Scottish Budget 2019-2020: Equality and Fairer Scotland statement

Chapter 10 Communities and Local Government

Introduction

The Communities and Local Government portfolio aims to deliver better outcomes for people through the places in which they live, to engender community empowerment and participation, and to promote social justice.

This portfolio also incorporates the Scottish Government's funding for local authorities in Scotland, allowing them to deliver the full range of services, from education and social care to transport and planning.

Key Equalities of Outcome

This portfolio is primarily concerned with improving local communities and tackling poverty. Disabled people, including people with mental health conditions, and people from minority ethnic groups are more likely to live in poverty. Disabled people are also three times more likely to experience severe material deprivation. Women are more likely to experience severe material deprivation than men (16 per cent compared with 13 per cent). Wealth inequality is increasing, with single-adult households (which includes lone-parent families) accounting for the majority of those living in low wealth (60 per cent).

There are clear links between housing and inequality. People from minority ethnic groups, households with a disabled adult and lone parents are more likely to rent in the social or private sectors and live in deprived areas; whereas some groups, such as those who are older and/or identify as White Scottish, are more likely to own their home and live in more affluent communities. For example, 81 per cent of adults who owned their home identified as White Scottish compared with just 58 per cent of adults in the private rented sector who recorded their ethnicity as White Scottish.

Housing costs are a driver of poverty, especially among single adults and families with children. Poor housing conditions may also have a negative impact on people's health, wellbeing and life chances, especially for children. Similarly, those living in a deprived area or living in social housing are more at risk of exclusion from digital services.

Key Strategic Budget Priorities

This portfolio is at the heart of improving outcomes for all. Community-led solutions deliver projects and services specific to local needs and aspirations through collaborative partnerships and are the route through which improved economic, social and environmental outcomes can be achieved. Scottish Government funding through this portfolio also represents the vast majority of local authority income, paying for a wide range of services that are co-ordinated and delivered at a local level to meet locally agreed outcomes.

This portfolio aims to expand affordable housing by delivering more homes, the majority of which will be for social rent, as well as supporting home ownership. We will continue to improve the energy efficiency of homes, especially for those in fuel poverty, in support of our climate change targets. We will work to eradicate homelessness and rough sleeping, putting into action the recommendations from the Homelessness and Rough Sleeping Action Group.

This portfolio aims to promote social justice and tackle poverty. We will support a number of initiatives to reduce child poverty, such as encouraging parental employment and investing in innovative solutions. We will continue to develop sustainable solutions to food poverty and will do more to tackle food insecurity experienced by families. We will also expand access to free sanitary products for those who need them. We will continue to invest capital regeneration funds to deliver inclusive growth and create opportunities in disadvantaged communities.

Finally, this portfolio will invest in the third sector and social enterprise; working with communities to tackle tough social issues at source. We will work to provide the third sector with greater stability of funding and the opportunity for longer-term planning and development.

Equality Implications of the Scottish Budget 2019-20

Local Government and Public Services

Local government provides a wide range of services and plays a major role in local Community Planning Partnerships (CPPs) that are essential to the delivery of the outcomes that matter to the people of Scotland.

The funding provided by the Scottish Government represents the vast majority of local authorities' income, and is allocated using a needs-based formula. This methodology takes account of demographics, disadvantage and various other considerations and allocates resources based on relative need, including age, disability and levels of deprivation. However, each local authority decides how to spend its total available finances based on its understanding of local needs and priorities, guided by a set of national and local outcomes. The Equality Act 2010 and associated specific duties published in May 2012 provides a framework to help local authorities pay due regard to equality issues.

In addition, the Scottish Government will continue to work as part of the Open Government Partnership - a multilateral organisation of over 90 governments worldwide committed to openness, transparency and citizen participation - to increase the use of Participatory Budgeting which is recognised internationally as a way for local people to have a direct say in how and where public funds are spent. Our commitment in Programme for Government is to focus on, and strengthen, local decision making in ways that engage communities and improve outcomes. Supporting allocation of public money in this way is anticipated to ensure it is directed where it is needed most, impacting positively on equality outcomes.

Local government equality considerations focus on general expenditure by Scotland's 32 local authorities, funded through the local government settlement and policies around council tax, non-domestic rates and other locally-generated income. Other portfolios are responsible for assessing the impacts of any changes in grants that are ring-fenced for spending on a particular type of activity.

