Forms of assistance where no duty to uprate
There are complex arrangements concerning the duty to report on the inflation-adjusted level of each relevant figure, which forms of devolved assistance there is an option to uprate, and which there is a duty to uprate. For some forms of devolved assistance there is a duty to do both, for some there is just a duty to report and for others there is no duty to do either (please refer to the table in Annex A). It would be helpful to set out the rationale for this. Moreover, it is worth noting that the Social Security Charter contains a commitment to review the payment levels of Scottish benefits every year. It does not restrict this to certain benefits.
Recommendation 8: In the interests of transparency, the Scottish Government is asked to clarify the reasons why inflation-adjusted levels must be reported on for certain forms of assistance but not others, and why there is a duty to uprate some but not others.
Section 77 of the 2018 Act requires that Scottish Ministers must publish, before the end of each financial year, a report stating what they have most recently calculated to be ‘the inflation-adjusted level of each relevant figure’, how they have done so, what (if anything) Ministers have done, or intend to do, in light of their calculations and their reasons for that decision. They must do this for assistance provided under Chapter 2 of Part 2 of the 2018 Act. This means they do not have to do so for top-up benefits created under Part 3, section 79, or discretionary housing payments.
Recommendation 9: In order to understand the impact of inflation on the people receiving benefits, it would be useful if section 77 reports covered all forms of devolved assistance (or were accompanied by documents providing this information).
While Scottish Child Payment (SCP) is being created using section 79 top-up powers, and so there is no duty to uprate it under section 78 it or provide information on inflation-adjusted levels in section 77 reports, we understand that Scottish Ministers are committed to uprating it in the forthcoming SCP regulations. This is welcome news. Failure to uprate SCP would erode real value over time and disproportionately impact on low income households, thereby working against the Scottish Government’s child poverty targets, the social security principle on contributing to poverty and human rights requirements on standards of living.
It is unclear whether the commitment to uprating SCP (the only top-up benefit to have been created to date under section 78) is indicative of the intention to uprate any or all future top-up benefits or whether it is an exceptional case, despite the fact this is not required under the 2018 Act.
It is worth noting that if reserved benefits are uprated but the top-up amount is not, then the real value of the latter will diminish over time. Secondly, if information on the inflation-adjusted level of top-ups is not published, it will be hard to gauge the extent of real-terms reduction in their value.
Recommendation 10: The Scottish Government could usefully monitor – and include in section 77 reports – information on the interface between, and values of, any top-up benefits and the UK Government’s uprating decisions on the reserved benefits they top up. This would enable identification of changes to the real value of top-up benefits.
Recommendation 11: The Scottish Government is asked to clarify whether its general intention is to uprate any top-up benefits created under section 79 and, if so, to confirm the approach it will take.
Given that the Scottish Government apparently has the option to uprate certain forms of assistance where it is not compelled to do so, in the interests of transparency and consistency it becomes helpful to clarify the basis on which decisions to uprate or not to uprate will be taken. For example, would they be driven by the size of the inflationary increase and thus the size of impact on recipients if not uprated, commitments in related strategies (e.g. on child poverty), the purpose of the assistance and degree of importance ascribed to it, or cost considerations?
Key questions include:
- Whether Scottish Government proposes to make clear the factors or criteria on which it will base decisions on whether or not to uprate.
- if the Scottish Ministers decide to uprate one or more forms of assistance where there is no obligation to do so, whether it would be necessary to do so using the same index as used for uprating those forms that Ministers are obliged to uprate. Or, whether, in theory, there could be greater freedom here, e.g. to establish ‘relevant prices’ that are specific to the purpose of the assistance or the level of inflation experienced households receiving it.
- If, how, when and by whom the above decisions would be subjected to scrutiny.
We understand that the annual uprating regulations to be referred to SCoSS are likely to be minimal – merely details of new figures for benefits where there is an obligation to uprate. We are grateful to the Scottish Government for confirming to us that, while there is no statutory duty to seek SCoSS’s input on uprating other forms of assistance beyond those laid out in Section 78 of the Act, the views of SCoSS (and, presumably, the Social Security Committee) will be welcomed by the Scottish Ministers. Information relating to the uprating of other forms of assistance will be shared with SCoSS to allow this to be undertaken.
Recommendation 12: We invite the Scottish Government to clarify its approach to uprating forms of assistance where there is the option, but no obligation, to do so.
An Equality Impact Assessment (EQIA) was not prepared for the uprating measures report. We understand from Scottish Government officials that it is regarded as sufficient that EQIAs were undertaken to inform the Bill and will be used to inform the development of individual benefits. There is felt to be no need to undertake a separate EQIA for draft uprating regulations as these only concern maintaining rates of assistance relative to inflation.
We note, however, evidence that inflation can impact differently on different households. The uprating measures report states, “lower income households may experience higher price increases than higher income households”. Moreover, people with certain protected characteristics may disproportionately rely on certain forms of assistance. Groups such as disabled or older people may disproportionately rely on assistance with fuel costs, and they could be disproportionately adversely affected if the value of related support were not maintained. Similarly, women, for example, may rely disproportionately on early years support. There may also be regional variations in the impact of inflation.
In short, while there may be a case for not carrying out an EQIA on forms of assistance where there is a duty to uprate, where there are choices on whether or not to uprate other forms of assistance there is a case for carrying out EQIAs to identify the impact of not doing so on protected characteristic groups who disproportionately depend on those forms of assistance. Under a human rights lens, failure to do this could also create discrimination in the enjoyment of the rights protected by the Covenant (Article 2(2)).
Recommendation 13: We invite the Scottish Government to clarify whether it will undertake an EQIA to inform section 77 reports and decisions on whether or not to uprate forms of assistance where there is no obligation to do so.
If a benefit is not uprated for a number of years there will be a cumulative effect on its value. Section 77 reports could therefore usefully describe what the cumulative total value of a benefit would have been had it been uprated annually. This would enable a comparison with the actual value. The impact on poverty of freezing payment levels can be significant, as evidenced by the consequences of the UK Government’s decision to introduce a 4-year freeze from 2016.
Provision of cumulative total values may also be relevant to monitoring the relevant social security principle on contribution to poverty reduction and human rights concerning standards of living. Significant falls in value may indicate that, far from contributing towards poverty reduction, poverty is being exacerbated for those who rely on those forms of assistance. Falls in value might also run contrary to principle a) – social security is an investment in the people of Scotland.
Recommendation 14: Section 77 reports could usefully describe, or be accompanied by documents describing, what the cumulative total value of a benefit would have been had it been uprated annually. This would allow for an evaluation of the effect on poverty levels of not uprating benefits.