Fair finances and an equitable economy (2026 Manifesto)

A sustainable third sector as an equal partner

• Embed and deliver fair funding for the third sector across all public sector funders, including sufficient multi-year funding.
• Reimburse Scottish third sector organisations for the increased cost of employer National Insurance Contributions.
• Formally acknowledge the third sector as an economic investment and contributor, including them as an equal partner in public service reform and financial decision making.
• Include the third sector in the Scottish Government’s contributions to ongoing development of the UK-EU relationship.

The third sector makes a vital contribution to the Scottish economy and an invaluable contribution to Scottish society. Around 5% of the Scottish workforce is employed by the third sector, and hundreds of thousands more volunteer. The third sector had a collective turnover of over £9 billion in 2023, and organisations large and small provide a wide array of essential and innovative services in every corner of the country. Third sector services and support have been lifelines for many people and were critical in responding deftly and at pace to both the COVID-19 pandemic and the cost of living crisis.

Despite widespread recognition and praise for the role of the third sector, long term and systemic funding challenges remain a serious threat to the viability of many organisations and services. The commitments given to fairer funding by the current Scottish Government are welcome, but progress so far has been unacceptably slow. Third sector organisations continue to experience unsustainable budget cuts, short-term funding cycles, late payments, and poor communication. The next Scottish Government must increase the pace of implementing fair funding for the third sector, ensuring all public sector funders deliver multi-year funding that meets the costs of service provision, offers appropriate inflationary uplifts, and is settled in a timely manner.

A recent additional pressure on third sector finances has been the UK Government’s increase to employer National Insurance Contributions. The failure to exempt charitable organisations is estimated to cost the Scottish third sector £75 million per year going forward. Unlike commercial organisations, the third sector is not profit-seeking and can only meet this increase via reductions in services, staff or reserves. The next Scottish Government must keep the pressure up on the UK Government to compensate the third sector for changes to employer National Insurance Contributions and ensure that its own funding meets those costs in the meantime.

Despite its size and scope, the third sector is too-often overlooked and excluded by public sector bodies in both national and local planning processes. The sector deserves greater and more formal recognition as an economic investment and contributor and should be fully included in relevant making. The next Scottish Government must ensure that the third sector is treated as an equal partner throughout ongoing processes of public service and finance reform, offering meaningful voice and representation.

The UK’s departure from the European Union has had, and will continue to have, significant social and economic impacts. The EU has taken a leading role in consumer health and environmental protection through regulation of the common market, and this progress should not be lost because of Brexit. The next Scottish Government must fully include the third sector and wider civil society in their contributions to the UK-EU relationship, particularly in relation to key determinants of health like food and energy.

A human rights and wellbeing approach to finance and the economy

• Embed human rights budgeting and Wellbeing Economy approaches across all areas of fiscal policy, including through a tax system that raises sufficient revenue to sustain services.
• Carry out robust equality and human rights data gathering and analysis to measure and assess the impact of public finance decisions.

The overall shape of Scotland’s economy and how the Scottish Government choses to spend its budget have an enormous impact on society. However, those impacts are not evenly distributed, and systemic economic inequalities directly contribute to other forms of inequality, particularly in health. The longstanding approach of combining aspirations for growth in Gross Domestic Product (GDP) alongside redistributive policies has largely failed in recent years to reduce those inequalities. It is more important than ever to move beyond this approach and instead build a more equitable economy underpinned by public services that help to progress and realise human rights.

The ALLIANCE advocate for a human rights budgeting approach to be adopted across all areas of public spending, helping to meet Scotland’s obligations to make maximum use of available resources to deliver on rights. We also support the principles of a Wellbeing Economy: “an economy designed to deliver good lives on a healthy planet.” The next Scottish Government must ensure that human rights, wellbeing and reducing inequalities are embedded in economic and financial planning, including through a tax system that raises sufficient revenue to sustain services.

As part of these approaches, the efficacy and impact of public finance decisions must be fully and adequately evaluated. Robust equality and human rights data gathering and analysis is necessary to measure and assess those impacts, identifying where spending has made a positive contribution to realising positive rights outcomes, and where there is need for further action. The next Scottish Government must put in place data gathering and analysis structures that will ensure there is accountability and transparency for their public spending decisions.

A progressive approach to social security

• Deliver further improvements to the Scottish social security system including greater flexibility for unpaid carers.
• Implement the recommendations of the Independent Review of the Adult Disability Payment to deepen the human rights basis for social security.
• Ensure that all devolved payments are set at adequate values.

Since the powers were devolved in the Scotland Act 2016, Scotland’s social security system has been gradually transformed. The passage of the Social Security (Scotland) Act 2017, which embedded human rights as a key principle; the establishment of Social Security Scotland; the replacement of intrusive and dehumanising assessments with a lighter touch application process; the creation of the Scottish Child Payment; all of these represent positive steps towards a fairer, kinder and more human rights based system.

As the process of devolving payments nears its conclusion, the next Scottish Government must be ambitious. The changes made so far are welcome but cannot be the end of the story and must not replicate the cuts approach of successive UK Governments. In the first instance, further changes that have already been proposed should be rapidly progressed, for example to the Carer Support Payment. The next Scottish Government must fulfil pledges to increase the earnings limit for the Carer Support Payment above the UK level and to increase the length of time the payment will be made after a caring role comes to an end.

Further changes should also follow from the recommendations of the 2025 Independent Review of Adult Disability Payment (ADP). Whilst the primary focus was on ADP, there are recommendations that would improve the operation of Social Security Scotland generally, whilst others would also apply in principle to the Child and Pension Age Disability Payments. The next Scottish Government must commit to timely implementation of the recommendations of the Independent Review of ADP. Arbitrary rules around the distance people can walk and the incidence of fluctuating conditions should be reformed as soon as possible, and greater recognition given to the effects of pain and exhaustion.

The issue of adequacy was a notable omission from the scope of the Independent Review of ADP, and it remains unclear what the basis is for the value of disability payments. Even the maximum value of ADP, amounting to approximately £812 per month in 2025/2026, is significantly below Scope’s estimate of £1,095 for the average monthly additional costs of disability. The next Scottish Government must ensure that the devolved social security system has a clearly established basis for the value of payments and that all payments provide adequate support, including for disabled people and unpaid carers.