The Scottish Government’s Programme for Government 2026-31 includes a number of commitments that could affect builders and construction SMEs, from housing delivery and retrofit to procurement and public-sector work.
Published by First Minister John Swinney on 1 September 2026, the programme sets out the Government’s priorities for the current parliamentary session. Here, we look at four key areas for builders and the wider construction industry, some of which overlap with what we set out in our Builders’ Manifesto for Scotland.
1. Housing
There is a chronic undersupply of new homes in Scotland with a range of factors contributing to the decline of housing starts and completions over the last couple of years. The headline housing commitments announced are:
- Deliver 110,000 affordable homes by 2032, with at least 70% for social rent and 10% in rural and island communities.
- A nearer-term target of 36,000 affordable homes to be delivered during this five-year Parliament.
- Total investment of up to £4.9 billion, including £4.1 billion of public funding, to support housing delivery.
- A new delivery body, More Homes Scotland, becoming operational from 1 April 2027, intended to coordinate housing funding, expertise and delivery.
- A strategic partnership between More Homes Scotland and the Scottish National Investment Bank, aimed at attracting private and pension-fund capital across social, affordable, Build to Rent and private housing.
What to watch
The housebuilding targets should be viewed as aspirational: helping to shape budget lines and grants rather than generating pipelines of work. There is the ambition for More Homes Scotland and the Scottish National Investment Bank to attract private capital. This to stimulate more house building across all tenures. So, builders anticipating public or private capital flows into housing should note these are at an early stage. The intention is there but firm funded commitments are not.
2. Heat energy efficiency and retrofit
A Buildings (Heating and Energy Performance) and Heat Networks (Scotland) Bill is in year one of the Government’s programme. This Bill represents an opportunity for the FMB to engage with government on retrofit standards, compliance, and contractors’ capacity to deliver fabric and energy retrofit upgrades to Scotland’s homes and buildings.
There is also:
- Support for clean heating and energy-efficiency measures across approximately 100,000 properties.
- Continued scale-up of heat networks.
- A target to decarbonise heat in buildings by 2045.
Why is this important?
It will be local builders and installers that will manage and deliver most of the energy efficiency and retrofit works. This marketplace is one to watch if you solely deliver repair, maintenance and improvement (RMI) works rather than new build.
3. Procurement
The Community Wealth Building (Scotland) Act is to be implemented. There’s the aim for procurement to be used to increase economic and social benefit. So local and regional building firms may benefit from this intent. However, what this will mean in practice will depend on the forthcoming Procurement Bill consultation, which the FMB will be keeping an eye on.
4. A note of caution
The Scottish Government will be restructuring public bodies and local government through the Public Service Reform Bill. The replacement of Scotland's 14 territorial NHS boards with two strategic boards being the most notable announcement.
What makes this relevant for building firms?
It creates uncertainty for contractors delivering construction services for Scotland’s health boards and local authorities. Quite who will be commissioning and managing future construction contracts here is unknown. So, if your business is partly or wholly exposed to public-sector-facing pipelines you should monitor how these bodies evolve.
Finally planning and consenting reform is in there too. This is still two to three years away though. As is the commitment to reduce business bureaucracy and apply the Government's ‘Better Regulation’ principles. The FMB will continue to engage with policy makers in Scotland and we will update members on key developments relevant for builders and the construction sector.
Authors
Gordon Nelson
Director, Federation of Master Builders Scotland
