Spending boost for Scottish homes, prisons and infrastructure | Construction News

The Scottish Government has signed off spending plans that include cash for new homes, prisons and road repairs.

The Scottish Budget for 2025/26 pledged £2.6bn for public transport, including rail infrastructure and enhancements to ports and harbours.

Yesterday’s announcement (4 December) included a £1.1bn investment in trunk roads. The cash will be used for maintenance and enhancements, as well as long-running projects such as the A9 dualling.

The A9 project is currently being carried out by Balfour Beatty on the stretch between Tomatin and Moy.

Prisons have been allocated £881.1m including £347m for the construction of HMP Glasgow and HMP Highland.

Kier submitted the masterplan for HMP Glasgow in December 2022. Last year its cost was said to have risen to more than £400m.

Balfour Beatty is onsite delivering HMP Highland, a £209m job set to be completed in 2026.

The Scottish Budget plans also include spending £590m on new homes and £52m on cladding remediation, as well as £6m on island infrastructure projects.

Finance secretary Shona Robison said: “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 important that we have a safe road network, and a lot of that funding is essential spend on the maintenance of our road network.”

On affordable housing funding, she added: “I think that the level set is achievable and deliverable. It will help the sector to scale up in order to deliver on new-builds, acquisitions and empty homes and to tackle temporary accommodation.”

An analysis of the budget by the Institute for Fiscal Studies (IFS) revealed capital funding will grow by around 12 per cent in real terms next year. The IFS also predicted spending will then fall by close to 5 per cent in real terms in 2026/27. The think tank forecast it will remain at these lower levels for the following three years.

Housing expertssaid that, along with the increase in funding, ministers need to take action on other policies to enable more homes to be built.

Chief executive of Homes for Scotland Jane Wood said: “Given the significant challenges which have arisen as a result of the cuts to this year’s budget, the reinstatement of this funding for 2025/26 is a welcome boost.

“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.”

She also called for clarity on the Building Safety Levy and Accessible Homes Standard, as both have the potential to increase costs.

Jim Baxter, financial director at Allanwater Homes, said the government could have gone further to support housebuilders in Scotland, particularly SMEs.

“Unfortunately, the Scottish government followed Westminster’s lead, improving minimum wages and pensions but without incentivising employers to expand workforces.”

He added: “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.”