Report reveals marginalised Scots hardest hit by tax & spending plans

By Graham Millar

Lone parents, black families and those with three or more children are the biggest financial losers as a result of the tax, spending and local services reforms, a new study has suggested.

With the UK Government’s commitment to the deficit reduction strategy, devolved governments have had to re-shuffle spending and taxation. The report, titled ‘The Cumulative Impact on Living Standards of Public Spending Changes’, and published by the Equality and Human Rights Commission, shows how the Scottish Government’s decision to slash higher and further education budgets, as a means to cope with stricter targets, has caused this detrimental impact.

As a consequence of these cuts, those among some of the lowest household incomes are losing around £450 per year with richer households enduring an even higher loss. By 2022, it is estimated that spending on schools, higher education and further education will have reduced by between 30-50%.

The report also discloses how black households experience the largest overall spending cuts in cash terms, while white households lose less than other ethnic groups. In terms of their final income, lone parent households (predominantly female) are the most greatly impacted than any other demographic.

John Wilkes, Director of the Commission in Scotland, said:

“The findings show just how stark and unequal the combined impact of the recession, austerity and public spending cuts have been. Using this new approach to assessing the combined impact of tax and spend policy reveals that it is the most marginalised who have suffered the most.”

Compared to England and Wales, Scotland’s “pro-poor” policy has led to more positive results. There are various reasons for this, such as population growth – England has outgrown Scotland at a considerable rate – and different spending decisions.

The author of the report, Howard Reed, said:

“This research shows  that the combined impact of tax and social security reforms since 2010 has hit the poorest households in Scotland hardest.” He added, “The Scottish Government’s own spending choices have mitigated some – but not all – of the adverse consequences of the tax and social security decisions made by the UK Government in Westminster.”

The report calls for the Scottish Government to review its spending on the higher education and further education where the greatest cuts have taken place. It also recommends that the UK government should consider mitigating the vast negative changes to reduce disproportionate impacts on some groups in our society.

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