Chapter 1 Strategic Introduction 2020-21
The Scottish Budget aims to achieve a national vision of wellbeing, as encapsulated in the National Performance Framework, with a tight financial envelope. It aims to target spend over time to eliminate discrimination, advance equality of opportunity, foster good relations and embed human rights. In practice this means reducing measurable differences in outcomes by protected characteristics (age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation) and by socio-economic disadvantage (low income or wealth; deprivation in area, material resources or background) when compared with the rest of the population. It also means ensuring that human rights are progressively realised.
The Scottish Government recognises that embedding equality, human rights and Fairer Scotland duties in policy and action can be transformative.
This year's Equality and Fairer Scotland Budget Statement (EFSBS), acknowledging the close connections between the protected characteristics and socio-economic disadvantage, sets out how the Scottish Budget 2020-21 invests in the physical and social infrastructure required for a strong, sustainable, innovative and inclusive economy. This approach, when combined with the provision of high quality universal services, progressive taxation and a clear focus on tackling the climate emergency and child poverty, means that the Scottish Budget continues to represent a strong social contract between the Scottish Government and the people of Scotland.
Strategic Context To The Budget
The 2020-21 Scottish Budget sets out in detail the strategic context for this year's budget. It comprises strategic funding decisions to enact policies that may affect many disadvantaged groups and individuals, directly or indirectly, and comes at a time of political and financial uncertainty both in terms of the broader UK economy and the settlement for Scotland, which will not be announced until the UK Budget in March 2020. To avoid repetition this has not been set out here, but from an inequality perspective it is necessary to identify three important factors.
Responding to the UK's exit from the EU – The negotiations on a continued trade and wider relationship with Europe and the rest of the world provides a very difficult, incoherent and uncertain context in which to plan a future for Scotland. Election results for Scotland again showed a clear majority in favour of remaining in the European Union (EU) and recent analysis has estimated that the damage caused to the Scottish economy by the Withdrawal Agreement will be significant. Preliminary spatial analysis has shown that the risks presented by EU exit are anticipated to have significant social and economic consequence for all areas of Scotland with many of the most vulnerable communities being in rural locations. Analysis of the social impacts of EU exit have also identified far-reaching consequences across protected characteristics and for socio-economically disadvantaged people.
The Public Sector Equality Duty (PSED) requires public authorities (including the Scottish Government) to have due regard to the need to: eliminate discrimination, harassment, victimisation; advance equality of opportunity; and foster good relations between persons who share a relevant protected characteristic and persons who do not.
The Fairer Scotland Duty (FSD) arises from Part 1 of the Equality Act 2010 and came into force in Scotland from 1 April 2018. It sits alongside the PSED, and places a legal responsibility on the Scottish Government and other public bodies to consider actively how decisions can reduce inequalities of outcome caused by socio-economic disadvantage. This consideration should be informed by evidence of inequalities and the potential impacts of decisions upon disadvantaged groups.
The norms and standards contained in international human rights treaties guarantee equality and obligate governments not to discriminate against groups or individuals. With regard to the Scottish Budget this means:
1. Revenue-raising policy has differential impacts on different populations. Revenue must be raised in a way that does not discriminate against any specific group on the grounds of protected characteristics or income (unless justification for the differentiation is reasonable and objective).
2. Allocations and expenditures must not be discriminatory and should be implemented in such a way as to enhance equality.
3. The budget process and documentation should be transparent – allowing people to engage with, and understand, the budget.
Responding to UK financial and political challenges – The UK Government's past commitment to austerity, welfare reform and tax cuts for higher income households have provided a difficult backdrop for a number of Scottish Budgets. Over a million people in Scotland currently live in relative poverty after housing costs, including one in four children. Rises in poverty have been firmly linked to these welfare changes with rising in-work poverty linked to a UK political economy which accommodates precarious and low paid work. Income inequality in Scotland also rose in the period 2015-18, with the top 10% of the population now having 27% more income than the bottom 40% combined. Against this backdrop, the Scottish Government is committed to building a country which is both more prosperous and more equal. In 2018-19 we invested over £1.4 billion in support targeted at low-income families, which includes over £100 million to mitigate impacts of UK welfare cuts. In this budget we continue our progressive tax plans, prioritising spend to mitigate some of the worst impacts of welfare reform and continuing to promote fair work and fair pay.
