Scottish businesses prioritize business rates reform ahead of budget

The third quarter 2026 report from the Scottish Business Monitor, compiled by the University of Strathclyde’s Fraser of Allander Institute, indicates that reforming business rates is the primary priority for Scottish firms ahead of the upcoming budget. Approximately 34% of surveyed companies identified business rates as their top concern, followed by skills and training (14%) and income tax (12%).

The report highlights a deteriorating relationship between the private sector and the Scottish Government. Roughly 69% of firms believe the government lacks an understanding of the business environment, while 71% feel that ministers do not engage effectively on policy. Despite this, there was a slight improvement in policy influence, with 22% of firms reporting an effective route to influence government policy, up from 14% the previous year.

While business activity showed improvement—with sales returning to positive territory for the first time since mid-2024—uncertainty remains high. 99% of firms cited economic and business uncertainty as a major concern, and 93% noted political uncertainty. Cost pressures persist, with 82% of firms reporting higher total costs, driven largely by employee expenses, while energy is expected to be a future driver of cost increases.