Tackling inequality: guidance on making budget decisions

Informal guidance for policy makers on equality and human rights budgeting. The booklet challenges policy makers to systematically think through 6 key questions to identify ways in which budget decisions could be improved to advance human rights and address inequalities. Budget decisions include both those made about the money we spend and decisions about how revenue is raised.

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Question 3 How will your budget decisions impact upon different people and places?

Once you have a clear understanding of which groups of people or places have better and worse outcomes in the area that your budget is addressing (and why), you can then think about how your new policy and budgets will influence future outcomes for these people.

There are plenty of resources available to support detailed equality analysis in policy and resourcing decisions, and some of these are listed at the end of this booklet (see Annex B). Different approaches to equality budgeting will be useful in different contexts. Over time we hope to build up good practice case studies.

The first step is to undertake and publish an Equality Impact Assessment for any single new or revised policy or practice (including their associated budgets) and, on strategic decisions, a Fairer Scotland Duty assessment. These documents should set out the key challenges and inequalities that the policy and its associated budget need to address and the resultant decisions made. It should explain the short and long term financial impacts as well as the direct and indirect impacts. Over time it will be important to return to this analysis to show how the implementation of the policy is tackling inequality and, as a result, how budgets are changing.

Attempting to look at a whole organisational budget and at all angles of inequality at the same time is complex but necessary. You may find it helpful
to build your analysis in stages. For example you could:

1. Focus on one primary equality characteristic (and its intersectionalities) at a time, and compare the inequalities that you have identified from the evidence against the projected impacts of your budget. Are the policies and the budget appropriately tailored to tackle these inequalities? Is the revenue raising appropriate and the spend sufficient? If not, what changes will be made?

For example, if you are looking at gender, priorities might be to close gaps in employment participation, to improve work-life balance and to prevent violence against women.

2. Identify one large policy or service within your organisation or budget area and examine how the proposed budget for this area addresses the inequalities identified due to all the different equality characteristics, places and socio-economic disadvantage. As above, make sure that the approach is appropriately tailored and that the budget is sufficient in size to tackle these inequalities. An example template for this approach is provided in Annex C.

For example, if you are looking at employment then your policy and budget might aim particularly to help more minority ethnic women, disabled adults and Muslims into employment.

Building this evidence for your whole budget and for all equality characteristics, including socio-economic disadvantage, will give you a good understanding of how your overall budget is impacting on people and places in Scotland. This will allow you to make informed budget decisions.


Around 30% of Scottish Government revenue comes from income tax.

Income tax will impact directly on individual earners and household finances. It will also directly impact on the total amount of finance available to the Scottish Government to finance spending on public services, directly or through allocations to other public sector bodies. It therefore directly or indirectly impacts on every other central and local policy budget.

When setting income tax it is important to think about what the impact of this will be for people at all different income levels and different levels of socio-economic disadvantage. Part of understanding these different impacts is recognising and understanding that there are a variety of structural factors that affect people’s economic status and that these vary by protected characteristic. For example, women persistently earn less than men and households with even one disabled person living there tend to have lower incomes. It is important to think about the people who are eligible to pay tax, but also those who aren’t.

The income tax discussion paper was a good first attempt at setting out impacts of income taxes on those who would be due to pay. Later analysis has started to look more carefully at those who are not currently paying income tax.


Email: Gillian.Achurch@gov.scot

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