Organisation for Economic Co-operation and Development - gender budgeting pilots: evaluation report

Annex A: OECD Assessment of Gender Budgeting in Scotland Report

Initial assessment of gender budgeting in Scotland

Summary report, July 2024

Background

Addressing gender inequality is essential for Scotland's long-term wellbeing, economic prosperity and fiscal sustainability, particularly given the challenges posed by an ageing population. There are several areas where citizens face persistent gender disparities. For example, despite increased attention to the pay gap, women still face significant barriers to entering, maintaining, and advancing in their careers. These inequalities have far-reaching consequences, with women disproportionately affected by poverty, reliance on social security, and underemployment. The resulting social, economic, and fiscal costs are substantial.

Closing gender gaps necessitates a multifaceted policy approach. Gender budgeting is a crucial governance tool that enables governments to identify and prioritise investments effectively advancing gender equality(Nicol, 2022_[1]). In 2020, Scotland’s National Advisory Council for Women and Girls (NACWG) advocated for the integration of intersectional gender budget analysis into the Scottish budget process.

The Scottish Government has long recognised the equality impacts of budgetary decisions. In 2000, it established the Equality Proofing Budgets Advisory Group (EBAG), followed by the introduction of the Equalities Budget Statement (EBS) in 2009. More recently, the Government has committed to an equality and human rights-based approach to budgeting. This approach centers equality and human rights within public finance management, aligning budget allocations and fiscal policies with the promotion and protection of these principles for marginalised groups. It underscores the government's obligation to respect, protect, and fulfill the human rights of its citizens, leveraging budgeting as a tool for advancement.

Within its overarching framework for equality and human rights budgeting, the Scottish Government seeks to deepen its understanding of how gender budgeting can address gender inequalities. To this end, it requested technical assistance from the OECD. This report presents the OECD's assessment of Scotland's potential for gender budgeting, using the OECD Framework for Gender Budgeting (see Figure 1). The assessment considered aspects including the strategic framework, tools of implementation, accountability and transparency, enabling environment, and impact of gender budgeting (OECD, Forthcoming_[2]).

Figure 1: OECD assessment framework for gender budgeting

OECD assessment framework

01 Strategic framework

02 Tools of implementation

03 Transparency & accountability

04 Enabling environment

05 impact

Assessment and recommendations

The Scottish Government has a strong political commitment to addressing inequalities, aiming to ensure that it is embedded in all that it does(Scottish Government, 2023_[3]). The government has established institutional elements to help facilitate this. This includes having a dedicated Minister for Equalities and a Senior Leadership Group on Equality and Human Rights to ensure equality and human rights are at the heart of policy development(Scottish Government, 2023_[3]) as well as an Equality and Human Rights Budget Advisory Group (EHRBAG) to help shape its equality and human rights approach to the budget (Scottish Government, n.d._[5]). The government also has a National Advisory Council for Women and Girls (NACWG) specifically to advise the First Minister on what is needed to tackle gender inequality in Scotland (National Advisory Council for Women and Girls, n.d._[3]).

Furthermore, public bodies in Scotland have legal obligations to actively consider how their decisions can reduce inequalities caused by socio-economic disadvantage as a result of the 2018 Fairer Scotland Duty. The 2010 Equality Act prohibits discrimination based on characteristics including gender and the 1998 Human Rights Act can be used to challenge policies that unfairly impact certain groups. Scottish Government staff also have mandatory diversity and inclusion objectives to help embed equality into their day to day practice.

Equalities impact assessments (EQIAs) are the main tool used by the Scottish Government in gathering evidence for equality and human rights budgeting. EQIAs are required for all policies and practices as part of the Public Sector Equality Duty. Gender (or “sex”) is one of eight dimensions that can be considered as part of any EQIA. Supporting the implementation of EQIAs, an Equality Evidence Finder helps bring together the latest statistics and research across different equality themes, including gender.

Information from EQIAs helps feed into the Equality and Fairer Scotland Budget Statement (formerly Equalities Budget Statement). This is the centrepiece of the government’s approach to equality and human rights budgeting, providing transparency on where the Scottish Government is proposing to spend public money and how it aims to reduce inequality. In addition, the Scottish Government publishes an analysis of the impact of tax and social security measures included in the draft budget on households of different income levels and characteristics. The publication is used by the Scottish Parliament – and in particular, the Equalities, Human Rights and Civil Justice Committee – to hold the government accountable for its efforts in relation to equality and human rights budgeting.

Supplementing this, the government has also undertaken equalities analysis of the Programme for Government and the Budget (including the spending review and other budget events).

While these efforts are valued, stakeholders raise two key concerns. First, there is a perception that initiatives such as equality and human rights budgeting are “window dressing”, rather than tools driving real change across government. Second, stakeholders are concerned that gender equality gets crowded out as a priority through being one of a number of characteristics which falls under the equality banner. Thus, despite the ambition, gender equality can end up not being systematically considered in government decision-making.