In 2019-20, the Scottish Government will continue to support spending on health and social care by providing £355 million from the NHS Boards to Integration Authorities. Within the overall local government finance settlement total, an additional £40 million is included to support a range of financial pressures facing local authorities in 2019-20. These include support for the continued implementation of the Carers (Scotland) Act 2016, and extending free personal care to under 65s as set out in the Programme for Government. This funding will be supplemented by a further £120 million for social care that will be transferred to the local government settlement in-year and paid directly to local authorities for investment in integration. This includes £12 million for investment in school counselling services.

£88 million will continue to be made available to local authorities to support both maintaining the national pupil/teacher ratio at national levels, and ensuring places are provided for all probationers who require one under the teacher induction scheme.

In addition, £120 million of Pupil Equity Funding will continue in 2019-20 as part of the local government settlement. Money from the Attainment Scotland Fund will continue to provide authorities and schools with additional means to provide targeted literacy, numeracy and health and wellbeing support for children and young people in greatest need.

The Scottish Government will also allocate an additional £210 million revenue and £25 million of capital funding to local authorities in 2019-20 to support the expansion in funded Early Learning and Childcare (ELC) entitlement to 1,140 hours from August 2020. The ELC funding will create additional capacity in ELC settings, support the increase to the ELC workforce and provide additional training opportunities for existing staff, ensuring a high-quality ELC service that provides every child with the best possible start in life.

The Scottish Government believes that the package of measures set out in the Scottish Budget provides local authorities with the necessary resources and fiscal flexibility that they need to protect key priorities around investment in education and health and social care.

The Scottish Government's reforms to Council Tax, introduced from April 2017, make local taxation fairer by reducing the amount lower banded properties pay, as a proportion of property value, relative to households in bands E to H. The Council Tax Reduction Scheme will continue to ensure that low income households are not required to meet Council Tax liabilities they cannot afford.

In 2017-18, a 25 per cent increase in the child allowance of this relief benefited up to 77,000 households. This relief is being maintained in 2019-20. The Scottish Government has not introduced the two child cap (which now applies to many UK benefits) to the scheme, and has excluded income and lump-sum payments made under the new Bereavement Support Payment.

From April 2018, to support care-experienced young adults as they adapt to life in independent accommodation, we have made all care leavers exempt from Council Tax.

The Local Government portfolio includes overall policy for non-domestic rates, including the small business bonus scheme. As this generally relates to taxes on businesses, it is not straightforward to identify direct equality impacts; however, they are an important part of the Scottish Government's commitment to driving economic recovery.

Housing

The Scottish Government's More Homes Scotland approach supports our bold and ambitious target to deliver at least 50,000 affordable homes over the five years to March 2021, backed with investment of over £3 billion. Based on the most recently published multiplier, this investment is estimated to support between 10,000 and 12,000 full-time equivalent jobs in the construction and related industries in Scotland, leveraging economic output in the region of £1.4 billion per year.

We are also committed to preserving and expanding our social housing stock as part of creating a fairer society, and 70 per cent of the 50,000 affordable homes target will be for social rent. The social rented sector is a particularly important tenure for lone parent households and long-term sick and disabled people among others. The lower rents in this sector play an important role in protecting the after-housing costs income of lower income households. There will continue to be a correspondingly higher proportion of capital grant funding (rather than loan funding) of £685 million in 2019-20 to reflect this need for social rented housing. In addition to supporting Housing for Varying Needs, we will also provide support for the construction of purpose-built wheelchair housing for disabled people, where local authorities have identified this as a priority.

The Places for People (PfP) scheme, which aims to deliver 1,000 affordable mid-market rent homes across Scotland, is being supported by loan funding of £47.5 million. This will help to create a public/private funding platform of around £150 million. The Mid Market Rent (MMR) Fund was launched on 19 June 2018. Equalities duties will be subject to regular review as part of the reporting process by PfP to the Scottish Government. PfP have committed to meeting the following equalities duties; eliminating unlawful discrimination, advancing equality of opportunity and encouraging and fostering good relations between people who share a protected characteristic and those who do not. These duties will be met through acquisition policy and allocation of tenancies, and will be reviewed regularly.

We will continue to support people to purchase their own house with the support of an equity stake from the Scottish Government. This includes ongoing funding of £80 million for the Open Market Shared Equity (OMSE) Scheme in 2019-20. OMSE is available to help all first-time buyers - who tend to be younger than existing home-movers, with around three quarters of OMSE purchasers aged 35 or under - and priority access to the scheme is given to those who may otherwise be disadvantaged in accessing home ownership. The OMSE priority groups include disabled people, older people (those aged 60 and over), armed forces personnel and those currently living in the social rented sector. Marketing activity is targeted at these groups including newsletter articles, attendance at conferences and media advertising, as well as working closely with local authorities, and there has been a general increase in the number of applications overall.

