Emergency Budget Review: equality and fairness - evidence summary

Introduction

What is the Summary of Evidence on Equality and Fairness for the Emergency Budget Review?

This report looks at the impact that in-year changes to the 2022-23 Scottish Budget, undertaken in the Emergency Budget Review, might have on people in Scotland, from an equality and fairness perspective.

It summarises information on the impact of those changes, whether this is likely to benefit or detrimentally affect some people more than others, including people with one or more protected characteristics, and how it might help reduce inequality.

This summary of evidence is not a review of the entire annual budget – that was provided most recently in the Equality and Fairer Scotland Budget Statement 2022-23 and its associated documents^[1].

The exceptional nature of the Emergency Budget Review means that the present analysis is, necessarily, at a high-level and focussed on the most substantial impacts. Where gaps in evidence exist, we are committed to continuing to work to improve this situation. A full Equality and Fairer Scotland Budget Statement will be prepared for publication alongside the 2023-24 Scottish Budget, which is due in December 2022.

What is inequality?

Inequality means that for some groups of people, parts of their lives are harder or worse than for other groups of people, such as finding a job or feeling safe. They may not see themselves represented in positions of power or they may feel discriminated against.

What groups of people are we talking about?

The Equality Act requires that public bodies, when fulfilling their functions, have due regard to the need to eliminate discrimination, advance equality of opportunity and foster good relations between people who share a protected characteristic and those who do not. The groups of people are characterised by:

• Age (e.g. children, older people)
• Disability (disabled people)
• Gender reassignment (trans people)
• Pregnancy and maternity
• Marriage and Civil Partnership
• Race (e.g. Black Scottish, White Gypsy/Traveller)
• Religion or belief (e.g. Christians, Muslims, Sikhs)
• Sex (men, women)
• Sexual orientation (e.g. lesbian, gay and bisexual people)

There is also a requirement to have due regard to reducing the inequality experienced by socio-economically disadvantaged groups (e.g. people with low incomes or wealth, people who live in a deprived area).

How has this Summary of Evidence been prepared?

As indicated above, the Emergency Budget Review is not a review of the entire budget. The scale of changes are significantly smaller than those in an annual budget, and as the Deputy First Minister set out in his parliamentary statement in September^[2], there is only limited scope of what is possible to change, and what can be achieved with in-year budget adjustments. This report is therefore an in-year snapshot of revisions to planned spending, of the overall 2022-23 budget, rather than a forward look across a whole annual budget.

Across the Government, Equality Impact Assessments (EQIAs) and Fairer Scotland assessments are routinely undertaken. These are carefully considered in policy design and influence policy decisions.

Recognising that the Emergency Budget Review aims to focus specifically on mitigating the impacts of the cost of living crisis on individuals and groups most likely to be affected, the specific policy areas under consideration were asked to draw on existing Equality and Fairer Scotland evidence to enable us to conduct a high level analysis of the Review as a whole.

The Review has also been informed by an analytical paper (published separately) exploring the impact of the cost of living crisis on different groups. Both this summary of evidence and analytical paper have been published alongside the Emergency Budget Review.

When looking at the impact of changes in the 2022-23 budget, the Scottish Government has given due regard to the three needs of the Public Sector Equality Duty (PSED):

1. eliminate unlawful discrimination, harassment and victimisation,

2. advance equality of opportunity between people who share a protected characteristic and those who do not, and

3. foster good relations between people who share a protected characteristic and those who do not.

As well as the requirement under the Fairer Scotland Duty (FSD):

• to actively consider ('pay due regard' to) how they can reduce inequalities of outcome caused by socio-economic disadvantage, when making strategic decisions

As in all policy decisions, where any negative impacts are identified, we will seek to mitigate or eliminate these. We also understand that the Duties are not just about negating or mitigating negative impacts, as we also have a positive duty to promote equality.

Public sector pay deals

Pay forms a large part of public sector expenditure, with the total devolved public sector pay bill costing over £22 billion of resource spending this year. The Scottish Government's approach to pay remains to achieve fair and affordable pay awards that promote wellbeing, are progressive, support the lowest paid, protect jobs and invest in public services, while providing for sustainable public finances.

The primary purpose of Public Sector Pay Policy, which directly applies to 50 public bodies and acts as a reference point for all major Scottish public sector workforce groups, is to set parameters for pay increases for respective years; however it also includes wider policy provisions such as on a shorter working week and no compulsory redundancy. The Public Sector Pay Policy is reviewed annually and normally announced alongside the Scottish Budget (the 2022-23 Public Sector Pay Policy was published on 9 December 2021). For 2022-23 Ministers subsequently enabled greater flexibilities – which are typically used to address inequalities - to go beyond pay policy limits to deliver higher pay awards as a direct response to the cost of living crisis, recognising its impact on individuals and households.

The Scottish Government annually produces a detailed Equality Impact Assessment of its pay policy, which also considers impacts on income inequality, and is published alongside the policy^[3]. The most recent assessment for 2022-23^[4] concluded that the "measures proposed in the 2022-23 pay policy can be seen to positively benefit lower paid staff". It reported, for example:

• within the public sector workforce there are higher proportions of women and older employees than within the private sector
• there is a higher proportion of women, disabled people, minority ethnic people, younger employees or a combination of one or more of these protected characteristics as well as part-time workers among lower paid public sector employees

Public bodies covered by the Public Sector Pay Policy are also required to carry out their own equality impact assessment on their specific pay proposals. Accordingly no further impact assessment around pay is required under the Emergency Budget Review.