With local governments in Scotland face significant funding cuts in the next few years, it is widely accepted that the loss of public services is inevitable. There is, however, great support for protecting frontline services that meet the needs of the most vulnerable. In this paper, it is argued that poverty-sensitive budgeting should be developed to ensure the downscaling of public services takes into account the needs of these people. The paper also presents two experiments with this approach – one more successful than the other – in two councils in Scotland. This paper is part of a series of papers which have resulted from the Whose Economy? seminar series, held in Scotland in 2010 – 2011, whose purpose was to provide a space for researchers, representative organisations, policy-makers and people with experience of poverty to come together and explore the causes of poverty and inequality in today’s Scotland.