Summary of recommendations
Recommendation 1: In establishing the approach to be taken to uprating, both in the short and longer-term, the Scottish Government should explicitly consider how it conforms to the principles in the Social Security (Scotland) Act 2018 and human rights conventions. The agreed approach should be clearly, accessibly and publicly communicated.
Recommendation 2: To instil confidence in decisions, now and in the future, concerning what the most appropriate uprating index is, it would be valuable if the Scottish Government could set out the factors on which they have been based, along with any supporting evidence.
Recommendation 3: CPI should be adopted in the short-term, but with scope to review it in the longer-term. Meanwhile, we invite the Scottish Government to actively monitor comparisons between CPI, CPIH and RPI and develop future projections.
Recommendation 4: The Scottish Government is invited to present plans to mitigate the adverse effects of volatile inflation on people receiving devolved benefits, should this occur.
Recommendation 5: The Scottish Government is asked to clarify what is meant by using CPI for the ‘foreseeable future’ and to set out any triggers that would prompt a review of its approach to uprating, whether one-off or ongoing.
Recommendation 6: We invite the Scottish Government to set out how it will define ‘materially below’ and the factors that will determine whether a figure is materially below its inflation-adjusted level.
Recommendation 7: We would welcome analysis of the possible effects on the Scottish Government’s decision-making on uprating, should the UK and Scottish economies, relevant policies, and approaches to uprating continue to diverge.
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.
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).
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.
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.
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.
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.
Recommendation 15: When current constraints do not apply and when alternatives to CPI become available, we recommend that the Scottish Government conducts a thorough review of the approach to uprating and that this includes public consultation and engagement.
Recommendation 16: In reviewing its approach, the Scottish Government could usefully consult on the purpose/s and role/s of uprating.
Recommendation 17: We invite the Scottish Government to consider the qualities it would want to ensure should be reflected in whatever future approach to uprating system is adopted.
Recommendation 18: We suggest that the Scottish Government actively investigates/ pursues developments in uprating methodology, including engaging with ONS, that may have potential to deliver improvements to approaches to uprating.