Press & Policy

Shona Robison MSP

Cabinet Secretary for Finance and Local Government

Dear Cabinet Secretary,

Scottish Budget: Aim for growth and shore up business confidence

I am writing to you ahead of January’s budget to urge you to deliver measures which help to deliver on our shared ambition of making Scotland the best place in the world to do business.

There is already so much to be positive about: Scotland is seizing the renewables revolution, now a £10 bn turnover industry; inward investment now exceeds 10% of GDP; and high-value sectors such as life sciences and AI are experiencing rapid growth. Add to this a world-leading space sector, vibrant creative industries, and promising new funding for town and city-region regeneration, and a bright picture of Scotland’s economic future emerges.

Equally, it is important to be realistic about the challenges, and government must reflect this with policies that support business and entrepreneurs.

The UK Government’s Autumn Statement did little to restore business confidence. However, the additional £820m in Barnett consequentials presents a significant opportunity to show Scotland’s business community that your Government is one that takes competitiveness seriously.

Throughout 2025, our quarterly surveys have shown a steady weakening in business confidence. Familiar pressures of labour costs, taxation, and declining investment have worsened as the year has gone on, contributing to a gloomy outlook for SMEs going into 2026. We encourage you to implement the following measures, which will help to put Scotland on the path to sustainable, long-term prosperity.

1. Freeze the Basic Rate of NDR, and provide targeted relief to retail, tourism and hospitality firms

Scottish firms now pay £54.7 million more every year in business rates than comparable businesses in England. At a time when global competition is already intensifying, this additional cost burden is a growing competitive disadvantage compared with other parts of the UK, which is squeezing profits and hitting our high streets hard. Our survey reflects this – more than 70% of businesses tell us that taxation is a growing concern, up from around 50% a year ago.

That concern is set to increase further following the upcoming business rates revaluation. Our membership has expressed overwhelming alarm at the scale of projected increases. One holiday rental business in Ayrshire is facing a projected increase in rateable value of 120%: an uplift that cannot be absorbed without undermining jobs and future investment. This is by no means an isolated story: another small business told us their rates are projected to increase by almost 350%. Cabinet Secretary, your budget presents the opportunity to pause the revaluation process as a matter of urgency and work with industry to develop an approach that is proportionate, predictable and supports growth.

More broadly, the Scottish Government to recognise that an uncompetitive domestic tax environment is supressing investment and constraining growth. The Budget must deliver an immediate freeze on the basic rate, not just for 2026-27, but until 2028, to give firms and investors the clarity they need to plan ahead. Beyond that, Government should provide targeted relief to those sectors most acutely affected: particularly SMEs in retail, hospitality and tourism. Without meaningful support, it’s Scotland’s communities that will pay the heaviest price: losing vital businesses, facing further job losses.

2. Deliver a new funding model for colleges and universities to alleviate the skills crisis

Ongoing engagement with our members highlights concerns about workforce capacity, even in sectors where Scotland has strong long-term prospects. In renewable energy, industry evidence suggests that skills availability is not keeping pace with the scale of projects in development. These pressures are mirrored across the wider economy, and workforce shortages run the risk of delaying the delivery of essential infrastructure.

This points to a broader misalignment between skills provision and the needs of the economy. With colleges and universities facing acute funding pressures, and an estimated skills gap of 1.1 million workers required to meet national infrastructure priorities, it is clear that Scotland’s skills system needs to be recalibrated. Business needs must be more firmly embedded in the system, ensuring that provision aligns with economic demand and that no young person in need of training is left behind.

The forthcoming Budget therefore presents an opportunity to stabilise funding for colleges and universities and embed employer engagement, skills alignment with economic demand within Tertiary Education and Training Bill strengthening employer engagement and better aligning skills provision with economic demand.

We recognise the vital role of overseas labour to fix this challenge, and are engaged in an ongoing dialogue with the UK government on an international workforce policy that aligns with Scotland’s unique economic needs.

3. Fund additional planning resources

Without modern, well-connected infrastructure – including housing, transport and digital connectivity – Scotland’s economic ambitions will not be realised. Planning capacity is now one of the most significant barriers to the delivery of homes, infrastructure and commercial development, though positive steps have been taken, such as the creation of the National Planning Hub, which has started to ease the most acute shortages.

This Budget should build on this momentum by investing in the planning skills pipeline, including funding for careers services specifically targeting future planners. This should include the expansion of the Future Planners Programme, doubling the number of candidates from 18 to 36, alongside support for mid-career retraining, mirroring the Autumn Statement, to help address the acute shortage of planners.

These measures must sit alongside action to bolster planning capacity in the short term. There are no quick fixes, and the benefits of these changes will time to materialise, but long-term, strategic investment is essential if Scotland is to improve competitiveness and unlock growth across the economy.

Improvements in these areas will play a key role in delivering sustainable, long-term prosperity for firms and for the communities they serve. If the Government is to deliver on its priorities of Growing the Economy, Eradicating Child Poverty, Tackling the Climate Emergency, and Delivering High-Quality and Sustainable Public Services, then it must do so by backing businesses and fostering the dynamic and inclusive economy that Scotland’s communities deserve.

Cabinet Secretary, the Scottish economy is at a turning point. This Budget is a chance to send a clear signal that Scotland is open for growth, innovation, and investment. By working together, we can create the conditions for businesses to thrive, attract new opportunities, and deliver prosperity for every community. Our network is ready to help make this the most ambitious, pro-growth Budget of this parliament so far.

Yours sincerely,​

Dr Liz Cameron CBE

Director & Chief Executive

Scottish Chambers of Commerce