The Scottish Government entered 2025–26 with a target to reduce Scotland’s devolved public-sector workforce by an average of 0.5 per cent a year through 2029–30. Instead, the workforce grew in the first year. New Scottish Fiscal Commission analysis says larger reductions will now be required from 2026–27 onwards if the original target is still to be met, while the Government is simultaneously trying to deliver £1.5 billion of efficiency savings over three years.
The planned reduction was never intended to fall evenly across every public body or every year. Ministers described it as a managed five-year trajectory, supported by recruitment controls, natural attrition, service redesign, automation, shared services and restructuring.
The first full year has nevertheless moved in the opposite direction.
Scottish Government statistics show 553,900 people employed in the devolved public sector in March 2026, 3,770 more than a year earlier. By June, the headcount stood at 553,600, up 6,060, or 1.1 per cent, from June 2025.
The increase was concentrated in the largest parts of the public sector. NHS employment rose by 3,700 over the year to June. Local-government employment increased by 2,320. The devolved civil service increased by 280 and public corporations by 240.
Further-education colleges moved in the opposite direction, losing 310 staff, while other public bodies fell by 140 and police and fire services by 30.
The Scottish Fiscal Commission said on 30 September that the first-year increase means the remaining years of the programme will require larger reductions if the Government is to deliver its original average 0.5 per cent annual target by 2029–30.
The Workforce Target Sits Inside a £1.5 Billion Savings Programme
The headcount target forms only one part of a wider fiscal plan.
The Scottish Spending Review published in January assumed government portfolios would deliver approximately £1.5 billion of efficiency savings between 2026–27 and 2028–29, including £563 million in the current financial year.
The Fiscal Commission calculates that around 15 per cent of those planned savings are expected to come from workforce measures.
The largest single block of savings is elsewhere. Almost half of the planned total is expected to come from NHS boards delivering recurring savings of around 3 per cent a year.
That assumption is already under scrutiny. The Fiscal Commission cited Audit Scotland evidence showing that only 15 per cent of territorial NHS boards and 37.5 per cent of special boards delivered their required savings in 2024–25, with several continuing to require additional Scottish Government financial support to balance their books.
The Commission also noted that, as of the end of September, the Scottish Government had not yet published an assessment of progress against the wider £1.5 billion efficiency programme.
The Cuts Are Already Much Deeper in Some Parts of Government
The national 0.5 per cent target can obscure much larger reductions already occurring inside individual organisations and portfolios.
The Economy portfolio provides some of the clearest examples.
The Scottish Spending Review says the Directorate-General Economy workforce fell from 806 full-time equivalent staff in 2022–23 to 606, a reduction of 24.8 per cent.
Scottish Enterprise reduced its domestic workforce by 182 FTE, or 16 per cent, between the second quarters of 2019 and 2025.
Highlands and Islands Enterprise reduced its FTE workforce by 35, or 13 per cent, between the second quarters of 2020 and 2025.
VisitScotland expects its workforce to be 29 per cent smaller by 2029–30 as part of its Strategic Change Programme.
Skills Development Scotland says its Transform 27 programme has already reduced headcount by 18 per cent, its property estate by 50 per cent and corporate-service costs by 35 per cent.
The Scottish Qualifications Authority reduced its workforce by 4.5 per cent over the year covered by the Spending Review while preparing to transition into Qualifications Scotland.
These changes are considerably larger than the headline 0.5 per cent annual reduction because the national target is an average across a public sector in which some workforces are still growing.
Colleges Have Been Reducing Staff for Years
Further education is one area where the latest national statistics already show contraction.
College employment fell by 3.3 per cent between March 2025 and March 2026 and by 2.6 per cent between June 2025 and June 2026.
The Spending Review says the college workforce had fallen by around 1,200 staff cumulatively since 2014, equivalent to a 9 per cent reduction by April 2025.
Those reductions predate the current five-year public-sector workforce target and reflect a longer period of restructuring across the college sector.
Education bodies are being asked to find further savings through organisational redesign, digital delivery, contractor reductions and shared services.
The Education and Skills portfolio is expected to generate £18.4 million of workforce savings in 2026–27, followed by another £7.4 million in 2027–28 and £9.5 million in 2028–29.
Justice Plans £45 Million of Annual Workforce Savings by 2028–29
The Justice and Home Affairs portfolio has one of the clearest forward workforce savings profiles in the Spending Review.
