Public service reform strategy: impact assessments

Equality Impact Assessment

1.1 Summary of aims and desired outcomes of Policy:

The vision for the PSR Strategy is:

A Scotland where everyone has access to services that are efficient, good quality and effective.

For most people, this will mean you can access the everyday services you need, with the confidence that public money is spent wisely and with clarity on how well services are performing.

For people who need more support, particularly those experiencing disadvantage, public services will come to you. These services will be person-centred, accessible and you will not be required or expected to navigate different organisations or complex systems.

For communities, this will mean shaping local places, with public services organisations sharing power and resources with you to deliver what is needed for individual communities.

For public service staff, you will be empowered to provide tailored support, and be trusted to work with people to deliver beyond organisational boundaries to best support the person or family in front of you.

For public service leaders, this will mean you lead as part of a collective, shaping a system that puts people, communities and places at its heart to meet their needs and maximise public value and ensure fiscal sustainability. Beyond leading your own organisation and sector, you will work collaboratively, forging partnerships that drive lasting change, address root causes and provide support early to avoid long-term, complex and expensive interventions later, rising above individual, organisational and sectoral interests.

We will achieve this through a focus on three pillars: preventative services, joined up services, and efficient services.

1.2 Executive summary

The PSR strategy focusses on tackling system-wide issues that must be addressed, and barriers that must be removed, to enable our vision (outlined above) to be achieved. This means creating a system that is collaborative and integrated by default.

We have set out that the system should be preventative, joined up and efficient in order to improve lives, reduce inequality and ensure fiscal sustainability. This forms the three pillars of the strategy: preventative services, joined up services, and efficient services.

The evidence below demonstrates that inequality is often experienced as poverty and that numerous protected characteristics are over-represented in facing disadvantage.

In particular the following are key features in the relationship between poverty and inequality:

• Research reveals evidence of poverty persistence, poverty traps, and recurrent episodes of poverty^[1]. This indicates that individuals who fall into poverty are likely to remain there for extended periods or experience repeated stretches of poverty.
• Public services can shape the relationship between economic inequality and poverty^[2]. The quantity and quality of available resources and services available to tackle poverty are crucial in mitigating the effects of inequality.
• Inequality can lead to social exclusion, where marginalized groups have limited access to essential services and opportunities, further embedding poverty.²
• Through life, individuals can accumulate advantages or disadvantages based on their socioeconomic status, which can increase inequality and poverty.

PSR is about reducing inequalities of outcome, in all experiences of services including transactional and intensive, and this is clear in each pillar:

Changing our system to intervene early to prevent poor outcomes at population level. The root cause of that preventable demand is often poverty and inequality

Improving services, particularly for those facing most disadvantage

Protecting existing services through improving efficiency of the public services system. Those experiencing inequality are more likely to be more reliant on public services.

While this initial assessment sets out the overarching implications of the strategy, subsequent impact assessments will be undertaken, as necessary, for individual workstreams throughout implementation. This iterative and responsive process will ensure that the execution of the strategy considers the distinct requirements and challenges encountered by protected groups.

1.3 Background

The strategy identifies the following indicators of the need for reform:

• Despite increased investment^[3], people’s satisfaction with public services is declining^[4]
• Services can be confusing, help can be hard to access, and basic provision can feel stretched
• There is unnecessary and unhelpful duplication in the system, including multiple providers of similar services and service users repeatedly having to provide the same information to different public sector bodies.

Colleagues across public services have told us:

• Those working on the front line can feel constrained in their ability to act to support people
• As organisations, we have the capability but not always the will to act differently and remove duplication and complexity
• Despite the importance of prevention, we have not moved the dial sufficiently to prevent damaging experiences and reduce the risk of future need that leads to expensive demand for public services

The strategy focusses on tackling system-wide issues that must be addressed, and barriers that must be removed, to enable our vision to be achieved. This means creating a system that is collaborative and integrated by default.

We will deliver a system that improves lives, reduces inequality and is fiscally sustainable. That means the public services system will:

• Be efficient and effective with the right-size delivery landscape
• Better join up services and focus on helping people
• Prioritise prevention
• Empower people and communities to shape the services that matter to them
• Be fiscally sustainable

The strategy sets out a framework across foundations and three pillars for how this will be achieved, including workstreams and existing programmes.

Foundations

The strategy also sets out workstreams that form the foundations - or core enabling elements and actions - that must be in place for reform to take place.

Workstreams include:

• Leadership and culture
• Empowering places and communities
• Accountability and incentives
• Ensuring the right delivery landscape

Pillar 1: Prevention

Prevention is about intervening early to make long-term change to improve lives – this means stopping the establishment (or escalation) of problems that lead to negative outcomes for people. This pillar is focussed on changing how the system operates to invest in the most impactful preventative approaches. Across both the ‘foundations’ commitments and the workstreams under this pillar we will address the barriers to creating a truly preventative system.