Continued leadership in approach – At the beginning of this parliamentary session, the First Minister set out a commitment to equality of opportunity, fulfilling rights and tackling inequalities. This has been a strong theme throughout the parliamentary session. Establishing, encouraging and responding to the First Minister's Advisory Council for Women and Girls and the First Minister's Advisory Group on Human Rights Leadership has built on this commitment, with both groups offering consistent challenge to government.
This year there will be further work to embed equality and human rights across the public sector. This is set out in detail in the Social Security and Older People chapter but in summary this will include a review of the Public Sector Equality Duty to improve practice and understanding around equality impact assessments; continued work to use the Fairer Scotland Duty assessments to maximise the positive impact of all strategic decisions on people and places experiencing socio-economic disadvantage; further work to deliver against the 'Race Equality Action Plan', the 'British Sign Language (BSL) Action Plan' and the 'Fairer Scotland for Disabled People Delivery Plan' as well as participation in a gender equality beacon collaborative and continued work with the lesbian, gay, bisexual and transgender communities.
Tackling Child Poverty
Living in poverty, or in less favourable social and economic circumstances than others in the same society, is associated with a wide range of adverse outcomes. In 2017 the Scottish Parliament unanimously agreed to ambitious targets to tackle child poverty and in March 2018 'Every Child Every Chance', the first Tackling Child Poverty Delivery Plan, set out the actions that the Scottish Government would take in 2018-22 to deliver progress on these ambitions.
The 2020-21 Budget continues to take forward an ambitious range of actions to tackle poverty and reduce inequality by impacting on the three drivers of child poverty. On the income from employment driver we commit funding to a continued focus on employability and fair work including specific schemes for parents. We also commit funding to improved skills for school leavers and work progression, and policies to enable parents to work if they choose to do so through provision of early learning and childcare places and developing appropriate transport strategies. On costs of living there is continued funding to increase provision of affordable housing, tackle fuel poverty, reduce childcare costs through funded early learning and childcare, tackle food insecurity, and reduce the cost of the school day. And in relation to income from Social Security there is the 'game-changer' Scottish Child Payment alongside a range of other payments which are likely to impact on low-income households with children.
In June 2019, the annual report on tackling child poverty showed that around £527 million was spent by Scottish Government in 2018-19 on children in poverty. This figure will be analysed and updated for the 2019-20 financial year in the next annual report on child poverty due by the end of June 2020. Providing figures in the child poverty, report in June allows the use of accurate, settled and transparent spend figures from the previous financial year alongside appropriate details of policies and programmes.
Tackling the Climate Emergency
Scotland's world-leading climate change legislation sets a target date for net-zero emissions of all greenhouse gases by 2045. This year's Programme for Government backed this with a range of actions that Scotland will take to transition to net-zero and end their contribution to global climate change. The recently established Climate Emergency Response Group (CERG) already shows the sort of collaboration across public, private, third sector and diverse communities that will be needed to be successful in this aim. The Scottish Government is resolute that the transition to net-zero needs to be just and that no one is left behind. A Just Transition Commission has been established to advise Scottish Ministers on how to apply Just Transition principles to Scotland. The impact of the 2020-21 Budget on tackling climate change has been set out in the accompanying Carbon Statement.
The EFSBS is a supporting document to the Scottish Budget 2020-21 and should be read alongside the rest of the budget reports and tables.
The first three chapters of this year's statement provide a strategic overview. This includes an introduction to the EFSBS (Chapter 1); an overview of equality budgeting and Fairer Scotland assessments (Chapter 2); and an overview of Scottish Government as an employer (Chapter 3). The remainder of the statement provides a summary chapter for each of the 12 Ministerial portfolios. These outline how consideration under the PSED and FSD of evidence around inequality has informed the budget decisions reached in each portfolio.
The Scottish Government changed to a new model for administration costs last year. All budget lines for 2019-20 and for 2020-21 include the Total Operating Costs (including staff resource).
Alongside the Scottish Budget 2020-21 and the EFSBS, there will be a separately published distributional analysis of income tax changes across income groups and with respect to protected characteristics.
5. Background briefing paper on human rights budgeting and budget analysis by Ann Blyberg for the Scottish Human Rights Commission.