Its plans identify £19 million of workforce savings in 2026–27, rising to £32 million in 2027–28 and £45 million in 2028–29.
The Scottish Government says Police Scotland and the Scottish Fire and Rescue Service have already reduced their workforces by around 4 per cent in recent years and continue to budget with high vacancy assumptions.
Those organisations sit inside a justice system simultaneously dealing with prison capacity, court delays, growing sexual-offence and domestic-abuse caseloads, cybercrime and other operational pressures.
The Government’s stated approach is to protect frontline services while reducing corporate and support costs, but the published national workforce statistics do not divide every change into frontline and back-office roles.
That makes organisation-level and occupational data increasingly important if future reductions are to be assessed against the promise that direct services will be protected.
Rural Government Has Already Lost Almost One in Ten Core Staff
The Rural Affairs, Land Reform and Islands portfolio says its core Scottish Government headcount has fallen by almost 10 per cent over two years.
The portfolio has further workforce savings of £8.2 million scheduled for 2026–27, £6.7 million in 2027–28 and £5.8 million in 2028–29.
Its plans include recruitment controls, merging policy divisions, greater use of shared services, centralisation of common administrative functions and trials of satellite monitoring and drones in areas previously requiring more conventional inspection methods.
The Spending Review says work arising from the new UK-EU sanitary and phytosanitary agreement will also have to be absorbed through workforce efficiencies within Scottish Government rural directorates, even though the UK Government allocated additional funding to DEFRA for its own implementation work.
That creates a recurring feature of the savings programme: fewer staff are not necessarily expected to perform less work. In several portfolios, reduction is explicitly tied to redesigned processes, automation and consolidation intended to maintain or increase output with a smaller workforce.
Culture and National Records Are Also Being Restructured
The Constitution, External Affairs and Culture portfolio plans £4.2 million of efficiency savings in 2026–27, with £1.4 million attributed to Scottish Government workforce savings and £2.8 million to public-body workforce savings.
National Records of Scotland has already reduced staff numbers by 13 per cent and says it has delivered £4.25 million of annual savings.
It is expected to reduce costs further by the end of the Spending Review period through staffing reductions, prioritisation of statutory functions, estate savings and joint working with the Office for National Statistics and Northern Ireland Statistics and Research Agency.
The portfolio also includes Historic Environment Scotland, Creative Scotland, National Museums Scotland, National Galleries of Scotland and the National Library of Scotland.
The savings programme therefore extends well beyond central government administration and into institutions responsible for national collections, records and cultural infrastructure.
The Core Scottish Government Is Already Getting Smaller
The apparent contradiction between a growing devolved public sector and a shrinking central administration is partly explained by where employment is changing.
Scottish Government workforce statistics show 8,563 directly employed FTE staff in the core organisation at the end of June 2026, down 3.3 per cent from 8,857 a year earlier.
The number of contingent workers fell even more sharply, from 1,049 to 631 — a reduction of 39.8 per cent.
Some of that fall reflects organisational transfers rather than jobs disappearing. During March and April, 174 directly employed staff and 186 contingent workers moved from the core Scottish Government to Social Security Scotland and the new National Social Work Agency as functions were transferred.
Even allowing for those movements, ministers say tighter recruitment controls have materially reduced the size of the core administration.
In a parliamentary answer issued on 24 September, Public Finance Minister Ivan McKee said the combined core workforce of directly employed FTE staff and contingent workers had fallen by 11.4 per cent between March 2022 and March 2026.
The Government is now extending similar controls more widely across public bodies.
The Reduction Is Not Intended to Be Linear
The failure to record a 0.5 per cent reduction in the first year does not technically mean the Government has missed a yearly quota.
Its commitment is expressed as an average reduction over the full period to 2029–30.
McKee told Parliament that the trajectory was not expected to be linear because some reductions depend upon longer-term restructuring of health boards, public bodies and local government.
That flexibility is now financially important.
Because employment increased in 2025–26, the Fiscal Commission says larger reductions will have to occur in later years if the same end point is retained.
The Commission has asked for an updated workforce profile alongside the December Scottish Budget so the scale and timing of those later reductions can be assessed.
The Largest Workforces Are Still Growing
The central difficulty is visible in the June employment figures.
The NHS and local government together account for the majority of Scotland’s devolved public-sector workforce.
Both grew over the latest year.
NHS employment increased by 2 per cent between June 2025 and June 2026, adding approximately 3,700 people.