The Help to Buy (Scotland): Affordable New Build and Smaller Developers Schemes also provide shared equity to people looking to own a new home and a total of £50 million will be available for these schemes each year until 2021. Since October 2017, the Help to Buy (Scotland) has provided additional support for older people by removing the requirement for those aged over 60 to take out a mortgage. As older people often find it more difficult than other groups to secure a mortgage, removing this requirement will allow them to access the scheme more easily and increase their chances of finding a home suitable for their needs. Since the launch there have only been a handful of applications from this group, the majority of which resulted in sales.

We have made more than £116 million available for fuel poverty and domestic energy efficiency during 2018-19. In 2019-20, the overall budget has been maintained at £116 million. Within this, we are continuing partnerships with related energy funding programmes to support Energy Efficient Scotland pilots and meet the commitment in the 2016 Programme for Government to provide £0.5 billion for energy efficiency over four years.

Some key equality groups are more likely than other groups to experience fuel poverty at present (41 per cent of older households and 87 per cent of households with weekly income of less than £200 were in fuel poverty in 2016^[1]). The eligibility criteria for Warmer Homes Scotland has been particularly designed to target help at people in receipt of certain benefits, including older people and disabled people. We expect to help around 3,500 households through preservation of funding for this scheme to make their house warmer and more comfortable by installing a range of energy-saving measures.

Scottish Government funding for Home Energy Scotland (HES) has been maintained for 2019-20, enabling continuing links with national partners targeting groups experiencing or at risk of fuel poverty, including older people and disabled people. We will continue to fund the HES Homecare scheme that provides face-to-face advice for people with health conditions affected by cold weather and damp in two rural areas: Moray, and Annandale and Eskdale.

During 2019-20, funding provided to Registered Social Landlords to carry out housing adaptations that will help older and disabled tenants live safely and independently at home will be maintained at £10 million.

Homelessness disproportionately affects young people: 58 per cent of homelessness applicants were aged 34 or under in 2017-18. Other groups are also particularly at risk of homelessness: women aged 34 and under, households with children, lone parents (the majority of whom are women) and people with at least one support need (such as a mental health condition, physical impairment or learning disability). We have created an Ending Homelessness Together Fund of £50 million over 2018-23 to support prevention initiatives and to support our objectives of eradicating rough sleeping, transforming temporary accommodation and ending homelessness.

The Housing Voluntary Grant Scheme funding has been maintained, providing funding to national voluntary housing and homelessness organisations to help vulnerable people and to provide training to those that provide these services. The bids received are assessed on the basis of the approach taken to consideration of equality issues (among other criteria). Groups who benefit include homeless people and those at risk of homelessness, disabled people, older people, refugees, asylum seekers and minority ethnic communities, as well as women and children who are victims of domestic abuse.

Regeneration

We will continue to invest in regeneration activity to help build physically, economically and socially sustainable communities. Regeneration activities are targeted at Scotland's most disadvantaged and fragile areas. Deprived areas tend to have a higher than average proportion of residents from some minority ethnic groups (African and Caribbean or Black) and people who are disabled, so investment in regeneration activity may especially benefit these groups. There is also evidence that children living in areas of deprivation perform less well than the general school population, and so investment in regeneration could also have indirect benefits in closing the attainment gap for these children.

Specific regeneration activity includes the delivery of our annual Regeneration Capital Grant Fund (RCGF) in partnership with local government. In 2019-20 RCGF will be maintained and we will continue to support regeneration through the SPRUCE infrastructure investment loan fund, the Vacant and Derelict Land Fund and through our sponsorship of Clyde Gateway.

We believe strongly in supporting communities to tackle poverty on their own terms. Through our Empowering Communities Fund of £20 million (£4 million of which comes from the Health and Sport portfolio), we are supporting over 300 community organisations to deliver locally identified priorities to tackle poverty and inequality in a responsive way. The fund impacts on thousands of lives across the country, supporting community-led approaches (including money advice, childcare, training and upskilling, healthy eating initiatives and volunteering opportunities).

Scottish Government is extending its match funding of the European Social Fund Programme for another year in 2019-20 - totalling £35.3 million over three years (previously £29 million over two years) - through the Aspiring Communities Fund, Social Economy Growth Fund and Social Innovation Fund. These funds are helping third sector, community bodies and social economy organisations deliver long-term local solutions that address local priorities and needs to reduce poverty, enable inclusive growth and promote social inclusion. The Social Innovation Fund aims to stimulate and test new and innovative approaches to tackle poverty and inequality, supporting partnerships between third sector, academia and other agencies.

