Stretched to the limit: ALLIANCE statement on economic and financial policies

ALLIANCE statement on the negative impact of economic policy and public finance decision-making

The Health and Social Care Alliance Scotland (the ALLIANCE) is deeply concerned about the negative impact of economic policy and public finance decision-making on disabled people, people living with long term conditions, unpaid carers, and Scotland’s health and care third sector.  

Even amid a public finance crisis, decision-makers have choices, and their decisions have different outcomes for different groups in society. Bad choices and decision-making processes reinforce systematic inequality in the here and now, and for generations to come. However, putting wellbeing, equality and human rights at the heart of decision-making reinforces fairness, transparency and accountability. 

The ALLIANCE appreciates that the current public finance crisis is in part driven by global events like the war in Ukraine, energy costs, and the COVID-19 pandemic. However, it is also driven by decisions made in the UK and Scotland.  

We have long warned of the damaging impact of Brexit and austerity measures. Yet the UK Government 2024-25 budget continues the policy of public spending austerity that has had a devastating impact on health inequalities.  

The ALLIANCE similarly predicts that financial decisions in Scotland will have stark consequences. Cuts to vital areas like social care, housing, carers centres and respite, and addressing fuel insecurity will negatively impact people’s health and wellbeing. It will particularly affect people whose legally-binding rights – to an adequate standard of living, health, and independent living – are already compromised.  

Budget cuts directly impact the third sector as well as statutory services – regardless of its proven success, and often in the face of growing demand and rising costs. “Third sector” is an umbrella term for civil society organisations that includes those that are voluntary, community-based, charities, and social enterprises. The range of support provided by the third sector is enormous and the health and care system could not run without us. Nevertheless, our work is still too often overlooked or misrepresented as a ‘bolt on’ to the public sector. 

The ALLIANCE has repeatedly emphasised the importance of the third sector as an investment in prevention, health, wellbeing, and equality. However, despite commitments to fairer funding, this is still not implemented in practice. For example, funding is not automatically increased to ensure third sector employers can cover the cost of Fair Work criteria in contracts and grant agreements.  

Scotland’s third sector is stretched to the limit. Our research reveals that 84% of our member organisations responding had experienced increased demand for services, yet 61% reported reduction in funding via grants, 76% were facing higher bills, and 48% were unable to give their employees pay uplifts. Taken together, these paint a bleak picture of a sector under intense stress. 

It is a false economy to underfund organisations that give effect to people’s right to live well in their communities – thereby demanding less from clinical and acute services, as well as providing jobs and volunteering opportunities for thousands. 

As a matter of urgency, the ALLIANCE calls on UK and Scottish economic and public finance decision-makers to take steps to: 

• Fully implement a wellbeing economy and human rights based approach to economic policy and finance decision-making, including fairer tax, national and local budgeting, procurement and grant funding.  
• Ensure that disabled people, people living with long term conditions, and unpaid carers are actively involved in meaningful financial decision-making.  
• Carry out robust equality and human rights data-gathering and analysis to measure and assess the impact that economic policy and public finance decisions have on people and the third sector. 
• Work together to develop the potential of a Minimum Income Guarantee.  
• Formally acknowledge the third sector as both an economic investment and contributor and include us as an equal partner in financial decision-making.  
• Fully implement commitments to fair funding for the third sector without delay. 

More information 

ALLIANCE Member Survey, March 2024

ALLIANCE ‘Stretched to the Limit: Scotland’s Third Sector and the Cost of Living Crisis’ report, September 2023

ALLIANCE ‘Disabled People, Unpaid Carers and the Cost of Living Crisis’ report, October 2022

Sara Redmond, ALLIANCE Chief Officer-Development, ‘The economic role of Scotland’s third sector in shaping health and social care’, February 2024

ALLIANCE ‘Human Rights Budget Work’

Poverty Alliance ‘Minimum Income Guarantee briefing’, August 2023

SCVO ‘Key Sector Statistics 2023’, March 2024

SCVO ‘Fair Funding and Procurement’

SCVO and TSI Network ‘Local Fair Funding Charter’

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