Workstreams under this pillar:

• Understanding and mitigating demand drivers
• Preventative Budgeting

Pillar 2: Joined up Services

Much of the activity to improve services must be delivered within service areas (but across organisations). This means focussing on improving access, speeding up flow through the system and improving the experience for those services on which we all rely. This pillar particularly focusses on changing our model of service delivery, particularly for people with the greatest disadvantage or facing the most complex circumstances, to provide person-centred services.

Workstreams under this pillar:

• Simplification
• Local integration: strengthening Community Planning and realising the potential of the third sector
• Data sharing and data usage
• Digital public services

Pillar 3: Efficient Services

There is a wide range of activity within Scottish Government to drive efficiencies within Government and across the public sector. Together these support the drive to continuously improve and bring down the cost of delivery. However, we want to go further in bringing these individual workstreams together into a comprehensive programme and to focus on system efficiency (rather than individual organisation efficiency). That means initiating new workstreams and working more closely with public bodies as key colleagues and partners in driving efficiency.

Workstreams under this pillar:

• Data collection
• Workforce
• Digital skills and resource
• Shared services
• Scaling Intelligent Automation
• Expansion of National Collaborative procurement
• Commercial value for money
• Scottish Single Estate

As part of the efficiency pillar, the strategy sets a target to reduce annualised Scottish Government and public body corporate costs by £1 billion over 5 years. This will be achieved through all the workstreams of the pillar, including changes to workforce.

1.4 The Scope of the EQIA

The PSR Strategy focusses on fiscal sustainability and improving outcomes for all users of services through a series of workstreams. It has been set out at a population level with broad principles and priorities, however, certain communities and groups may experience the effect of the strategy differently. We are committed to ensuring the PSR is targeted to achieve the greatest impact whilst mitigating any potential adverse impacts. As an overarching strategy, we are committed to further impact assessments across all workstreams and programmes as and when appropriate to ensure reform continues to address inequalities.

Tackling demand for certain services is at the core of the strategy. At this initial stage, this document therefore focuses on the experience of inequality through poverty, as those currently experiencing poor outcomes and disadvantage centres around poverty which is a driver for demand of services through the following aspects:

• Healthcare Costs: Poverty is associated with poorer health outcomes, leading to higher healthcare costs. Individuals in poverty are more likely to suffer from chronic conditions and mental health issues, which require frequent medical attention.^[5]
• Social Services: The demand for social services such as housing support, unemployment benefits, and food assistance programs is higher among those living in poverty. These services require significant funding from the state.³
• Education and Employment: Children from disadvantaged backgrounds often face educational difficulties, leading to lower educational attainment and reduced employment opportunities. This results in higher costs for remedial education and job training programs.^[6]
• Crime and Justice: Poverty is linked to higher crime rates, which can increase costs related to policing, legal proceedings, and incarceration.³
• Economic Productivity: Poverty can reduce overall economic productivity. Individuals in poverty may contribute less to the economy due to lower employment rates and reduced consumer spending.⁴
• Long-term Effects: The cost of living crisis has left a legacy of higher household debt, public and third sector services under significant strain, increased inequality, and poorer mental and physical health.^[7]

The document sets out, on the basis of evidence, key ways in which inequalities could be impacted by the PSR Strategy. Workstreams within the Strategy will be subject individually to the Public Sector Equality Duty and dedicated assessments of their particular impacts on inequalities for groups with protected characteristics will be carried out as those policies are developed.

We will also review this overarching impact assessment annually to ensure it remains up to date and an accurate reflection of reform as it progresses. This will include a review of the cumulative impact of each pillar of the strategy, in particular, reviewing the impact of the £1bn target in the efficiency pillar. We recognise that individual workstreams which will contribute to this pillar have the potential for negative equalities impacts in some cases, and we will we ensure that these are assessed both individually and cumulatively.

1.5 Key Findings

Initial scoping of inequalities resulting from poverty facing each demographic group has been carried out.

Age

Approximately 24% of children in Scotland are currently living in poverty (2020-2023) and around 21% of working-age adults are living in poverty (2020-2023).^[8] Households with children are particularly affected by poverty - in these households, 60% of working-age adults in poverty and 70% of children in poverty are living in a household where someone is in paid work (2020-2023).^[9]

Older adults make up a large proportion of social care recipients. Currently, around 77% of people receiving social care support are aged 65 and over (2020/21). ^[10]However, there has been a downward trend in the number of older adults receiving social care packages. There has been a 4.1% decrease in the number of individuals aged 65 and over receiving social care compared to pre-pandemic levels (2022/23).^[11]

Disability

Disabled people are more likely to live in poverty compared to non-disabled people. In Scotland, around 28% of disabled people were living in poverty after housing costs (2021-2024).^[12] Disabled individuals face higher living costs, which can exacerbate poverty. On average, disabled adults face additional costs of over £1,000 per month.

Disabled people are less likely to be employed, and those who are employed often earn less. On average, a disabled worker earns nearly £4,000 less per year than a non-disabled worker. ^[13]Many disabled people rely on social security benefits, which can be inadequate to cover their additional costs. Two-thirds of people who use foodbanks have issues with their benefits, and many of these households include a disabled person.

