Business groups have expressed dismay that the Scottish budget offers “short-term fixes” rather than a long term plan to deliver growth.

The SNP government’s budget for 2025/26 was approved with the support of the LibDems and Greens. while Labour abstained and the Tories voted against.

SNP depute leader Keith Brown said it would “deliver real progress on people’s priorities – offering hope and putting in place the investment for Scotland to win big in the future.”

Business leaders were left regretting that the budget fell short of meeting their needs.

The Institute of Chartered Accountants of Scotland (ICAS) restated its concern that the budget “lacks the vision or structural reform needed to provide long-term economic certainty.”  

ICAS chief executive Bruce Cartwright said: “The Scottish Budget passed in Holyrood today is a short-term fix that falls short of delivering impactful change.

“Despite an additional £5.2 billion of funding from Westminster, the budget doesn’t provide the clear, long-term tax strategy that businesses need to help them plan with confidence, or the well-defined reform roadmap required to transform Scotland’s public sector services.”

He added: “While increases to the starter, basic and intermediate income tax band thresholds offer a small relief to taxpayers on lower incomes, this gain will be outweighed by significant council tax increases across Scotland.

“With the nationwide freeze ending in April, many local authorities are raising rates by as much as 10 per cent to offset past funding cuts, placing even more financial pressure on families and businesses who are already struggling. 

“The record £21 billion allocated to the NHS and increased local authority funding remain welcome announcements. However, without a clear strategy for reform, investment alone won’t resolve the deep-rooted challenges facing Scotland’s public services. More funding is not the answer if failing systems remain unchanged.  

“We will continue to call for a more strategic approach to taxation and public service reform that provides businesses and taxpayers with the stability, certainty and quality of services they need. We hope that the Scottish Government’s Medium Term Financial Strategy, expected in late May, will offer the strategic detail necessary to secure a positive economic future for Scotland.” 

Michelle Ferguson, director at CBI Scotland, said: “The passing of the Budget by MSPs will help to shore up the public sector and households most in need when fiscal headroom is in short supply.

“But Scotland is underperforming in areas crucial to our long-term prosperity, such as business investment and businesses desperately lack access to the people and skills that they need to succeed.

“The only way to improve public services and raise living standards is to help companies thrive and deliver growth.

“That’s why we need more competitive tax policies and business working with the Scottish Government to co-create policy that protects Scotland’s competitiveness and avoids short-changing our long-term growth ambitions, especially in green jobs and offshore wind.”

Mr Brown was critical of Labour’s decision to abstain. “Anas Sarwar’s Labour Party failed to show that it is serious about the NHS, eradicating child poverty and securing a future for Grangemouth by choosing not to back the Budget,” he said.

Scottish Labour finance spokesperson Michael Marra said: “Today’s budget is only possible is because the Labour UK government moved decisively to end austerity, rebuild the public finances and invest in public services.

“Labour delivered the largest budget settlement in the history of devolution, and the SNP lined up with the Tories to vote against it.

“Scotland is being let down by an irresponsible SNP Government that has been reckless with your money and feckless with your public services.

“Despite Labour’s record budget settlement, working Scots are still paying the price for SNP incompetence – from higher income taxes to inflation-busting Council Tax hikes.  

“Our country needs a new direction, and Scottish Labour will deliver it.”

Scottish Tories spokesperson on finance and local government Craig Hoy said: “Scotland’s economy is crying out for a change of direction.

“This budget could, and should, have cut taxes for hard-working Scots and businesses, set a new direction for social security, and tackled the bloated SNP state.

“Instead, these proposals will stifle the economic growth vital to the future of public services in Scotland.

“After Labour’s crippling National Insurance jobs tax, we needed a budget based on common sense and sound finances.

“The Scottish Conservatives argued for a cut in income tax, on house sales, and rates relief for business because SNP policies mean that Scots taxpayers are paying £1.7 billion more than they would in the rest of the UK.

“But this dire budget will pass with the support of the Greens and the Lib Dems – without even a flicker of opposition from the spineless Labour Party.

“The cosy, left-wing consensus at Holyrood has given us the UK’s highest taxes and a welfare bill and government spending that are no longer sustainable or affordable.

“Only the Scottish Conservatives will stand up for taxpayers and for businesses.”