Strategic Integrated Impact Assessment for the 2026-27 Scottish Budget: process evaluation of pilot activity

Context and New Approach

Context

Each year, as part of the budget process, the Scottish Government assesses the impact of how it plans to raise and spend money. This helps it consider if decisions are likely to benefit some people more than others and how resources can be used in ways that reduce inequality and support the fulfilment of rights.

Since 2009, the Scottish Government has published an annual Equality Impact Assessment, and more recently the Equality and Fairer Scotland Budget Statement (EFSBS). Each year, it has aimed to strengthen how these impact assessments are integrated into the budget process.

This year’s EFSBS was replaced by a Strategic Integrated Impact Assessment (SIIA). The SIIA combined five statutory duties into a single process and publication, with the aim of providing a clearer view of the strategic and cumulative impacts of decisions. These duties are:

1. Public Sector Equality Duty (PSED) (and the related Scottish specific duties)

2. Fairer Scotland Duty

3. Child Rights and Wellbeing Impact Assessment (CRWIA)

4. Consumer Duty

5. Island Communities Impact Assessment (ICIA)

Adding to the complexity, this year the SIIA approach was used to assess a fiscal programme that included the ‘Scottish Budget 2026 to 2027’, the ‘Scottish Spending Review 2026’ (SSR) and the ‘Infrastructure Delivery Pipeline 2026’ (IDP).

Partly in response to feedback and advice from stakeholders, the SIIA also presented new and emerging findings from enhanced distributional analysis and pilots to trial an approach called ‘budget tagging’.

New approach to assessing impacts

The Scottish Government collected, analysed and considered information for the SIIA in a number of ways, and this is set out in more detail in the SIIA document^[1]: Some of the key features of the approach are:

• A three-phase process of evidence gathering from 11 government portfolios.
• A cross-ministerial pre-budget workshop held to assess impacts of emerging decisions on relevant protected characteristics, socio-economic disadvantage and children’s rights and wellbeing.
• Overall, an approach supported by strengthened analytical tools, including enhanced distributional analysis, budget tagging pilot studies and intersectional analysis focused on minority ethnic women.

Piloting budget tagging

Budget tagging is a methodology that has been used internationally for a range of government priorities, such as poverty, gender and climate^[2]. In relation to climate tagging, the World Bank described the approach as:

…”a government-led process of identification, measurement, and monitoring of [climate-] relevant public expenditures.”

Whilst the Organisation for Economic Co-operation and Development (OECD)^[3] describes green budget tagging as:

“[a tool which] …involves assessing each individual budget measure and giving it a “tag” according to whether it is helpful or harmful to green objectives.”

Tagging pilot one: impacts database

A budget tagging approach was piloted for the SIIA, the results of which were used to build an impacts database. This involved Scottish Exchequer asking portfolios to tag a minimum of five budget lines each, and provide a score (or tag) about the ‘impact’ (or contribution) that budget line was expected to make. Based on guidance provided by Exchequer, and drawing on evidence, portfolios were asked to select whether the budget line’s impact was exceptional, positive, neutral, or negative, or alternatively, to indicate if there was no or limited evidence. The impact of each budget line was assessed against each equality characteristic, against the socio-economic impact, as well as the impacts on islands, and on consumers.

The officials co-ordinating the responses from each portfolio drew on a range of analysis and consulted policy officials within each portfolio. The process therefore required a substantive degree of resource across the government. Input was requested in three phases as the budget developed - summer, autumn and winter - to help Exchequer officials provide briefing and analysis throughout the budget process^[4]. Overall, 84 Level 4 budget lines^[5] were tagged at a cumulative value of £45 billion, around two-thirds the value of the total budget.

Tagging pilot two: child poverty tagging

A separate child poverty budget tagging exercise was also carried out. This involved an assessment of over 1,000 individual programme lines. Most of these programme lines were more detailed than the Level 4 budget lines. In contrast to the impacts database pilot, this approach was centrally co-ordinated. The Exchequer Analysis unit led the design of the tagging exercise, including the development and application of tagging parameters and the collation and management of data^[6].

Other analysis

The SIIA also piloted a brief analysis of intersectional gender impacts, with a focus on minority ethnic women. Portfolios were asked to consider four issues in relation to minority ethnic women: the outcomes expected to be achieved by the portfolio budget; what we know about existing inequalities; potential impacts of budget changes; and plans for evaluation.^[7] This approach drew on informal guidance, previously developed with the Equality and Human Rights Budget Advisory Group (EHRBAG)^[8].

Additionally, distributional analysis of tax and social security spending was expanded to cover more resource spending and also the spending review period, and this was incorporated into the SIIA analysis^[9].

Publications

On 19 January 2026, six days after the publication of the budget documents, the SIIA^[10] and an associated tagging spreadsheet^[11] were published. An easy read version of the SIIA was also subsequently published^[12]. Following amendments to the draft budget, an addendum to the SIIA^[13] was published on 6 March 2026 outlining an assessment of the changes implemented as part of the Budget Bill process.

Evaluation questions

This was the first year that tagging has been used to assess the budget. As this is a work in progress, this should be considered an interim evaluation. Overall we were interested in three broad areas: the process used to collect the information; the value, or potential value, of the analysis to the live budget process; and the quality of the published documents. Our key evaluation questions are below, with more detail provided in the Annex. The findings section aims to address these key questions.

• Is it feasible to integrate five legal duties into one assessment?
• Is budget tagging feasible for the Scottish Government?
• Is it feasible to scale up budget tagging to cover more budget lines, or other outcomes?
• Can budget tagging add value to the budget process?
• Can budget tagging improve the transparency of the budget process?
• How feasible and valuable was piloting an intersectional gender impact assessment?
• How did readers find the overall readability and accessibility of the document? What was the impact of staggering the timing of the publication?

Climate change taxonomy

A separate approach is taken to climate change, which sets out how the Budget will impact on the Scottish Government’s priority of tackling the climate emergency^[14]. The climate assessment has considered the full Scottish Budget each year since the 2024-25 Budget, and prior to that it looked at the capital elements only. This complementary approach is noted, but does not form part of this process evaluation.

Preventative budgeting

Scotland’s Public Service Reform Strategy includes a workstream on preventative budgeting^[15], whilst a Preventative Budgeting Tool has recently been published^[16]. Again, this work is noted, but does not form part of this process evaluation.