The Scotland Act 1998 (Increase of Borrowing Limits) Order 2026
Raised the statutory resource and capital borrowing limits for the Scottish Government and revoked the previous year's limits.
This Order increases the statutory limits on the amount the Scottish Ministers may borrow for both resource and capital expenditure.
It raises the maximum resource borrowing limit to £1,910.141 million and the capital borrowing limit to £3,274.527 million.
These changes apply to the Scottish Government and the UK Treasury, effective from 30 June 2026.
Arguments For
The order states that it updates the fiscal framework for the Scottish Government by increasing the aggregate borrowing limits for specific purposes.
Proponents within the government maintain that the adjustments reflect requirements for resource and capital expenditure under the Scotland Act 1998.
The document notes that the 2025 order has been superseded, implying a need for periodic adjustment of these financial thresholds.
The explanatory note asserts that no significant impact on the voluntary or public sector is foreseen from these adjustments.
Arguments Against
Legal commentators might note that the document does not provide the economic data or inflation-linkage formulas used to calculate these specific figures.
Opposition parties in the Scottish Parliament have historically argued that fixed borrowing limits, even when increased, do not provide sufficient flexibility to respond to major economic shocks.
Some analysts may question the frequency of these orders, as this instrument revokes a similar order from only one year prior, potentially indicating a lack of long-term fiscal certainty.
- —(1) This Order may be cited as the Scotland Act 1998 (Increase of Borrowing Limits) Order 2026. (2) It comes into force on the day after the day on which it is made. (3) It extends to England and Wales, Scotland and Northern Ireland.
This section establishes the official name of the order and sets the commencement date as 30 June 2026.
It confirms that the legal jurisdiction of the order covers the entire United Kingdom.
- —(1) The Scotland Act 1998 is amended as follows. (2) In section 67(2) (lending under section 66(1)), for '£1,834.303 million' substitute '£1,910.141 million'. (3) In section 67A(1) (lending for capital expenditure), for '£3,144.519 million' substitute '£3,274.527 million'.
This section modifies the primary legislation governing Scottish devolution to increase two specific financial caps.
The resource borrowing limit for managing cash flow and budget volatility is increased to £1.91 billion, while the limit for long-term investment in infrastructure and assets is increased to £3.27 billion.
- The Scotland Act 1998 (Increase of Borrowing Limits) Order 2025( 3 ) is revoked.
This section cancels the effectiveness of the preceding year's order regarding borrowing limits.
This ensures that only the new, higher limits established in section 2 are legally applicable.
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