Letter from Cabinet Secretary for Social Justice, Housing and Local Government, 1 October 2021
Neil Gray MSP
Convener, Social Justice and Social Security Committee
The Scottish Parliament
Edinburgh
EH99 1SP
1 October 2021
Scottish Government’s Priorities
Thank you for your letter following my appearance at the Committee on 23 September when I provided evidence on the priorities for my portfolio.
That letter summarised points I committed to come back to the committee on. In this response I address those points you indicated related to the Committee’s pre-budget consideration. I will follow up on the other points in due course.
Benefit take-up and the Fiscal Framework
Jeremy Balfour raised the issue of encouraging benefit take-up and how this would be reflected through the Fiscal Framework. You also indicated that it would be helpful if the response could cover how the Fiscal Framework works with the deep-end approach at GP practices
The Fiscal Framework sets out the principle of ‘no detriment’ as introduced by the Smith Commission: policy decisions taken in devolved areas should not disadvantage the other government and as a result, where a decision is taken by either government that results in either a cost or saving to the other, the government taking the decision shall bear the cost or benefit arising. Such costs and benefits are referred to as ‘spillovers’.
Spillovers may arise through a direct, mechanical change (direct effects); or a change in associated behaviour (behavioural effects).
As stated in Scottish Government’s Fiscal Framework, the UK and Scottish Government have agreed to account for all direct effects, and that behavioural effects that involve a material welfare cost or saving will be taken into account where these are in exceptional circumstances.
In social security it is common that reserved benefits, to which an individual is already entitled, can serve as qualifying benefits for eligibility to devolved benefits, for example Best Start Grant payments or Scottish Child Payment.
The Scottish Government and the Department for Work and Pensions (DWP) have agreed that where there is an increase in take-up of reserved DWP benefits to which an individual is already entitled and which serve as qualifying benefits for Scottish Government benefits, this increase would not be treated as a spillover cost.
Correspondence between the then Cabinet Secretary for Social Security and Older People and the Secretary of state for Work and Pensions confirming this agreement is attached.
The Fiscal Framework is currently under review, and we are working with UK Government counterparts to agree the scope of this.
UK Welfare Reform impact on devolved social security priorities
You asked what analysis has been done on UK welfare reform’s impact on the Scottish Government’s ability to deliver on its devolved areas of priority in social security, including the Scottish Child Payment.
Welfare reform by the UK Government continues to have a significant detrimental effect on the efforts of the Scottish Government to tackle poverty. Recent analysis by the Scottish
Government indicates that the UK Government’s withdrawal of the £20-per-week uplift, together with their maintenance of the benefit cap and the two-child limit and previous removal of the family element, will reduce social security expenditure in Scotland by £586 million by 2023/24. This is obviously a significant and severe reduction in expenditure that will necessarily have an impact upon the Scottish Government’s efforts to tackle poverty. Scottish Government analysis, published in November 2020, noted that removing the uplift to Universal Credit and Working Tax Credits and restoring the Minimum Income Floor for self- employed earners could push 60,000 people, including 20,000 children, into relative poverty.
Families with young children in receipt of Universal Credit, and who are therefore eligible for Scottish Child Payment, will be adversely affected by the withdrawal of the £20 uplift to Universal Credit. We estimate that around 2,000 children that received Scottish Child Payment as of 30 June 2021 did so as a result of the uplift to Universal Credit. This represents around 2% of all children in households receiving Scottish Child Payment, and these children stand to lose Scottish Child Payment if the uplift is withdrawn.
We will be undertaking further modelling of the net cost and impact of UK Government welfare reforms in due course and will of course share the resulting analysis with the Committee as soon as possible.
Additional costs of living for disabled people
Pam Duncan-Glancy asked what assessment the Scottish Government has carried out on the extra costs of living for disabled people.
As part of our ongoing commitment to establishing a better understanding of the priority families identified in our Tackling Child Poverty Delivery Plan, the Scottish Government published a report on child poverty in families with a disabled adult or child alongside this year’s Tackling Child Poverty progress report. This outlined that it is generally recognised that disabled people face higher costs of living than non-disabled people. Extra costs may include specialist equipment and home adaptations, specialist therapies, specialist toys and play equipment, paid-for care and increased transport and energy costs. The Scottish Government has also previously noted that disabled people requiring personal assistants are likely to see the highest additional costs of living and that hospitalisation can represent another particularly significant source of costs for families with disabled members. These challenges highlight the importance of focusing our efforts on this priority group as part of our wider child poverty strategy.
The charity Scope produce estimates of the additional costs faced by disabled people and families with disabled children in the UK as a whole. They found that:
• On average, disabled adults face extra costs of £583 a month. For one in five disabled adults, these costs can increase to over £1,000 a month even after the receipt of benefits.
• Having one child with disabilities costs a family an extra £528 a month, rising to £823 a month in families with two or more disabled children. For almost one quarter of families with disabled children, extra costs amount to over £1,000 a month.
Homelessness funding
Miles Briggs asked whether the £50m announced in the Programme for Government was in addition to the Ending Homelessness Fund and, if so, how much of 2017 money was left.
The £50m announced in Programme for Government 2021 is new, as set out in response to PQ S6O-00212. The current £50m Ending Homelessness Together fund covers the period 2018/19 to 2022/23. £16m of that funding remains to be allocated and will be committed in that time period.
I hope this information is useful to the committee and will ensure that the further information requested reaches you by the date you have indicated.
In the meantime I look forward to continued constructive engagement with the committee.
SHONA ROBISON