Scottish Budget 2019-2020: Equality and Fairer Scotland statement

Chapter 1 Introduction to Equality, Fairer Scotland and the Scottish Budget 2019-20

Introduction

Embedding equality, human rights and Fairer Scotland duties when setting a vision, and when designing and delivering policies can be transformative. Equally, the way in which budgets are allocated and their alignment to the vision and priorities of a government has a clear impact on people's lives.

The Scottish Budget is set within a strategic context and financial envelope which means that there is always a difficult balance to find between many, often competing, objectives and legal requirements. Within this reality the Scottish Budget has due regard to its equality and Fairer Scotland duties. It aims, wherever possible, to target spend over time to reduce measurable differences in outcomes by protected characteristics (age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion or belief; sex; sexual orientation) or by socio-economic disadvantage, when compared with the rest of the population.

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, asking public bodies to have due regard to how decisions can reduce inequalities of outcome caused by socioeconomic disadvantage.

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^[1].

This year's Equality Budget Statement (EBS) sets out how the Scottish Budget 2019-20 invests in the physical and social infrastructure required for a strong, innovative, inclusive economy. This approach, when combined with the provision of high-quality universal services and progressive taxation, means that the Scottish Budget 2019-20 represents a strong social contract between the Scottish Government and the people of Scotland.

Strategic Context to the Budget

Continued leadership in approach - At the beginning of this parliamentary term, the First Minister set out a commitment to equality of opportunity, fulfilling rights and tackling inequalities. This message has been repeated through numerous engagements and was further reinforced in the 'Programmes for Government' published in September 2017 and in September 2018. The Scottish Government recognises that equality, social justice and inclusive growth are interconnected, and that action to give effect to international human rights treaties requires concerted action to promote genuine equality of opportunity and esteem for all.

Setting a clear vision and agreed values - In July 2018, the Scottish Government published a revised National Performance Framework (NPF). This new NPF was built from the bottom-up, listening to people's views. It embeds the UN Sustainable Development Goals (SDGs) - 17 goals reflecting the most pressing challenges facing our world. It then identifies a set of aligned outcomes that the people of Scotland want to achieve and values that set the tone for that action. This new NPF drives a shift from a "whole of government" approach to a "whole of Scotland" approach requiring contributions from all parts of society to make the vision set out in the framework a reality. The NPF will be actively monitored through outcome indicators allowing the Scottish Government, the wider public sector, and other partners the opportunity to identify if action is needed. The NPF also allows proper consideration of not just the average position, but the reality for different equality groups. Breakdowns by protected characteristics, socio-economic disadvantage and place are all built into the new framework where data allows.

Building for the future and creating the Scotland we want - The Programme for Government 'Delivering for Today: Investing in Tomorrow' published in September 2018 set out the Scottish Government's plan of action for the year ahead and set the strategic context for the Scottish Budget 2019-20. It lays down ambitious roadmaps for the future of the Scottish economy and workforce, committing to a mission to raise infrastructure spend to internationally competitive levels while continuing the commitment to digitally enabled and low carbon growth.

The Scottish Budget 2019-20 supports these ambitions, by building for the future; funding the economy through investment in infrastructure of roads, housing, rail, buses, digital access, carbon reduction and the Scottish National Investment Bank. Through this investment it prioritises and invests in an innovative and a competitive business environment.

But, with equal importance, the Scottish Budget 2019-20 invests in people demonstrating that sustainable economic growth and prosperity for all can best be achieved by removing barriers to full participation, by supporting high levels of appropriate skills, fair work and a living wage and by harnessing the entrepreneurship, diversity, creativity, productivity and skills of all of Scottish society. Specifically, it invests in expanding the early learning and childcare sector with immediate benefits to children and parents and longer-term benefits to the economy. It increases investment in education and training through the educational attainment funding and investment in colleges, universities and skills agencies. Finally, it invests in employability and fair work through programmes that develop and encourage participation and progression in the economy from across all groups in society.

A healthy, safe and secure population is a vital component of a successful country which requires the provision of first-class public services. This Scottish Budget delivers protection for the NHS in Scotland as part of the broader commitment to increase health funding by £2 billion over the life of the parliament and provides real-terms protection for the resource budget of the Scottish Police Authority, along with support to innovative development of community justice and a fair settlement for local authorities. The development of the Social Security Agency and initial payments of new allowances show that it is possible to provide a Social Security system that treats people with dignity and respect.

The Scottish approach - Involving people in shaping the policy and services that they rely on will continue to be central to taking forward the funded policies laid out in the Scottish Budget. We will continue to actively seek and listen to the views of people with lived experience, alongside our key partners, harnessing their expertise to design appropriate policies.

Responding to Brexit - The negotiations on BREXIT continue to provide a very difficult, incoherent and uncertain context in which to plan a future for Scotland. Referendum results for Scotland 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 leaving the EU will be significant. It is generally the lowest income households that are most severely affected by economic shocks. Once detail on terms and future scenarios are available, we will more closely examine the likely impacts for people on low income and protected characteristics to ensure that damage can be contained where possible.

Responding to UK challenges - The UK Government's commitment to austerity, welfare reform and tax cuts for higher income households provides a difficult backdrop for the Scottish Budget 2019-20, and requires difficult decisions and choices to be made. The Institute of Fiscal Studies, Resolution Foundation and others continue to project that income and wealth inequality will grow in the UK and that planned welfare reforms will hit lower income households the hardest. Against this backdrop, the Scottish Government continues its progressive tax plans, prioritises spend to mitigate some of the worst impacts of welfare reform - including the Scottish Welfare Fund for crisis intervention, and has passed the new Child Poverty (Scotland) Act 2017, setting very ambitious targets to reduce child poverty by 2030.

Recognising new budget process - In 2017, the Parliament's Budget Process Review Group was tasked with identifying a new Scottish Budget process that fitted the new asks of the Scottish Budget. They set out over 50 recommendations for a new process involving year-round scrutiny and focus on delivery of outcomes. This new process will take time to reach its full potential. In terms of equality assessment, the review group made two specific recommendations. First, to explore the feasibility of distributional analysis and secondly, to develop further equality assessment prior to Summer recess. Both of these recommendations were accepted and are described further in Chapter 2.

Report Structure

The EBS is a supporting document to the Scottish Budget 2019-20 and should be read alongside the main budget document.

The first six chapters of this year's statement provide a strategic overview. This includes an introduction to the EBS (Chapter 1); an overview of equality budgeting (Chapter 2); an overview of Scottish Government as an employer (Chapter 3); an overview of equality impacts related to protected characteristics (Chapter 4); an overview of the Fairer Scotland assessment of the budget (Chapter 5) and an overview of the impact of the budget on child poverty targets (Chapter 6).

The remainder of the statement follows a traditional pattern, providing a summary chapter for each of the 12 Ministerial portfolios.

The Scottish Government has changed to a new model for administration costs this year. This new approach means that budget lines include the Total Operating Costs (including staff resource), rather than staffing being accounted for separately in an Administration budget. This approach gives a better picture of budget allocation, however, it does mean that care should be taken in comparing the Scottish Budget 2019-20 with previous budgets.

Alongside the Scottish Budget 2019-20 and the EBS, there will be a separately published distributional analysis of income tax changes across income groups and with respect to age, gender and disabled people.

Footnotes

1. Background briefing paper on human rights budgeting and budget analysis by Ann Blyberg for the Scottish Human Rights Commission.