Consultation on Job Grant

Annex C: Job Grant – Business and Regulatory Impact Assessment Summary

Introduction

1. Depending on take-up, the Job Grant will make payments of around £1.2 million annually and therefore there is likely to be positive impacts upon businesses. Young people may buy items that they would not have bought without the payment, or buy these sooner than they otherwise would. The impact will be dispersed across the country and sectors of the economy. However, we also recognise that not all of this support will result in new expenditure, as some young people would have spent this money in any case and so the Job Grant payment might result in a reduction in the debt taken on by young people entering work, rather than increasing their expenditure.

2. The Job Grant will affect young people who have been out of paid work for 6 months or more (apart from care leavers who will be eligible sooner), and is designed to help these young people into work by smoothing the transition from benefits and helping to reduce the risk of them being unemployed or economically inactive later in life.

3. Reports into youth unemployment have stated that “experiencing sustained periods of being out of work at a young age can have a lasting negative impact on young people’s future earning and employment potential”. Academic studies have also suggested that unemployment can have a damaging effect on young people’s earning potential for many years afterwards.

4. The Job Grant will help in the promotion of the Economic Strategy and in the delivery of the priorities for sustainable growth. Our assessment of the impact of the Job Grant In relation to the five principles of better regulation is as follows:

• proportionate – The Job Grant will mainly impact applicants, though there will be positive impacts for some businesses as a result of increased expenditure by young people. The Scottish Government will look to identify and minimise any indirect impacts, for example administrative burdens, on local government, private businesses or third sector organisations as a result of the grant.
• consistent – The Job Grant has dignity, respect and fairness at its heart. The grant will be delivered on an entitlement basis to eligible young people. We will publish guidance on the grant so that it is clear how decisions are being made.
• accountable – We will ensure that applicants understand their right to make a complaint if they are not satisfied with any aspect of the service they receive from Social Security Scotland. If following a complaint, to Social Security Scotland, an applicant is still unhappy, complaints about Social Security Scotland can be directed to the Scottish Public Services Ombudsman.
• transparent – We will develop a communications strategy for Job Grant. This will aim to ensure that people who are eligible, the third sector, local government, organisations supporting care experienced young people, the employability sector and advice providers are aware of the grant, know how to apply and understand the eligibility criteria. We will publish guidance on the grant so that the eligibility is clearly explained.

• targeted only where needed –Depending on take up, Job Grant could provide support to around 4,000 young people aged 16-24 annually. The Job Grant aims to provide a smooth transition into employment for young people on low incomes by contributing to the costs associated with starting and remaining in work. The Job Grant by targeting young people who face significant barriers to the labour market, rather than at all young people, providing support to those most at risk of becoming unemployed or economically inactive in later life.

Consultation

5. The Social Security in Scotland Consultation specific question “What should the Scottish Government consider in developing the Job Grant?” received 131 responses, 80 from organisations and 51 from individuals.

6. Respondents represented a wide range of individuals and organisations with knowledge and experience of, or an interest in social security matters. The independent analysis of the responses, by Research Scotland^[16], along with the Scottish Government response^[17] were published on 22 February 2017. There was broad support for the introduction of a Job Grant.

7. It is expected that the introduction of a Job Grant may cause additional requests for information and support from existing advice services. The Scottish Government is aware of the potential pressure points and has noted the importance of the new Scottish social security Agency working alongside the advice and support services provided by a range of organisations including Citizens Advice Bureaux, charities, social landlords and Local Authorities to provide a "seamless customer experience - from advice, to application to payment" as detailed in the Review of Publicly-funded Advice Services in Scotland.

Competition Assessment

8. The Scottish Government does not believe that the Job Grant will have an adverse impact on the competitiveness of Scottish companies or the third sector within Scotland, the UK, or elsewhere in Europe.

9. Any procurement required to support the administration of the Job Grant will be subject to the Public Contracts Scotland (2015) Regulations^[18] and the Procurement Reform (Scotland) Act 2014^[19] which together provides a national legislative framework for sustainable public procurement which supports Scotland’s economic growth through improved procurement practice.

Test run of business forms

10. No new business forms will be brought in with the implementation of the proposed legislation.

Legal Aid Impact Test

11. The Job Grant relates to employment support and will delivered by use of a Section 63 Order. A Section 63 Order will extend to Scottish Ministers the existing functions of the Secretary of State relating to employment support under Section 2 of the Employment and Training Act 1973. A Section 63 Order does not give the Scottish Parliament the power to legislate in connection with the Job Grant. The legislative competence of the Scottish Parliament will remain unaltered. This is because the Section 63 Order only allows Scottish Ministers to share the competence of the Secretary of State under section 2 of the Employment and Training Act 1973. Section 2 of the Act only enables schemes to be run administratively.

12. There will be no appeal rights for the Job Grant, for example to tribunal or the Sheriff Court as Job Grant is being delivered as an administrative scheme. However, if an applicant is not satisfied with any aspect of the service they receive from Social Security Scotland a complaint process will be in place.

Enforcement, sanctions and monitoring

13. The Scottish Government will put in place a monitoring and evaluation process for the Job Grant prior to implementation. Once live, on-going engagement with key stakeholders will also provide the Scottish Government with an opportunity to monitor the impact of the policy. The Scottish Government will collate and publish management information on the Job Grant.

14. Audit Scotland will monitor and report on the delivery of the social security system, including Social Security Scotland. Audit Scotland will continue to report on the Scottish Government's progress in delivering the social security powers as the programme develops.

Question 14: Are you aware of any impacts on businesses which are not identified here? Y/N

Question 15: If yes, please provide details