Scottish Child Payment Regulations 2020: scrutiny report

The Scottish Commission on Social Security's scrutiny report on the draft Scottish Child Payment Regulations 2020 with recommendations for the Scottish Government.

Areas for Review

In accordance with social security principle (g), the Scottish Government has already indicated that it plans to undertake a review of the Scottish Child Payment, linked to a wider review of the Tackling Child Poverty Delivery Plan. This section explores issues for consideration in a future review, and the conduct and the timing of the review.

The Scottish Government has understandably been eager to launch the SCP as soon as possible. To implement some of the recommendations in this report from the launch of the payment might require a pause in the process that runs contrary to this aspiration. However, it is worth considering at the first opportunity whether the payment in its initial form will be fit for purpose in the long term. The Scottish Government has indicated that it plans to conduct a review following full roll-out to children under 16. The Commission observes that there might be important lessons to be learned from early experiences of the SCP before eligibility extends to children aged six to 16, even if a full evaluation has to wait until later.

The review should consider key issues raised in the Commission’s report, including:

  • The impact on child poverty of the initial introduction of the SCP for children under six
  • Whether a three percentage point reduction in child poverty is likely to be achieved following extension to older children
  • The merits of the chosen approach to uprating
  • The merits of the chosen payment pattern
  • The long-term appropriateness of the use of the top-up power for the SCP or other ongoing social security payments
  • The desirability and feasibility of a tapered withdrawal of the SCP
  • Any other opportunities for improvement of the SCP.

This review should actively involve SCP recipients, prospective recipients, including parents of older children, and other relevant stakeholders.

Recommendation 12: The Scottish Government’s proposed review of the SCP should explore issues raised in the Commission’s report and actively involve prospective recipients including parents of older children and other relevant stakeholders. If feasible, the review should be undertaken before the extension of SCP to older children.

An overarching issue, potentially of relevance to all devolved social security legislation, emerged during the latter stages of the Commission’s scrutiny of the SCP Regulations. At this time we were simultaneously commencing scrutiny of the draft Disability Assistance for Children and Young People Regulations. Both sets of draft Regulations contained provisions relating to things like residence rules and circumstances in which a determination can be made without application. Comparable provisions can be expected to appear in future Regulations. In the interests of simplicity – for Social Security Scotland, claimants and the advice sector alike – it would be desirable for these, and the definitions of words, to be the same across forms of social security assistance unless there is a good reason why not. For instance, some forms of devolved assistance may require consistency with reserved benefits, while others may not. A similar level of cohesion to the decision maker guidance on when recovery of overpayments should be sought would also be useful.

The Scottish Government provided the Commission with the Equality Impact Assessment on the SCP during the scrutiny process, and this was very useful in our consideration of the contribution of the payment to the realisation of certain rights. Other impact assessments were not received, and with hindsight it would be very welcome if these could be provided during scrutiny of future draft Regulations. For example, the Business and Regulatory Impact Assessment might have shed further light on the capacity of the voluntary sector to promote take-up. The Child Rights and Wellbeing Impact Assessment may also have been informative during our consideration of the impact of the draft Regulations on children’s rights.

Recommendation 13: When developing new Regulations, the Scottish Government should routinely review whether there is scope to increase consistency and coherence across Regulations, unless there is good reason for differences between them.

Take-up of the SCP by potentially eligible families will ultimately be
capped in line with the take-up rate for the qualifying reserved benefits.
Take-up of some of these benefits is low, with an estimated one in four
eligible households across Great Britain failing to claim pension credit in
2016-17 and a similar level of non-take-up of income based jobseeker’s
allowance in the previous year.34 One of the stated aims of universal
credit has been to improve take-up rates.35 Whether this proves to be the
case will only become clear as roll-out progresses, but modelling of
options for the SCP assumed that take-up for universal credit will at least
match the 83% rate for child tax credits.36 Even this figure represents a
significant level of unclaimed entitlement. Based on UK-wide take-up
estimates the Commission calculates that 58,000 families in Scotland could have missed out on child tax credits during 2017-18,
37 although it
would be useful if data could be provided for each country within the UK
in the future.