To help bring gender to the fore, and strengthen the overall approach to equality and human rights budgeting, the OECD identifies the following priorities:

1. Identifying clear gender equality strategy goals for Scotland.

Government strategies provide an important framework for long-term planning, guide targeted government interventions, and focus input into the Programme for Government and budget processes. The lack of an equality strategy or gender equality strategy for Scotland can lead to disjointed interventions and a lack of clarity around key priorities. The National Performance Framework, the First Minister’s three missions and the Wellbeing Economy Strategy all touch upon goals in relation to equality. However, a comprehensive set of gender equality objectives would provide an important blueprint to guide gender budgeting efforts. These goals should ideally be embedded in a broader Gender Equality Strategy, linked to the National Performance Framework. The Equality, Inclusion and Human Rights Directorate would be best placed to develop a gender equality strategy that consolidates ongoing efforts from across government, including areas such as gender-based violence, and closing pay and employment gaps. Given the need for cross-cutting action to achieve progress in closing gender gaps, responsibilities linked to the Gender Equality Strategy should be highlighted in Ministerial mandate letters. This will help link it with policy development across government.

2. Improving the quality of EQIAs and gender analysis within them.

Strengthening EQIAs, and the gender analysis that is undertaken as part of them, will be critical in helping identify and eliminate gender bias across a range of policy areas, accelerating progress towards gender equality. Stakeholders report issues with the quality of analysis contained within EQIAs, as well as the timing of the exercise, with the analysis often undertaken too late to impact policy design. The Scottish Government can overcome this through:

a. Communicating clear screening criteria for when gender analysis should be included in an EQIA.

b. Encouraging EQIAs to be undertaken earlier in the policy development cycle, and reporting on progress.

c. Ensuring a responsive approach to EQIA findings, where the design of measures is adjusted to help eliminate any bias identified, and these changes are recorded.

d. Introducing quality control processes, with gender champions or equality teams in each government directorate checking that EQIAs have been undertaken to a good standard.

e. Improving transparency through creating a central government repository for all EQIAs.

f. Expanding the scope of EQIAs to budget cuts or stopping government programmes (e.g., summer budget challenge).

Strengthened EQIAs with robust gender analysis will require increased capacity development across government. Making impact assessment and understanding gender inequalities a policy profession focus could help support this.

3. Establishing the Scottish Exchequer as the clear lead for gender budgeting.

Gender equality is of fundamental economic and fiscal concern. It is beneficial that gender budgeting efforts are led by the central budget authority given its powerful role and central position. At present, responsibilities for equality and human rights budgeting are spread across various government entities including the Scottish Exchequer, the Equality, Inclusion and Human Rights Directorate, the Community Analysis Division and Fairer Scotland teams. In taking the lead for gender budgeting, and requiring EQIA with gender analysis as part of the budget process, the Scottish Exchequer can help move this impact analysis beyond a “tick box” exercise. Government directorates are more likely to provide good quality EQIA when they know that this influences budget decisions. In assuming a stronger leadership role, the Exchequer will need to communicate its approach clearly to directorates. The Exchequer will also have the lead role in developing – and redeveloping – the Equality and Fairer Scotland Budget Statement, with support from the Equality Directorate.

4. Increasing the use of information from EQIAs in budget decisions.

For gender budgeting to have impact, the gender analysis within EQIAs should inform budget decision-making. In Scotland, there is a disproportionate focus on EQIA and developing the Equality and Fairer Scotland Budget Statement, with lesser focus on how the findings from EQIAs input into budget decisions and achieve transformational change. Part of the reason for this is that there is no framework in the annual budget process for considering gender equality evidence as part of budget decisions. Last year, for the first time, Ministers held an equality workshop which gave them an opportunity to consider the equalities impact of the budget as part of their budget preparations. Regularisation of this one-off event will help further integrate equality considerations in budget decision-making. The government can support this, and further increase the impact of gender budgeting on budget decisions through:

1. Identifying key budget measures supporting delivery of the objectives set out in the Gender Equality Strategy, so that Ministers can see whether sufficient action is being taken forward to close key gaps.

2. Considering how funding linked to these key budget measures can be protected from cuts and given greater medium-term certainty.

3. Mandating the provision of summary information from EQIAs – including relevant gender analysis - alongside new budget proposals, with clear instructions set out in the Budget Guidance Pack.

5. Improving the Equality and Fairer Scotland (EFS) Budget Statement.

The EFS Budget Statement has been a welcome development in supporting budget transparency. It can now be further developed so that it is better-targeted to the needs of external stakeholders and has a greater impact on budget decisions. As the approach to gender budgeting is strengthened, the focus of the Statement can evolve to include:

• A report on progress towards key equality objectives, including those set out in the Gender Equality Strategy.
• Details of key budget measures aiming at further progress in relation to these objectives, and their anticipated impact.
• Summary information on the equalities impact of the budget, including:
  • Information on budget measures that have been adjusted subsequent to EQIA to eliminate bias, including gender bias.
  • The distributional impact of tax and spend decisions on equality dimensions, including gender equality.

Opportunities should also be considered to enshrine the annual publication of the EFS Budget Statement in legislation. Legal foundations will help ensure its sustainability in the longer term and insulate it, as far as possible, from fluctuations arising from the economic or political environment.

These OECD recommendations can be used as the basis for strengthening gender budgeting within the overall framework for equality and human rights budgeting in Scotland. Effective gender budgeting can help ensure that the government is taking budget decisions that will close gender gaps in Scotland - an important means to boost the economy and improve fiscal sustainability.

Successful implementation of gender budgeting can also lay the foundations for stronger links between government priorities and budget outcomes as well as greater use of evidence in decision-making. Once a strong methodology has been developed for integrating gender equality considerations in budget decisions, the methodology can be applied to other areas of equality. In this way, gender budgeting can help strengthen the overall approach to equality and human rights budgeting in the medium to longer term.