2026: Scottish Policy, Political Change, and the Future of Social Enterprise
Posted: 16 January 2026, in News
Scotland is now 111 days from the next Scottish Parliamentary Election, an election that will determine not only the composition of the Scottish Parliament, but the policy direction of the country at a moment of economic constraint, public service reform, and growing social need.
The recently published Scottish Budget has been characterised as a continuity budget. Its primary function is not to introduce major structural reform, but to maintain stability, protect core commitments, and provide the incoming Scottish Government with a manageable fiscal baseline from which to govern.
However, the Budget does include some headline measures: the introduction of two new council tax bands referred to as a ‘mansion tax’; a private jet levy; enhanced investment in tackling child poverty. The funding previously allocated to mitigate the UK Government’s two-child benefit cap, only recently lifted by the UK Government, has contributed to an increase in the Scottish Child Payment to £40 per week for a least until the end of 2027. Finally, there have been revisions to income tax thresholds. These changes to income tax bands (basic and intermediate rate) mean that approximately 55% of Scottish workers will pay less income tax than elsewhere in the UK.
These measures reflect an intention to combine progressive taxation with targeted social investment. The next Parliament will inherit a system in which resources remain constrained, expectations remain high, and delivery will depend increasingly on collaboration across sectors.
For individuals employed within social enterprises, reduced tax at lower and intermediate bands will provide modest but welcome financial relief. More significantly, enhanced investment in child poverty reduction aligns directly with the preventative, community-based approaches that many social enterprises already deliver.
For our social enterprises themselves, the protection of the social enterprise budget is an important signal. The infrastructure support for social enterprise funding was protected but the real story for social enterprises isn’t in a single budget line. It’s in the wider trends across government spend. This budget protects and invests in areas where social enterprises already deliver at scale. Alongside business rate relief for small enterprises, and for those operating in leisure and hospitality, it indicates a recognition of the sector’s economic and social contribution. With the Social Enterprise Action Plan in concluding in 2026, this presents a decisive policy moment. The next Scottish Government must determine whether social enterprise remains a supported sector, or whether it becomes a formally embedded component of Scotland’s economic and public service architecture.
Social Enterprise Scotland’s manifesto argues directly for the latter.
It sets out three core changes:
First, Social Enterprise Networks should be formally recognised, resourced, and integrated as regional hubs for enterprise development, community wealth building, and local economic planning.
Second, social enterprises must be systematically integrated into public service delivery through a national framework for commissioning, procurement, and partnership — ensuring consistency, transparency, and accessibility across all public bodies.
Third, policy must shift from short-term project funding toward long-term institutional reform, enabling social enterprises to operate as stable delivery partners rather than temporary contractors.
Current polling suggests the next Scottish Parliament will be highly fragmented. While the SNP remain the largest party, they are unlikely to secure an overall majority. Support for Scottish Labour has declined sharply this past year, Reform has experienced growth which is now hitting its upward limit, and the Greens and Liberal Democrats have both consolidated their positions. Conservative support has fallen significantly.
The consequence is not simply political uncertainty, but structural change in how power operates within Holyrood. Legislation, budgets, and policy reform will depend on negotiation across party lines. Smaller parties and, in some cases, individual MSPs will hold increased influence. In such a Parliament, policy credibility, evidence, and practical deliverability will carry greater weight than ideological positioning alone.
This makes our work more interesting and important; we will be working harder to ensure that new MSPs see our manifesto and visit their communities where social enterprises are based.
With up to 42 MSPs standing down, the next Parliament will include an unusually high number of new members. Many will arrive with limited exposure to social enterprise as a policy mechanism, economic actor, or public service partner.
This creates an urgent responsibility for Social Enterprise Scotland, supported by the IDBM alliance and with the recommendations from the IDBM report to give further structure to our arguments.
Early engagement, clear evidence, and coherent policy proposals will be essential if social enterprise is to be understood as a central component of Scotland’s response to inequality, public service pressure, and regional economic imbalance.
Our manifesto does not present social enterprise as an optional addition to existing policy frameworks. It presents it as a delivery model capable of strengthening public services, retaining economic value within communities, and improving outcomes for those most excluded from conventional systems. Good jobs, investment in local communities and support for the those who need it.
The 2026 election will determine whether Scotland adopts a more integrated, collaborative, and preventative model of governance. Social enterprise offers a proven pathway toward that model.