy are welcome, these ambitions hinge on the capacity of colleges to upskill and support the workforce - capacity this Budget undermines.

“Leaving colleges millions of pounds short is unacceptable. Leaders across Scotland’s 24 colleges have already been forced to make painful cuts to jobs, classrooms, and infrastructure. The Scottish Government’s continued disinvestment in such a cornerstone of the education and skills sector is deeply troubling.”

Brian Logan, CEO of Capability Scotland

“We are deeply disappointed that the Scottish Budget has failed to improve Scotland’s Additional Support Needs (ASN) facilities within further education centres.

“This omission underscores a missed opportunity to make meaningful, long-term investments that would transform the lives of countless young people with ASN.

“The decision to retrofit staff and mainstream further education facilities, instead of creating and investing in dedicated ASN support staff and specialist teachers is short-sighted, and risks failing the very students who need tailored support the most.

“You simply cannot replace the expertise and focus of dedicated professionals equipped to meet the diverse needs of ASN learners.

“At Capability Scotland, we see first-hand the difference that well-resourced, specialist facilities and staff make in enabling individuals with ASN to thrive.

“Our facility Corseford College, Scotland’s first dedicated college for young people with complex needs demonstrates what is possible when we invest in tailored, specialist facilities and highly skilled staff. It provides a lifeline to students and families, proving that with the right resources, ASN learners can achieve their full potential.

“However, this should not be the exception – it should be the standard across Scotland.

“Without a commitment to improving and expanding these resources, we risk limiting opportunities for ASN learners, reinforcing barriers to education and employment, and undermining Scotland’s potential to be an inclusive and forward-thinking nation.

“We are calling on MSPs from all parties to prioritise and champion investment in dedicated ASN facilities for further education centres. This is not just a matter of fairness – it is essential for building a future where every young person in Scotland, regardless of their needs, has a positive destination to go to post-school.”