Local government increased by 0.9 per cent, adding around 2,320.
Those increases are large enough to outweigh reductions elsewhere.
They also complicate a policy based on protecting frontline employment while reducing overall headcount. Hospitals, social care, schools and councils contain large numbers of frontline staff, but they also contain the administrative and corporate functions targeted by the wider reform programme.
The Government is therefore relying heavily on service redesign and consolidation rather than uniform percentage cuts across institutions.
Local Government Has Already Reversed an Earlier Fall
The Spending Review recorded that local-government employment had fallen by around 1,500 FTE, or 0.7 per cent, in the year to June 2025.
By June 2026, the official headcount series showed local-government employment 2,320 higher than a year earlier.
The two measures are not directly interchangeable because one is full-time equivalent employment and the other is headcount, but the direction of the latest headcount movement demonstrates why the national workforce trajectory cannot be inferred from individual savings announcements.
Councils retain discretion over how they respond to their own financial settlements and service pressures. The Scottish Government says local government will be expected to participate in further reform and efficiency work but will have flexibility over how savings are achieved.
Social Security Is Shrinking One Workforce While Building Another
Social Security provides another example of how organisational reform can produce apparently contradictory staffing movements.
The programme workforce that built Scotland’s devolved social-security system peaked at around 1,120 FTE in 2022–23.
The Spending Review says a consolidated Digital Delivery and Change function within Social Security Scotland will operate with around 820 FTE in 2026–27, a reduction of 300 roles or 27 per cent from that peak.
Digital staffing costs are expected to fall from £101 million at their 2022–23 peak to around £70 million in 2026–27.
Social Security Scotland itself remains a large operating organisation administering an expanding range of devolved benefits, and some staff have transferred into it from the core Scottish Government.
The portfolio expects further automation and processing improvements to generate at least £15 million a year of recurring workforce savings by 2029–30.
Automation Is Written Directly Into the Workforce Strategy
The Government does not present automation as separate from workforce reduction.
Its Integrated Public Sector Pay and Workforce Policy says the 0.5 per cent trajectory will be aligned with automation, service redesign and “smarter resource use”.
Portfolio plans repeatedly refer to artificial intelligence, cloud systems, shared corporate services and digital processing as mechanisms for reducing administrative cost.
Transport plans to expand Oracle shared services and make greater use of AI and digital tools while managing vacancies and reviewing contractors.
Rural Affairs is trialling satellite monitoring and drones. Education bodies are moving services online and reducing paper administration. Social Security plans further processing automation. The Scottish Government’s own five-year civil-service plan says AI and automation should reduce administrative burden by 2029–30.
The official strategy is therefore not simply to remove posts. It is to redesign work so fewer people are required to perform some administrative functions.
Whether those productivity assumptions are achieved will determine how far headcount can fall without transferring delays or workload into the remaining workforce.
Shared Services Are Part of the Same Programme
Centralisation is another recurring mechanism.
The Scottish Government says smaller public bodies will increasingly be offered common corporate services, including Oracle Cloud and audit functions, through Public Services Delivery Scotland.
The Spending Review contains similar proposals across multiple portfolios for shared HR, finance, procurement, property and administrative systems.
The objective is to remove duplication rather than require each public organisation to maintain the same back-office capability independently.
This is one reason the workforce programme cannot be measured simply by counting redundancies. A job may disappear through attrition, move into another organisation, be absorbed by a shared-service centre or be replaced by an external contract or technology platform.
The Government’s new organisation-level employment statistics are intended partly to make those movements easier to follow, although not every public body has consented to publication of its individual figures.
The Public Data Still Cannot Show Every Reduction
In August, the Scottish Government published individual employment histories for a subset of devolved public organisations for the first time.
The dataset runs back to 2019 and provides both headcount and FTE figures.
It is a significant increase in transparency, but it does not yet provide a complete map of every body because publication depends upon organisational consent and some figures have to be suppressed where releasing them could indirectly reveal data from organisations that did not consent.
The Government also warns that mergers and transfers can make individual organisational changes difficult to interpret. A successor body can appear to grow simply because it has absorbed staff from another organisation.
That problem is already visible in the central-government figures, where staff transferring to Social Security Scotland and the National Social Work Agency reduce one workforce while increasing another without necessarily reducing total employment.
Inflation Has Made the Arithmetic Harder
The workforce plan was also constructed around pay assumptions that have since changed.
