Scottish Budget 2025 to 2026: Equality and Fairer Scotland Budget Statement

Chapter 1: The budget process, equality and fairness

About the budget

This Budget is for the 2025-26 financial year, which runs from 1 April 2025 to 31 March 2026. The factsheet ‘Your Scotland, Your Finances’^[1] explains what the budget process is and how the Budget is funded. It is updated following the publication of each Budget annually, and explains the measures within it.

What is the Equality and Fairer Scotland Budget Statement?

The ‘Equality and Fairer Scotland Budget Statement’ (EFSBS) examines the impact that the Scottish Budget is likely to have on people in Scotland.

It assesses what the Scottish Government is proposing to spend public money on and how this is changing. It considers if these decisions are likely to affect some people more than others, and how it might help reduce inequality between different groups of people.

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 due to the barriers they face in trying to improve their circumstances. Measures which tackle inequality seek to ensure everyone has equal status, rights and opportunities. These measures also seek to make sure that no one should have fewer or poorer chances in life simply due to:

• who they are, specifically in terms of protected characteristics as recognised by the Equality Act 2010;^[2]
• the resources they or their family have.

There continue to be persistent systemic inequalities in Scotland. The Scottish Government seeks to address these inequalities, through allocating money in the Scottish Budget. This could involve their access to things like health, education or income. For example, certain groups of people may find it harder to gain employment, be more likely to attain lower exam scores in school or be more likely to be victims of crime compared to other groups. They also may not see themselves represented in positions of power or may be discriminated against.

How do our legal duties require the Scottish Government to consider equality?

The Public Sector Equality Duties (PSED) require that due regard is given to the need to:

• eliminate discrimination;
• advance equality of opportunity; and
• foster good relations between persons who share a relevant protected characteristic and persons who do not share it.

The Fairer Scotland Duty also outlines that the Scottish Government has an additional legal duty to actively consider how they can reduce inequality for adults and children who are socioeconomically disadvantaged, in that they:

• experience low income or wealth;
• experience deprivation; or
• come from a disadvantaged background.

These duties mean that the Scottish Government must consider how inequalities are compounded for people with more than one of these characteristics. For example, a minority ethnic disabled renter on income-related benefits, an asylum-seeking woman, or a low income, lone parent household headed by a mother with caring responsibilities.

It is recognised that for certain groups of individuals, the intersection of disadvantage compounds structural inequality^[3], and this is especially evident in this cost-of-living crisis.

What characteristics do the Scottish Government need to consider?

The Public Sector Equality and Fairer Scotland (PSED and FSD) duties set out that the Scottish Government must consider the differences between people according to certain characteristics. These characteristics are:

• Age
• Disability (disabled people)
• Gender reassignment (transgender people)
• Pregnancy and maternity (mothers)
• 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)
• Socioeconomic disadvantage (under the Fairer Scotland duties)

How does the budget process integrate evidence on equality and fairness?

Each year, the Scottish Government aims to strengthen its approach to equality budgeting, while ensuring the process remains compliant with all statutory duties. This year’s changes to the EFSBS focus on improving how evidence feeds into the budget decision-making process, and how the decisions can be communicated more clearly. These changes include:

• making improvements to internal processes, such as greater integration with the Programme for Government and budget processes to ensure that evidence actively shapes budget decisions when these are made, and the budget process itself to ensure that evidence actively shapes budget decisions when these are made;
• bringing Cabinet Secretaries together again in a pre-budget workshop, but earlier in the process to discuss the impacts of potential budget reductions on equality groups before these decisions are taken;
• developing and publishing new evidence on the distribution of government spending on childcare, health, schools and transport across different households. This Distributional Analysis is critical to understanding how Scottish Government policies are reducing inequality and targeting support at those who need it most;
• introducing analysis which discusses a select number of ‘key decisions’; and,
• publishing the results of the gender budgeting pilot carried out in collaboration with the Organisation for Economic Cooperation and Development (OECD).^[4]

Evidence has been collected from portfolios throughout the budget process, starting with the PfG and over the summer, with Cabinet Secretaries approving the final impact assessment for their portfolio in November. This, alongside the distributional modelling, forms the basis for this year’s EFSBS which considers the cumulative impact of all decisions taken as part of the Budget.

The Government’s Equality and Human Rights Budget Advisory Group provides valuable advice throughout the year. This has helped the Scottish Government’s work to improve both budget processes and the base of evidence for decisions.

References

1 Scottish Budget 2024 to 2025: Your Scotland, Your Finances – a guide – gov.scot (www.gov.scot)

2 Protected characteristics | EHRC (equalityhumanrights.com)

3 Using intersectionality in policymaking and analysis: summary findins – gov.scot (www.gov.scot)

4 OECD Gender Budgeting Pilots: Evaluation Report