SWBG blog

Reaction to the Scottish Budget 2021/22

Responding to Finance Minister’s Budget Statement on Thursday 28 January

This budget was an opportunity to set the direction for Covid-19 recovery in Scotland to build a caring, wellbeing economy. If Scotland is to emerge as a ‘fairer, stronger and greener country’ we need to re-envision what we value in our economy and that starts with investment in care.

We’ve heard signs of hope for this investment but this comes after years of systemic underfunding of care, we needed to see much more. In contrast over £6billion was committed to capital investment projects, it is frustrating to see the repeated focus only on ‘hard hat’ projects. The Finance Minister spoke of a transformational programme of infrastructure investment but for this to be truly transformational it needs to take a more expansive approach so that investment in social infrastructure, recognition of the value and contribution of the care economy, and investment in facilities and workforce development in social care and childcare were key components for long-term, stable investment.

The decision to support the lowest paid public sector workers with a 3% pay increase is an important step and there will be a majority of women in roles affected by this decision, including care workers. It needs to be a step towards improving working pay and conditions within the care sector.

The Scottish Government has taken underwhelming steps to recognise and value the role of care in our economy, we hope that in the process of review additional long-term commitments can be made to support our care services and those who work in them.

While the review process for this budget will take place in a truncated timeframe it's vital this doesn't truncate the process for assessing the impact on equalities through public spending.

On Childcare

We welcome the longstanding commitment to expanding child care provision to 1,140hours. It is now time for this to be delivered, with investment in jobs and the sector to ensure it can be a reality this summer. The expansion of public childcare must continue beyond this commitment with investment to expand the hours available further and decrease the age of children are eligible.

We saw the centrality of childcare to a functioning economy during lockdown, without access to childcare the economy suffered. Pre-pandemic without childcare mothers remained out of the labour market, priced out by the cost of childcare. Plans are needed for longer term investment towards jobs within the sector which are essential to make the additional provision possible. Investment which will in turn yield significant economic benefits to local communities and the Scottish Exchequer.

On social security

The Scottish Child Payment is an important and welcome new part of Scottish Social Security that will reach families for the first-time next month. However, its current rate was set before the pandemic and to keep families afloat needs to go further, faster. Greater investment is needed if we are to reach the child poverty reduction targets the Government has committed to. We support the calls from the End Child Poverty Coalition to increase the value of this payment and work to fast-track its role out. Find out more here.

Women with no recourse to public funds have been thrown into insecurity and possible destitution as no safety net is provided. Work to mitigate this in Scotland needs funding direct to local authorities to support those most in need facing destitution or need to leave an unsafe home.

On unpaid care

Unfortunately an opportunity was missed to increase support to those undertaking unpaid care. Yet, during the Covid-19 crisis the reliance on unpaid care work has increased, with social care packages reducing, reduction in respite care and a closure of childcare. There was, however, recognition of the need to support flexible work options and investment to support advice services. This needs to be backed with financial support direct to carers and care services in the community that provide for people’s needs.

The covid recovery needs to transform the world of paid and unpaid work to recognise the important role unpaid work plays to the functioning of the economy.

On women’s enterprise

The pandemic has had a disproportionate impact on women at work and many may never return to the jobs they once held. The budget acknowledges the disproportionate impact of cuts to public spending on women, yet there are no details of targeted support action. More and more women are turning to business start-up but the budget lacks any commitment to investment in dedicated, needs-based support delivery. Instead blanket support is provided in measures, such as the Non Domestic Rates rates relief, when targeted measures were needed alongside this to ensure a gendered approach.

Women’s enterprise will be crucial to economic recovery and the regeneration of local communities.

On jobs

The commitment to a ‘national mission to create new, good, green jobs’ is an important commitment as we transition to a low carbon economy, it is vital to recognise that these can also be contributed to through investment in the care workforce. Care jobs are green jobs that support local communities.

The list of key sectors including energy transition, construction, transport manufacturing and agriculture and land use management are traditionally sectors dominated by men. Efforts must be made to ensure the investments in jobs do not reinforce and extend inequalities in the labour market but instead efforts are made to support women into training opportunities and take a broader view of green jobs to include investment in care.

The National Infrastructure Mission focuses on creating jobs ‘mainly in the construction sector’ it misses the mark of the wider view of infrastructure that includes social infrastructure.

On Green transition

Care economy jobs need to be considered fundamental to transitioning to a greener, wellbeing economy and need adequate funding and training.

Skills focused policies such as the Green Jobs Workforce Academy and the Climate Change Plan should include measures to tackle occupational segregation to ensure 1) that women benefit from the transition to net carbon zero, and 2) that Scotland is equipped to make the transition.

Scotland suffers from skills shortages in these areas and has a large reservoir of female talent that could be better utilised. The majority of female science technology engineering and manufacturing graduates (STEMM) leave the sector - 70% of women graduates trained in STEM leave STEM specific employment despite being over represented in many STEM specific subjects (Equate Scotland 2020, 8). This is a huge loss of precisely the kinds of skills and expertise that Scotland requires for the transition.

Incorporating a gendered analysis into the plans for transition to net carbon zero would enable policy makers to maximise the opportunities for poverty reduction that the transition presents. It is well documented that women, particularly from Black and Minority Ethnic backgrounds and those with caring responsibilities have been most affected by labour market disruption in the wake of COVID. Measures are needed to ensure that girls enter STEMM and construction industries and that skilled women graduates stay within the sector.

On housing

Despite the £6bn announced for capital investment, there’s been a cut to investment in social and affordable homes by £268million. The Finance Minister underlined the ‘value of a safe, secure and affordable home’ but hasn’t followed this up with investment needed.

Women and their children suffer homelessness in significant numbers. Their risk for homelessness and the choices women make to keep their children housed and safe are inextricably linked with women’s economic dependence, enforced by structural and systemic elements of Scotland’s economy. These experiences are very often framed by women’s experiences of domestic and sexual violence. Thousands of women and children in Scotland are forced into homelessness by domestic abuse every year, safe and affordable housing is a crucial part of rebuilding their lives.

On tax

The Finance Secretary's ambition to deliver a progressive budget that protects incomes is the right one. The action announced on taxation, however, falls short of realising a progressive tax regime for Scotland for the year ahead. While there will be debate over who benefits most from the freeze on council tax, wholescale reform is well overdue. Efforts to support lower-income households will need to be stepped up in order to protect women's incomes and set Scotland on track to meet its child poverty targets.

While income tax rates remained unchanged, this draft budget marked an end to the freeze on Scotland's higher rate income tax threshold. This constitutes a tax break for higher earners - the majority of whom are men - at a time when public finances are tight and higher earners have been better insulated from the financial impact of the pandemic.

On Equalities and Fairer Scotland Budget Statement

We welcome the engagement and commitment to improve and extend equalities analysis demonstrated through the Equalities and Fairer Scotland Budget Statement. A particularly welcome development is the increased alignment between the budget and National Performance Framework.

The introduction of a risk analysis approach is interesting and a useful device to focus attention of public service authorities. It cannot, however, replace or deflect from building understanding of the structural causes of inequalities. Improving knowledge about inequalities and the advancement of equalities must remain a priority for Scottish Government. Building the analytical capacity internally to improve policy analysis and the formulation of policy that can ameliorate the causes and consequences of inequalities. This includes ensuring equalities impact assessments are made across all areas of public spending prior to decisions.

The final innovation in this year's EFBS is the introduction of human rights budget analysis. All of these developments are welcome and, we are told in the EFBS, will feed into concrete recommendations to ministers from the Equality and Budgets Advisory Group (EBAG).