This report provides SCoSS’s views on the Social Security (Up-rating) (Miscellaneous Amendments) (Scotland) Regulations 2021. We refer to these as the ‘draft regulations’ throughout our report. It also builds on SCoSS’s previous reports on the Scottish Government’s approach to up-rating.

The Scottish Government has previously stated that it would use the September figure of the Consumer Price Index (CPI) as its preferred measure of price-inflation unless and until a superior measurement index emerged, as the way annually to maintain (rather than increase) the value of assistance in accordance with statutory requirements. On this occasion, in response to the impact of the COVID-19 pandemic, Scottish Ministers have proposed to go considerably beyond statutory requirements. While the September CPI rate is 0.5%, they propose instead to apply a rate of 1% to certain forms of devolved assistance, including to some benefits where there is no statutory requirement to uprate at all.

SCoSS welcomes this decision. It reflects information we have sourced on the impact of COVID on some low income households. It maintains and slightly enhances the system’s contribution to the realisation of certain human rights and the reduction of poverty. Arguably, the decision can also be seen as an investment in the people of Scotland by helping low income households cope with a period of particular income stress. However, the decision to uprate by more than the September CPI rate of inflation raises questions about the implications for the Scottish Government’s intended strategic approach to uprating and the nature of the evidence base on which discretion has been exercised. We explore these below and make recommendations for action that could strengthen the evidence base, improving transparency and thus accountability.

The Cabinet Secretary referred the draft regulations to SCoSS for formal scrutiny on 29 January 2021, the day after the Scottish Government presented its Scottish budget for 2021-22 to the Scottish Parliament.

The draft regulations could not be formally referred before the budget’s publication, with the result that we had just a few days within which to submit our report. This compressed timetable is a consequence of the postponement of the UK Government’s budget, the consequent delay to the Scottish budget, and the imperative that uprating must come into effect on 1st April. The Scottish Government’s report on its approach to uprating, A report in fulfilment of section 77: Duty to consider effects of inflation , has been published alongside the draft regulations.

Given the very limited time available for scrutiny we were unfortunately unable to consult with stakeholders on the draft regulations, despite the importance we attribute to our scrutiny being informed by the views of stakeholders including people with lived experience. Scottish Government officials helpfully provided a briefing on issues related to the draft regulations at our board meeting of 21 January 2021, and responded to our subsequent written questions. This report reflects information they provided. We have also referred extensively to the ‘section 77 report’ mentioned above. The information it contains is critically important to our scrutiny of the draft regulations.

As required by the Social Security (Scotland) Act 2018, henceforth referred to as ‘the Act’, our scrutiny was undertaken with regard to the Scottish social security principles and relevant provisions of human rights law. The section 77 report highlights as particularly relevant principles (a), (b), (e), and (g). We suggest that principle (f): ‘the Scottish social security system is to be designed with the people of Scotland on the basis of evidence’, is also highly relevant to consider, particularly in a situation where annual uprating decisions exceed statutory requirements or represent a departure from the Scottish Government’s previously stated strategic approach to uprating. We accept that timelines for producing uprating draft regulations may unavoidably not allow for the gathering of evidence via stakeholder engagement. Nonetheless, it remains of critical importance that the Scottish social security system be designed ‘on the basis of evidence’, particularly where uprating is non-routine. Among other things, such evidence should also shed light on value for money, as per principle (h) .

Principle (b) states that “social security is itself a human right and essential to the realisation of other human rights.” Previous SCoSS reports have noted the potential contribution of devolved social security assistance to the realisation of certain rights. Uprating is important to the maintenance of this contribution. If a particular benefit intended to contribute to the realisation of a particular right were not uprated for an ongoing period then, over time, it would make less and less of a contribution to that right. By extension the contribution to the right to social security9 might arguably dwindle. This should be relevant to consider over the longer term.

While it may be reasonable to expect that annual uprating decisions should usually be routine, and while clearly constraints do apply, the Scottish Government has considerable scope to exercise discretion (this is explored in more detail in Annex A below). In keeping with the current exceptional circumstances, the action taken on this occasion clearly is non-routine. In response to the impact of COVID, decisions go beyond statutory requirements and do not reflect the Scottish Government’s previously stated strategic approach to uprating.

The uprating provisions set out in the draft regulations can be summarised as follows:

• The CPI rate in September has been agreed as the measure of price-inflation). The rate was 0.5%. However, the Scottish Government has used a rate of 1% to uprate certain benefits, which, on that basis, represents an increase in their value rather than the maintenance of their value in light of price inflation.
• In addition to Funeral Support Payment and Young Carer Grant, which it is required to uprate (if deemed materially below the inflation-adjusted level), the Scottish Government has exercised discretion also to increase by 1% the level of the three Best Start Grants; Child Winter Heating Assistance; and Job Start Payment.
• It has not exercised discretion to uprate or increase the value of Best Start Foods. This benefit is not covered by the Act. However, the level of Job Start Payment, similarly not covered by the Act, is increased by 1%.
• The duty to report on and uprate Scottish Child Payment does not come into effect until the end of the current financial year. However, it is less clear that this precludes the use of discretion to uprate it on this occasion.

The regulations also include some minor technical amendments to other regulations. We have no comment on these.

The fact that this is not a routine set of uprating regulations, while entirely understandable in the current exceptional circumstances, nonetheless has some important implications. We explore these below.