Any Scottish Government take up strategy for the SCP must consider what might be done at devolved level to promote take-up of qualifying reserved benefits. Strictly speaking, the Scottish Ministers’ duty to promote take-up under section 3 of the Act only covers devolved forms of assistance, but the use of the top-up power means take-up of the SCP is inseparable from take-up of the qualifying benefits, chiefly universal credit. Our Charter requires Social Security Scotland to alert individuals if they appear to have an unclaimed entitlement to a benefit not delivered by Social Security Scotland, which might include reserved benefits. It is not too great a leap to suggest that the Scottish Government ought to encourage the public at large to take up any  entitlements they might have. The current reliance on the voluntary sector to lead take-up campaigns may not go far enough.

During the Commission’s engagement with the Scottish Government, we detected some caution about active promotion of reserved benefits on the basis that if additional take-up were driven by action at devolved level, this might count as a ‘detriment’, or extra cost, to the UK Government under the fiscal framework, for which the Scottish Government would be liable. The Commission would be disappointed if this were the case. One of the stated objectives of universal credit is to reduce poverty by improving take-up rates compared to the legacy benefits, so it could equally be argued that any take-up campaign by the Scottish Government would be using devolved resources in pursuit of UK Government policy objectives. In any event, it would be extremely difficult to be sure how many additional universal credit applications were submitted as a result of either the introduction of the SCP or any associated take-up campaign, and therefore what detriment occurred to the UK budget. Some reassurance – as well as a possible model from which to learn – can be found in Northern Ireland, where the annual ‘Make the Call’ campaign was reported to have resulted in 4,810 people claiming £21 million of additional benefits in 2016-17 alone.  The Commission is not aware that the Treasury has ever sought to deduct money from the Northern Ireland block grant as a result of increased take-up.

Ultimately, clarity on this point can only be achieved by agreement between the two Governments. It may be worth addressing this issue in the context of the proposed review of the fiscal framework in 2021. If it is confirmed that no detriment would apply, the feasibility of amending the duty to promote take-up in section 3 of the Act to cover reserved benefits that confer entitlement to a top-up under section 79 might then be explored.

Recommendation 14: Subject to clarification on detriment to the UK Government for the purposes of the fiscal framework, the Scottish Government should seek to maximise take-up of reserved benefits that confer eligibility to the SCP, through initiatives led by the Scottish Government or, if possible, in partnership with the DWP.

The SCP would be the first form of social security assistance to be created using the power in section 79 of the Act to ‘top up’ benefits paid under UK legislation. Payment of the SCP will be linked to the payment of relevant reserved benefits, meaning that there will unavoidably be various new, and potentially contentious and complex, interactions between the Scottish and the UK social security systems. As a result, there will be wider lessons to be learned about the circumstances in which the use of the top-up power might or might not be desirable, and how it can be used to the best effect.

The top-up power was not the only possible vehicle for the delivery of a new income supplement for families with children. Devolved powers extend to the provision of “assistance for social security purposes [which] are not connected with reserved matters.” This power has potential advantages. The SCP could be paid according to whatever criteria the Scottish Parliament approved and would not be limited to recipients of a reserved benefit. There would be greater scope to do things like paying the SCP in advance, rather than in arrears, and during periods when universal credit or a legacy benefit was not being received, or to allow a longer period after the termination of the qualifying benefit before SCP eligibility lapses. Each of these was identified as desirable by participants in our stakeholder event and previously highlighted through an independent consultation compiled by the Joseph Rowntree Foundation. Dependence on data from an external organisation (DWP) would be reduced. There are also disadvantages. Primary legislation would be required, delaying introduction of the payment, and Social Security Scotland might have to collect much more information on applicants to assess eligibility (although this risk could be mitigated if a reserved benefit continued to be used in some way to signify entitlement, as with the Best Start Grant).

In adopting the top-up approach, the Scottish Government has concluded that the expediency of doing so outweighs the possible disadvantages. Nonetheless, this decision merits further assessment and scrutiny as the SCP is rolled out. There will be important lessons for both the future extension of the SCP to children aged between six and 16 years and subsequent use of the top-up power. These include the suitability of the top-up power for this purpose, but also whether the power is being used in the most appropriate way – especially given the aim of reducing poverty. For example, in the development of the SCP the Scottish Government observed that the use of child benefit as the qualifying benefit would require higher expenditure to achieve the desired impact on child poverty,45 but topping up child benefit would also have advantages due to its higher levels of take-up. Consideration might also be given to whether it would be more efficient to have the Department for Work and Pensions administer the SCP top-up alongside the qualifying benefit.

Recommendation 15: Issues and learning around the future use of the section 79 top-up power more generally should form part of any future review of the SCP.

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