The Social Security (Up-rating) (Miscellaneous Amendments) (Scotland) Regulations 2025: scrutiny report

Prior to uprating for 2025-26, a range of benefits were covered by the statutory up-rating under section 86B of the Social Security (Scotland) Act 2018.  However, the up-rating of a number of other devolved social security benefits was discretionary.  These were—

• Best Start Grants;
• Best Start Foods;
• Child Winter Heating Payment;
• Winter Heating Payment; and
• Job Start Payment.

As noted above, following the recent passage of the Social Security (Scotland) (Amendment) Bill through the Scottish Parliament these devolved benefits will now be up-rated under section 86B of the 2018 Act¹Job Start Payment is not encompassed by the 2018 Act and will continue to be discretionary. Best Start Foods will be brought under the scope of the 2018 Act, via Section 86B, in the future following Royal Assent, but is also being increased by 1.7%..

As in previous years, the Scottish Government is applying the annual rate of the Consumer Prices Index (CPI) for September 2024 as the rate at which benefits will be up-rated.  The annual CPI rate for September was 1.7%.

The Commission notes that the November 2024 CPI rate was 2.6% and that the September CPI rate of 1.7% was the lowest CPI rate since April 2021²ONS, Consumer price inflation, UK: November 2024, Figure 1..  However, the Commission also recognises that the methodology applied to determine the rate at which benefits will be up-rated is consistent with that adopted in previous years.

The Scottish Government commented, in the Section 86A report, on the rationale for using the September CPI rate and on forecasts of UK inflation in 2025-26 in the following terms—

The CPI 12 month rate for September is published in October so allows its use in the Scottish Government budget process that begins shortly afterwards, ensuring sufficient funds are allocated to fund up-rating of social security assistance, and also sufficient time to update Social Security Scotland payments system in time to pay new payment rates in April.

In October 2024, the Office for Budget Responsibility published their latest Economic and Fiscal Outlook , confirming that annual CPI inflation is expected to remain close to the 2% target throughout the forecast period. A temporary rise from 2% is predicted in 2025 driven by higher gas and electric prices. However, at this time, there is significant uncertainty around the forecast for CPI inflation as various factors can driver lower or higher inflation including wage growth or the continuing conflicts in the Middle East and Ukraine.

In summary, CPI remains the most appropriate inflation measure for up-rating of assistance and the annual rate to September is the most appropriate period. However, the Scottish Government is committed to keep its up-rating policy under review and will consider alternative approaches if there is a material change to inflation measures (paras. 3.2–3.4).

Observation One: The Commission welcomes the commitment to keep the uprating policy under review and to consider alternative approaches if inflation measures change materially.