The Fiscal Commission says higher inflation during 2026 is likely to trigger protection clauses in agreements covering NHS Agenda for Change employees, Police Scotland, ScotRail and the Scottish Prison Service.
The Scottish Government currently estimates that those inflation effects will increase public-sector workforce costs by around £43 million in 2026–27.
Further inflation could increase that amount.
Higher settlements also leave less room inside the Government’s three-year pay assumptions for future wage increases.
The Fiscal Commission says future budgets therefore face a tighter balance between pay restraint, workforce reductions and maintaining services.
The Government Is Preparing for Further Departures
The Scottish Government’s own civil service plan, published in August, states explicitly that the organisation is intended to become smaller.
It says reductions so far have largely been delivered through natural attrition and recruitment controls, including decisions not to replace some leadership roles.
The plan also says some areas of work will have to stop or be consolidated.
A voluntary exit scheme is identified as one option for reaching the desired size and shape of the organisation, subject to ministerial approval and trade-union engagement.
The policy is therefore moving beyond a temporary hiring restraint. The Government is planning the size and structure of the civil service several years ahead around an assumption of fewer staff and more concentrated priorities.
The First Year Has Changed the Remaining Calculation
The original workforce target implied a gradual reduction spread across five years.
The first year did not deliver that reduction at aggregate devolved-public-sector level.
Instead, NHS and local-government expansion outweighed reductions in colleges, selected public bodies and parts of the core administration.
The Fiscal Commission’s conclusion is consequently straightforward: if the 2029–30 endpoint remains unchanged, more of the reduction has now been pushed into the remaining years.
At the same time, Scotland’s public bodies are expected to produce £1.5 billion of efficiencies, absorb higher-than-planned pay costs, reorganise health boards and public bodies, extend shared services and automate administrative work while ministers continue to say frontline services will be protected.
The next measurable test comes with the Scottish Budget in December. The Fiscal Commission has asked the Government to publish an updated workforce path and clearer progress against the efficiency savings already built into current spending plans.
Without that updated profile, Scotland knows the intended destination — a smaller devolved public-sector workforce by 2029–30 — but not yet how much of the reduction will fall in each remaining year or which organisations will carry most of it.
Sources
The Scottish Government’s efficiency and workforce plans
Scottish Fiscal Commission, 30 September 2026
https://fiscalcommission.scot/30-september-2026-the-scottish-governments-efficiency-and-workforce-plans/
Public Sector Employment in Scotland Statistics for 2nd Quarter 2026
Scottish Government, 15 September 2026
https://www.gov.scot/publications/public-sector-employment-in-scotland-statistics-for-2nd-quarter-2026/
Public Sector Employment in Scotland Statistics for 1st Quarter 2026
Scottish Government, 18 June 2026
https://www.gov.scot/publications/public-sector-employment-in-scotland-statistics-for-1st-quarter-2026/
Public sector employment in Scotland: employment by organisation for 1st Quarter 2026
Scottish Government, 20 August 2026
https://www.gov.scot/publications/public-sector-employment-in-scotland-employment-by-organisation-for-1st-quarter-2026/
About public sector employment statistics: employment by organisation
Scottish Government, 20 August 2026
https://www.gov.scot/publications/about-public-sector-employment-by-organisation/
Scottish Government Workforce Statistics June 2026
Scottish Government, 15 September 2026
https://www.gov.scot/news/scottish-government-workforce-statistics-june-2026/
Scottish Spending Review 2026 — Annex B: Portfolio Efficiency and Reform Plans
Scottish Government, 13 January 2026
https://www.gov.scot/publications/scottish-spending-review-2026/pages/17/
Scottish Budget 2026 to 2027: Integrated Public Sector Pay and Workforce Policy
Scottish Government, January 2026
https://www.gov.scot/publications/scottish-budget-2026-2027-integrated-public-sector-pay-workforce-policy/
Fiscal Sustainability Delivery Plan
Scottish Government, June 2025
https://www.gov.scot/publications/scottish-governments-fiscal-sustainability-delivery-plan/
Serving Scotland: Our Five-Year Plan
Scottish Government, 25 August 2026; updated 22 September 2026
https://www.gov.scot/publications/serving-scotland-five-year-plan/
Question S7W-03085: Devolved Public Sector Workforce
Scottish Parliament, answered 24 September 2026
https://www.parliament.scot/chamber-and-committees/questions-and-answers
