The phoney war has begun, yet the actual date of Scotland’s election in 2026 has not yet been decided. Behind the scenes, the major political parties are cranking up for what will be one of the most defining Scottish Parliamentary elections since the devolved administration’s creation in 1999.

Scotland’s business community and the issues of jobs, investment in skills and training, opportunities and infrastructure will be at the forefront. It will be for the wider population to decide the outcome but issues of personal and business taxation, and the increasing disparity between Scotland and the rest of the UK is increasingly in the political cross-hairs.

Before the elections have begun, an illuminating annual spotlight into the priorities for our public services has been published by Deloitte in their State of the State 2025 survey.  The findings, which have been undertaken for ten years, bolt together a survey of the public alongside senior people in the public sector, including executives in Scotland’s NHS and council services. It indicates clearly that the public’s priorities have shifted in the last year.

Lesley Smillie, partner government and public services, Deloitte, said: “Scotland’s public sector continues to deliver in some difficult circumstances. NHS and council services remain fragile in the wake of COVID and the elevated demand left in its wake. Untenable pressure on the public finances have forced decisive interventions from the Scottish Government. And the need to do more with less funding – in other words, boost productivity – has never been greater. Against that challenging backdrop, there is optimism and a sense of opportunity for Scotland – not just among its public but among its public sector leaders.”

Her colleague, and co-author, Ed Roddis, head of public sector research, speaking with The Business in Edinburgh, said: “This year’s story in Scotland is one of a real change in attitudes amongst the public that sort of chimes with the rest of the UK, but it does have a Scottish flavour as well.”

“I see a sense of optimism because the next government in Scotland, whoever it is, has got some stark, stark choices to make. Yet public sector leaders are willing them to make those choices and wanting them to prioritise. Those stark choices may create the burning platform for some real transformational opportunities in the public sector,” he added.

The report found that while the Scottish public is broadly split on taxation (31% want higher public spending and higher taxes, while 34% want lower taxes and lower spending), there is shift in the public mood towards favouring tax cuts.  The Scottish public’s expectation that taxes will go up has risen 14 percentage points to 44%, compared to 46% in the UK, which rose by 15 percentage points. This significant increase in expectations suggests growing public concern over potential fiscal policies and their impact on household finances.

“The shift in public sentiment towards tax cuts reflects the real pressures that households and businesses across Scotland are facing. At a time of tight public finances and increasing demands on essential services, balancing the need for tax relief with sustainable investment in public services will be a key challenge for policymakers. It’s crucial that any fiscal decisions are made with a long-term perspective, ensuring both economic growth, and the resilience of the public sector,” said Lesley Smillie.

While the top priorities for improvement in the UK over the next few years remains the cost of living crisis (73% say it is a priority), the NHS (73%), and jobs and economic growth (44%), all three of these priorities have had a noticeable decline from 2023, by 11%, 1% and 2% respectively, What has increased is concern about immigration and border security, defence and national security. In Scotland, concerns about defence and national security have risen by 11 percentage points, to 31%, while immigration and border security has grown by six percentage points, to 39%, putting in it in sixth place for Scotland and third place for the rest of the UK.

However, it was clear that Scotland does not share as high a concern about immigration than the rest of the UK, and immigration North of the Border was a more nuanced debate around the need for skills and jobs to be filled by ‘New Scots’.

Notably, climate change has slipped eight percentage points in the Scottish public’s list of priorities, down to 38%, while 71% of people said they don’t believe that Scotland will achieve its net zero target of 2045. The report writers say that perhaps there has been a complacency about climate change – or that geo-political pressures may be impacting on the debate.

 The good news for the incumbents in Holyrood is that confidence in the Scottish Government’s ability to deliver positive impact is highest among the devolved administrations and is particularly favourable when it comes to promoting Scotland’s standing in the world and how well communities get on.

“In Scotland, the level of pessimism has come down. People have become less worried about a whole bunch of things, and I mean significantly. They are less worried about where the NHS is going, less worried about housing, and less worried about climate change. The only one they are mor worried about is defence.”

 While the report made five recommendations, it is the nuances behind this, such as the public’s changing views on taxation, which will have an impact on deciding the winners and losers in 2026.

The State of the State 2025 recommendations are:

  • Prioritise, devolve and optimise. When discussing public sector reform, leaders told Deloitte they want to see Scottish Government prioritise more effectively, making deliberate choices based on affordability. Many argued that devolution within Scotland – perhaps to single, strategic authorities – could optimise public services.
  • Turn up the volume on the green agenda. The research finds the public becoming less worried about climate change – perhaps even complacent – and public sector leaders concerned that net zero targets will not be met. That suggests a pressing need for every organisation and business engaged in net zero transition to engage the public in the climate agenda and why it matters.
  • Invest in the skills system. Public sector leaders believe government should ensure adequate investment in the nation’s skills. They argue that investment in further education and adult skills means investment in Scotland’s economic growth, investment in productivity, investment in tackling income inequalities and investment in delivering the government’s four priorities.
  • Grow the public sector’s ‘halo effect’ technology successes. While commentaries often focus on the problems, Scotland and the wider UK’s public sector have rolled out some world-leading uses of technology. Rather than re-invent new solutions at every turn, the sector should consider how it can grow out its best examples – the projects with a halo effect – into new uses.
  • Provide regular figures on the ‘public sector gap’. The Deloitte survey shows the Scottish public understand the funding pressures on public services. That view is informed by regular updates on the state of the public finances and budget settlements across the public sector. What’s missing is a view on the gap between what those funding settlements can achieve versus the demands on them.

 

Please click here for the State of the State 2025 report.