The Social Security (Up-rating) (Miscellaneous Amendment) (Scotland) 2024 Regulations: scrutiny report

The impact of inflation, and specific inflation measures, was also covered in SCoSS’s 2023 up-rating scrutiny report.¹Scrutiny report – The Social Security (Up-rating) (Miscellaneous Amendments) (Scotland) Regulations 2023 (socialsecuritycommission.scot) This year, SCoSS notes that the average CPI of 6.7% masks a higher rate for food inflation²Consumer price inflation, September 2023 (www.ons.gov.uk) and that low-income households spend a greater proportion of their income on essentials.³Household Costs Indices for UK household groups: January 2022 to September 2023 (www.ons.gov.uk)

SCoSS has previously recommended that the Scottish Government considers whether an alternative to the September annual CPI rate would provide better outcomes relating to the annual up-rating of social security payments.⁴Scrutiny report – The Social Security (Uprating) (Miscellaneous Amendments) (Scotland) Regulations 2019 (socialsecuritycommission.scot)

The draft Section 86A report for this year’s up-rating exercise refers to a Multi Criteria Decision Analysis (MCDA) analytical report undertaken by the Scottish Government to evaluate potential methods of up-rating using various measures of inflation and different reference periods. A draft of the MCDA analytical report was provided to SCoSS as part of the referral of the draft Regulations.⁵Multi Criteria Decision Analysis of Approach to Up-rating Devolved Social Security Assistance January 2024 (socialsecuritycommission.scot) The broad methodology followed was based on HM Treasury’s Green Book.⁶ The Green Book: appraisal and evaluation in central government (www.gov.uk) This exercise led to a recommendation that September CPI remains the most appropriate method for up-rating.

SCoSS understands that this analysis was prompted by the high and volatile inflation of recent years in order to consider whether the best measure was being used. Officials have informed SCoSS that such an analysis is unlikely to be conducted on a frequent or regular basis, but rather only when considered particularly relevant. SCoSS understands that there are currently no concrete plans for revisiting the MCDA process in the future, though up-rating policy is kept under review, and alternatives would be considered if there is a material change to inflation measures.⁷Draft S86A Report 2024-25 (socialsecuritycommission.scot) page 8

SCoSS understands from officials that some internal stakeholder engagement was undertaken but, in light of the tight timescales involved in up-rating decisions, external stakeholder engagement in the MCDA process was not undertaken. Stakeholders would have sight of this documentation once this is published following the Budget. Nonetheless, SCoSS believes that stakeholder engagement as part of the MCDA process can be beneficial in ensuring that multiple perspectives are included from the outset,⁸Green Book supplementary guidance: multi-criteria decision analysis and would be consistent with social security principle (f).⁹“The Scottish social security system is to be designed with the people of Scotland on the basis of evidence.” MCDA with stakeholder participation has been carried out in other contexts by the Scottish Government including during the development of Carer Support Payment, so may be a model for future MCDA reviews to follow.¹⁰Multi Criteria Analysis – More information on the process used to develop options for future changes to Scottish Carer’s Assistance eligibility (www.gov.scot)

Recommendation 3: The Scottish Government should conduct a further Multi Criteria Decision Analysis to inform its approach to the up-rating of social security payments following the completion of case transfer.

Principle (f) states that “the Scottish social security system is to be designed with the people of Scotland on the basis of evidence”. This principle is consistent with human rights and equality principles also considered within the wider Budget process and should be included in future considerations of up-rating policy and processes.

Recommendation 4: The Scottish Government should engage stakeholders with a range of expertise (including, but not necessarily limited to, the economy, social security, equality and poverty) to inform decisions on aspects of the next up-rating Multi Criteria Decision Analysis such as criteria, weighting and options to be considered.