Tackling inequality: guidance on making budget decisions

Why is it important to think about inequality when making budget decisions?

Policy and budget decisions will impact on different people in different ways. Budgets have the potential to reduce barriers that people face and to promote equality. To fully understand the potential impacts of policy and budget change on the people of Scotland it is not enough to consider the ‘average person’ or the ‘average place’. Rather, it is critical to understand the starting position for different individuals or places, the barriers they might face and how these barriers relate to services and public budget decisions. This approach is central to the purpose and outcomes of the NPF and to the ‘leave no one behind’ agenda of the UN’s international Sustainable Development Goals (to which the NPF is aligned).

The following pages set out 6 key questions to ask when making revenue raising and spending decisions. Answering these questions will help articulate and evidence budget impacts in terms of equality (equality budgeting and gender budgeting); child poverty and socio-economic disadvantage (Fairer Scotland Duty assessments) and human rights (human rights budgeting). These and other useful terms are explained more fully in the glossary (Annex A).

The 6 questions need to be asked not only when setting overall budgets or making revenue raising decisions, but also when making any decisions to maintain, reform or introduce new policy. All these decisions will have budget implications. They can impact on the budgets (and outcomes) of individuals, households and businesses as well as the public, private orthird sector bodies who design and/or implement the policy.

These budget impacts may be immediate, such as an income tax or social security change or provision of a new service, or they may be longer term caused by setting a new strategic direction, such as a new vision for housing, or expanding the use of electric vehicles. It may also be direct, such as the cost of providing more hours of free childcare or it may be indirect, for example, the additional childcare jobs created by the decision to provide more free childcare. In all cases, setting and allocating resources to policy are not neutral processes but ones which are influenced by, and can influence, deep-rooted societal inequalities.

All budgets, from central government budgets to household budgets, balance sources of funding and expenditure for the period of time that they cover. This booklet and the related tools will help ensure that your budget decisions work to tackle inequality and promote human rights as effectively as possible and that they help you articulate and support the choices you make.

“Income poverty is at the root of so many issues that Scotland’s people and places face due to the restrictions it places on people’s lives; spending decisions in the budget can unlock routes out of poverty and proper budget analysis and evaluation is crucial to ensure this happens.”

Jim McCormick
Associate Director for Scotland,
Joseph Rowntree Foundation