Finance Secretary Shona Robison unveiled the budget for 2025-26, with key spending announcements on health, welfare and tax.
Here is everything you need to know from the Scottish Government's spending and tax plans for the year ahead.
Record NHS spending
Ms Robison said "record" funding will be provided to support Scotland's NHS. A settlement of £21 bill ion was set out by the Finance Secretary.
She described it as her "biggest commitment" in the budget, arguing it will see people given improved access to A&E, GPs.
A key pledge has seen the Scottish Government announce that no one will wait longer than 12 months for a new outpatient appointment, inpatient treatment or day case treatment.
With waiting times across the NHS continuously high, it is a promise ministers will be held to account on.
Ms Robison said: "Today’s budget provides a record £21 billion for health and social care.
“An increase of £2 billion for frontline NHS boards – a record uplift.
“That is money that will make it easier for people to access GP appointments, that will improve A&E and ensure more Scots get the care they need in good time.”
Housing funding u-turn
A funding cut of £200 million to the provision of affordable homes was cut in the budget.
It comes after The Herald released a seven-point charter to end Scotland's housing emergency in July.
Ms Robison announced the budget would return affordable housing spending to a "higher level" than it was two years ago.
READ MORE: Herald campaign 'forces' ScotGov u-turn in housing emergency
The Scottish Government has confirmed it is investing £768m in 2025/26 for affordable homes. It is actually £11m less than was allocated in 2021/22.
Income tax bands frozen
There will be no changes to the tax band rates set by the Scottish Government for the 2025-26 financial years.
However, a 3.5% increase to the thresholds for the basic and intermediate - 20 and 21% - was announced.
It means the basic rate will now be paid at between £15,398 and £27,491, while the intermediate rate will sit at between £27,492 and £43,662.
Record cash award for Scottish councils
Scottish councils will receive a record funding settlement from the Budget.
Ms Robison said: “In 2025-26, the Scottish Government will increase local authority funding by more than £1 billion.
“It will take their total funding to over £15 billion, including £289 million to give real-terms protection to the general revenue grant.”
She said this cash delivers the pay increases agreed for teachers, social care workers and refuse collectors, among others.
No council tax freeze
There is “no reason” for big increases in council tax, the Finance Secretary has said.
She announced a more than £1 billion uplift for local authorities, but warned that levies should be kept low after a council tax freeze in the past 12 months.
“While it will be for councils to make their own decisions with record funding, there is no reason for big increases in council tax next year,” she said.
– No changes to income tax bands
Income tax rates in Scotland have been frozen until 2026, Ms Robison told MSPs.
She announced that there would be no change in this Parliament to the rates, nor would any more bands be introduced.
Meanwhile, the amount at which the basic and intermediate rates – 20% and 21% – is paid will increase by 3.5% in the next financial year, which Ms Robison has said will see more paying the lower 19% rate due to increasing wages.
Two-child benefit cap mitigated
The Scottish Government will mitigate the impact of the two-child benefit cap, Ms Robison said.
Ministers north of the border have hit out at the Tory-implemented policy for years, which has not been scrapped by the new Labour administration.
She urged the UK Government to provide the necessary data to allow for the change to be made.
“Be in no doubt that the cap will be scrapped,” she said.
“My challenge to Labour is to work with us – join us in ending the cap in Scotland, give us the information that we need.
“But, either way, 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.”
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