SWBG blog

Reflecting on the Scottish Draft Budget 2025-2026

While it’ll take some time to go through all the budget documentation, including equality impact assessments, and delve into the detail of the Equality and Fairer Scotland Statement, our first take on the budget is that it offers glimmers of hope for women who are feeling the crunch of years of rising prices. Yet more still needs to be done to invest in care and raise further revenue to support public services. 

The headline grabbing commitment to scrap the 2-child limit is a much needed and welcome decision that cannot come soon enough for families affected by the policy. Ideally this is an action that would change at source with the UK Government scrapping the harmful policy, rather than Scotland’s limited budget envelope being used to mitigate UK actions. Time will tell how the two governments negotiate the delivery of this policy. What must stay front of mind through this process is the families impacted by it and the potential to lift 15,000 children out of poverty. 

Although there’s difficulty comparing information to the current year’s budget due to changes made in reporting, some additional support for public services was announced, including the NHS and social care, and funds for local government. However, the Budget has fallen short of the investment required to make childcare more accessible, and to correct years of underinvestment in care services which are key for women. 

In terms of reporting, it is welcome that the Government has tried to show the 2025-26 Budget against actual spend over the last year. However, there remains room for more transparency behind the figures to support budget scrutiny. We’ll share more on this in our full analysis from a gender budgeting perspective to be published later this month. 

A short breakdown of the high (or low) lights from us: 

On social care 

After decades of underfunding, today’s commitments do not go far enough to meet the needs of this critical sector in the economy. This does a disservice to all those in need of social care support, the workforce (majority of whom are women) and unpaid carers who are picking up the pieces of underfunded services. 

Within this we are disappointed that the government failed to commit funds to end social care charges. A policy the government has committed to by the end of this Parliament in 2026. We know from our work with Glasgow Disability Alliance’s women’s group that these charges are impacting disabled women’s lives and financial and care decisions they are making daily. 

On childcare 

This year’s budget maintained funding to childcare as set out in the 1140hours policy, which will likely see no changes to the way in which this policy is delivered, and no further expansion. Women responding to our childcare survey last year highlighted that a lack of flexibility in delivering early learning and childcare hindered access for some women. We know that the cost of childcare for 1- and 2-year-olds is severely impacting families’ finances, particularly women’s. Research by Pregnant then Screwed Scotland found that 4 in 5 (83.7%) mothers say they often feel childcare costs are the same or more than their income – meaning some parents are in fact, paying to work (1). 

As with social care wages for staff in childcare are set at the real living wage as a minimum. This fails to take into account the need to view care work as skilled work and set wages that reflect this skill. 

On Scottish Social Security 

As mentioned at the top of this blog, the commitment to scrap the two-child limit has been the focus of a lot of attention on social security announcements alongside the changes to reinstate a winter fuel payment to all pensioners after means testing was introduced this year. 

Changes were also made to the earnings threshold for Carers Support Payment, reflecting changes made for England and Wales. These are welcome but as this new payment comes into fully devolved control, further work on its rate and eligibility is necessary to recognise the work of unpaid carers and the levels of poverty they and their families experience. 

The remainder of Scotland’s social security payments are set to rise by inflation rates set in September CPI which was 1.7%. This fails to take into account analysis laid out in the Scottish Fiscal Commission reports of expected inflation rates of 2.6% in 2025-26. This is continuing the UK Government’s failure to provide a genuine safety net to those who need it in our society. 

Standstill funding for the Scottish Welfare Fund is likely to prove problematic as the fund needed topped up this year due to levels of demand. For those facing crisis situations, this is a vital lifeline that needs properly resourced and promoted. 

On violence against women and girls funding 

Commitment to funding the Delivering Equally Safe strategy through 2025-26 is vital for essential violence against women and girls services. While the Budget included resources for the coming financial year, these services need long-term multi-year funding settlements to ensure they can plan and deliver high quality support to women escaping domestic abuse.  

On public sector pay 

It’s good to see the Scottish Government publishing a pay policy alongside the Budget this year to give greater transparency on decision making. Although the Scottish Fiscal Commission have highlighted potential fiscal risks as they did not have workforce information during the forecasting process. 

Women make up a significant proportion of public sector workers, often in lower paid and undervalued roles. The pay policy sets a broad envelope for public bodies but leaves final decisions to the individual bodies. Work to ensure equalities considerations are part of these decisions will be an important measure in tackling Scotland’s gender pay gap, which has risen in the last year. 

On tax 

The Scottish Government missed an opportunity to build more progressive tax actions into this year’s draft budget. 

The end of the Council tax freeze will be welcomed by stretched Local Authorities, as well as the funding settlement from central government. Alongside others in the Tax Justice Scotland coalition, we called for a commitment to the revaluation of Council Tax bands to start the process of developing fairer local tax which supports our public services.  This budget missed the opportunity to kickstart this overdue process, consequently failing to increase much needed extra revenue. 

Small but important income tax changes for those on lower incomes were announced such as the raise of the threshold for basic and intermediate rate taxpayers. This decision will benefit women, who are more likely to be in these bands, and will maintain a progressive income tax policy. 

The Budget was accompanied by the publication of a tax strategy which SWBG will be analyzing to consider how it will work to advance equality and maximise available resources in Scotland. Watch this space for a blog with our reflections. 

While negotiation on Employers’ national insurance contributions between the Scottish and UK Governments will continue over the coming days and weeks, the Scottish Budget was silent on support to commissioned services and the voluntary sector. Care services (both social care and childcare) are likely to be hit hard by the changes, having a disproportionate impact on women who make up the vast majority of the care workforce. 

On equalities analysis 

Alongside the budget documentation is the publication of the Equality and Fairer Scotland Budget Statement. The aim of this document is to bring together how information on equalities has informed budget decision making. This is an important statement of intent by the government. The work put into the development of this publication during the budget process provides an important focus on equality considerations. 

Additionally, multiple equality impact assessments have been published, for example relating to the Tax Strategy. The publication of these documents is a welcome step to increase transparency, and we look forward to reading the details to see how equality considerations have informed policy choices. 

 

SWBG will be publishing our more detailed analysis of the Scottish Budget and how it measures up to the principles of gender budgeting in the New Year.

 

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(1) 4 in 10 women terminating a pregnancy in Scotland say the cost of childcare influenced their decision - Pregnant Then Screwed