Social Justice

We know that some protected characteristics have a much higher risk of poverty, including minority ethnic households and households with a disabled adult or child. There is also strong evidence that poverty and gender are inextricably linked, for example, in inequalities in earnings and access to other resources. Young mothers and lone parents (the majority of whom are women) are other groups with a high risk of poverty. New data also shows that younger people, households with children and those with a limiting long-term illness are at higher risk of food insecurity.

Building a fairer and more equal country is at the heart of the Scottish Government's ambitions, and the Social Justice budget is key to this. In 2019-20, the Social Justice budget is £25 million, a decrease of £2.5 million (from £27.5 million in 2018-19). Additional evidence has been generated throughout 2018-19 on need, costs and routes to deliver access to free sanitary products, resulting in a decrease in planned expenditure in this area while at the same time scaling up our ambitions. This budget invests in key priorities emerging from 'Every Child, Every Chance', the first Tackling Child Poverty Delivery Plan and in taking forward the Fairer Scotland Action Plan. It also continues to support work to reduce poverty and maximise household incomes, and makes substantial investments to tackle inequalities, including in resource for affordable credit and to extend access to free sanitary products.

Every Child, Every Chance, published in March 2018, set out a range of new policies and proposals to help make progress towards the targets in the Child Poverty (Scotland) Act 2017. Details of the equalities impact of the Scottish Budget 2019-20 on the drivers of child poverty are provided in Chapter 6 - Child Poverty Overview.

Third Sector

Scotland has a strong and dynamic third sector, which plays a crucial role in the drive for social justice and inclusive economic growth. It is also essential to the reform of public services and to the wellbeing of our communities. The sector plays a vital role in helping to advance equality, and in supporting communities most impacted by discrimination and disadvantage. The third sector budget of £24.0 million (excluding Total Operating Costs) for 2019-20 is complemented by other funding to the third sector across portfolio budgets.

£15.7 million of this budget helps to support third sector organisations in their work with individuals and communities across Scotland. Many of these organisations work closely with communities of interest and of place to tackle inequality and tough social issues at source, recognising that poverty and economic disadvantage are more prevalent among some protected characteristic groups. The Scottish Budget 2019-20 will also support work to provide the third sector with greater funding stability and the opportunity for longer-term planning and development of its role in supporting communities and tackling inequality.

We are ambitious in our plans to realise our vision for volunteering and the role volunteers can play in shaping the lives of their communities. However, volunteers are more likely to be women, from rural areas and from less deprived areas. There is an underrepresentation of disadvantaged groups, including people from the most deprived areas and disabled people. We are maintaining our investment through the Volunteering Support Fund to support third sector organisations to engage with those who experience disadvantage or who face barriers to volunteering participation. Investment will also support the development and delivery of the National Volunteering Outcomes Framework that will set out a coherent and compelling vision for volunteering and identify the key evidence and data to drive an increase in participation for all.

Investment of £8.0 million will help to deliver on the co-produced ten year social enterprise strategy by implementing the 92 specific actions identified by 'building a Sustainable Social Enterprise Sector in Scotland: 2017-2020'. It will also help to realise the full potential of the innovative social enterprise sector where profits made are reinvested into specific social objectives, for example, delivering local community projects or services, creating employment for disadvantaged people or protecting the environment. Recognising the third sector's important role in addressing poverty and disadvantage, we will use the European Social Fund programme, matched by our own resources, to invest in and strengthen Scotland's social economy. This will enable organisations to do even more to transform the lives of disadvantaged individuals and families.

We will continue to work with Scotland's Credit Unions as they carry out their vital role in providing affordable lending and savings in the heart of communities, protecting people from predatory lenders and unmanageable debt.

Conclusion

Overall, the Communities and Local Government portfolio budget has the potential for significant positive impacts for equality groups, as well as to mitigate against existing inequalities. Local authority budgets continue to offer resource and fiscal flexibility, as well as reflecting key priorities of health and social care and educational attainment. Spend on affordable housing programmes has been maintained, along with commitments to provide more housing for social rent. Third sector and regeneration spend has been protected on the whole, along with social justice funding, ensuring that organisations in the field can continue to tackle poverty and remove barriers for equality groups.

Footnotes

1. Fuel poverty rates for 2017 will be published 4 December 2018.