Sex

Women in Scotland are more likely to live in poverty compared to men.^[14] In 2021-24, 23% of children and 20% of working-age adults were living in relative poverty after housing costs.^[15] Single working-age women face higher poverty rates compared to their male counterparts. Women pensioners also experience higher rates of poverty compared to men. Households headed by women, especially single mothers, are more likely to be living in poverty.

Pregnancy and maternity

Children from households with a mother aged under 25 have particularly high relative and absolute poverty rates.^[16] This is often due to factors such as less labour market experience and interruptions to education, which can limit their earning potential and financial stability.

Single-parent households, particularly those headed by women, are more likely to experience poverty. In Scotland, single mothers face significant financial challenges, contributing to higher poverty rates. The economic pressures on single mothers are often compounded by the need to balance childcare responsibilities with work. The poverty rate for children in households with young mothers is higher than the national average.

Gender reassignment

Transgender individuals often face significant economic challenges. Discrimination in employment can lead to higher unemployment rates and lower incomes, making it difficult for transgender individuals to achieve financial stability. Transgender individuals may have higher needs for mental health and social services, which can be costly and contribute to financial strain.^[17] Transgender people are at higher risk of homelessness and housing instability, which is closely linked to poverty.^[18]

Sexual orientation

In 2021-24, around 28% of adults identifying as lesbian, gay, bisexual, or other (LGB+) were living in poverty, compared to 19% of heterosexual adults.^[19]

Nearly 1 in 4 (23%) respondents who identified as gay, lesbian, or bisexual reported experiencing discrimination.^[20] Discrimination and harassment can have significant impacts on the economic well-being of individuals, leading to challenges in maintaining stable employment and financial security. LGB+ individuals often face higher rates of unemployment and underemployment, which can lead to increased poverty rates.^[21] Employment challenges, including discrimination in hiring and workplace environments, contribute to the economic difficulties experienced by the LGB+ community.

Race

People from non-white minority ethnic groups are more likely to be in relative poverty after housing costs compared to those from white ethnic groups. Currently, around 38% of people from non-white minority ethnic groups are living in poverty, compared to 18% of people from white ethnic groups (2018-2023).^[22] Ethnic minorities face higher unemployment rates and are more likely to be in low-paid jobs, which contributes to higher poverty rates. Ethnic minorities are more likely to live in overcrowded housing and face higher housing costs, which can exacerbate poverty.

Religion or belief

Muslim adults are more likely to be in relative poverty compared to the overall adult population. Currently, 41% of Muslim adults are living in poverty after housing costs are taken into account (2013-2018), compared to 18% of the overall adult population.^[23] Adults belonging to various Christian denominations also experience varying poverty rates. Those belonging to the Church of Scotland have a slightly lower poverty rate of 14% compared to the overall population. Roman Catholic adults have a poverty rate of 20%, while adults of other Christian denominations have a poverty rate of 18%.^[24]

The age profile of these groups impacts poverty rates. The median age of adults belonging to the Church of Scotland is 60, while the median age for Muslim adults is 33.^[25] Older age groups generally have lower poverty rates, which partly explains the lower poverty rate for the Church of Scotland.

Marriage and civil partnership

Married couples generally have lower poverty rates compared to single-parent households. Currently, households headed by married couples have a lower incidence of poverty compared to those headed by single parents (2021-2024).^[26] Married couples often benefit from dual incomes, which can provide greater economic stability and reduce the likelihood of poverty.

1.6 Recommendations and Conclusion

The PSR Strategy is built on strong evidence about health, poverty, and inequality in Scotland. It recognises the real challenges people face—especially those from communities who experience disadvantage due to race, disability, gender, and other protected characteristics.

This Strategy sets out a bold, long-term vision: to improve public services by focusing on prevention, early support, and addressing the wider needs of our communities. By doing so, we aim to reduce pressure on the system and deliver better outcomes for everyone.

The Strategy sets broad, system-wide goals and reflects both work in train (particularly Pillar 3) and a range of new and early stage commitments. Consequently components of the strategy set strategic intent and detailed actions are not provided at this stage, however, its focus on fairness, equity, and system-wide change is a clear step toward tackling deep-rooted inequalities.

Tackling poverty is emphasised in pillar 1, reflecting the inequalities outlined by the evidence impacting those with protected characteristics experiencing disadvantage.

Pillar 2 of the strategy aims to address issues those who use more public services face in accessing them, particularly around duplication and confusing systems. A place based and person-centred approach will have most benefit in improving outcomes for these people.

Pillar 3 aims to ensure services are sustainable into the future, protecting the support those with protected characteristics receive.

As we move from planning to action, we’ll carry out detailed Equality Impact Assessments for each workstream as required. We will review this assessment annually, including reviewing the cumulative impact of the pillars and strategy, and will also build equalities into our monitoring approach to ensure we know we are reducing inequality of outcome. Equality will remain at the heart of everything we do, supported by ongoing monitoring and meaningful engagement with communities.

Scotland is changing—and so must our approach. The Strategy will evolve as new evidence emerges, always aiming to reduce inequality and ensure that improved services benefit every community, fairly and fully.