Scotland Act 2016 implementation: eighth annual report

7. Social Security

Part 3 of the Scotland Act 2016 contains 14 Sections relating to social security and employment support.

The Scottish Government is responsible for the implementation of these powers, ensuring the safe and secure transition of the benefits being devolved to Scotland and the design of new benefits as part of a Scottish social security system with dignity, fairness and respect at its heart. To achieve this, the Social Security Programme was established and a new agency, Social Security Scotland, created.

Social Security Scotland operates in accordance with the eight principles set out in the Social Security Charter and Social Security (Scotland) Act 2018. This sets the framework to ensure that social security in Scotland meets the needs of Scottish citizens.

Social Security Scotland is now successfully delivering fourteen benefits, and will provide support worth over £6 billion to over 1.2 million people in 2024-25.

Costs

67. The costs set out in Table 7.1 have been updated following last year’s report and are either audited outturn or budget. Social Security Scotland includes a range of administration and operational costs to support the delivery of payments and services. The work that the Scottish Government undertakes is funded from the Advice, Policy and Programme budget line within the Scottish Government’s Social Justice Portfolio. The table shows the Resource and Capital costs of the work that the Scottish Government undertakes, including the Implementation Costs of the Social Security Programme. The figure excludes the allocated share of the Scottish Government’s Corporate Running Costs and ring-fenced non-cash Depreciation.

68. A more detailed breakdown can be found in the updated Social Security Programme Business Case (PBC), published in February 2023.^[20] The costs detailed in the PBC reflect the necessary changes stemming from the pandemic including an additional year of delivery to support safe and secure benefit delivery and case transfer the awards of around 700,000 clients from DWP to Social Security Scotland, as well as adding the Scottish Child Payment extension into the Programme and providing increased functionality for our most complex benefits.

69. The PBC provides a view on the whole-life costs and benefits of the Scottish Government’s Social Security Programme, over a 30-year timeframe to 2050. It shows the Scottish Government’s investment in creating a new public service for Scotland, co-designed by those with lived experience and built from scratch with dignity, fairness and respect at its heart, which will deliver for the people of Scotland for years to come.

2023-24 Developments

70. Executive competence for Carer’s Allowance transferred to the Scottish Government on 1 September 2018, and for Attendance Allowance, Disability Living Allowance, Personal Independence Payment, Industrial Injuries Scheme, and Severe Disablement Allowance on 1 April 2020. The Department for Work and Pensions (DWP) continues to administer these benefits through Agency Agreements on behalf of Scottish Ministers, while Scottish benefits are launched and cases transferred from DWP. For 2023-24, Social Security Scotland has budgeted £25.7 million for Formal Agreements. The Formal Agreement costs that the Scottish Government accepts from the DWP are scrutinised to ensure validity, consistency and compliance with jointly agreed inclusions and exclusions. Formal Agreement costs will reduce over time as Social Security Scotland administers new Scottish benefits replacing the DWP benefits.

71. The Scottish Government funds implementation costs incurred by the UK Government as a result of the devolution of welfare powers. For 2023-24 we have budgeted £12.3 million for implementation recharges.

The Social Security (Scotland) Act 2018

72. The over-arching framework for use of the Scottish Government’s Social Security powers is set out in the Social Security (Scotland) Act 2018. The rules relating to individual benefits are set out in regulations made under enabling powers in the 2018 Act. In 2023-24 regulations have been made covering the introduction of Carer Support Payment, extension of Best Start Foods and data sharing for the purposes of safeguarding. In addition, regulations were amended relating to disability assistance and the annual legislation was laid relating to the uprating of devolved benefits.

73. The Social Security (Amendment) (Scotland) Bill was introduced to the Scottish Parliament on 31 October 2023. Some parts of the Bill seek to amend or repeal sections of the 2018 Act, and others seek to create new provisions in that Act. In line with the Scottish social security principles the policy intention is to create efficiencies, remove barriers and empower people interacting with Social Security Scotland. Subject to progress through Parliament, the earliest commencement of the Bill is likely to be Spring 2025.

Social Security Scotland

74. Social Security Scotland was established to deliver on Scottish Ministers’ obligations under the 2018 Act and the Agency delivers its services in accordance with the eight principles set out in the Act and a Social Security Charter. The Agency is founded on the values of treating people with dignity, fairness and respect.

75. In November 2023 Social Security Scotland published its annual Client Survey, covering the period from April 2022 to March 2023, which showed that people continue to have a very positive experience of Social Security Scotland. 88% of people responding to the survey said their overall experience was ‘very good’ or ‘good’; and 93% of people who had been in touch with a member of staff at Social Security Scotland reported that they had been treated with kindness.

76. Social Security Scotland directly employed over 3,800 Full Time Equivalent staff across its various sites as at 31 December 2023. It delivered over £5 billion of benefit payments in 2023-24; £3.2 billion through Agency Agreements and around £2 billion directly. Further details of this spending will be provided in Social Security Scotland’s Annual Report and Accounts for 2023-24, which will be published in November 2024, in accordance with statutory timescales.

77. With the launch of Carer Support Payment in November 2023, Social Security Scotland’s service has now expanded to fourteen separate benefit payments, seven of which are entirely new forms of financial support available only in Scotland. Social Security Scotland will continue to build capacity and capability with a focus on efficiency in 2024-25 as it prepares for the launch of the remaining Scottish Government benefits.

Benefits Launched

78. During the reporting period we have introduced Carer Support Payment, our replacement for Carer’s Allowance, with a pilot launch in November 2023. The Payment will be opened up for new applications in further local authority areas in 2024, and be available nationally by the autumn. Carer Support Payment will provide an improved service, designed with carers to meet their needs, in line with our principles of fairness, dignity and respect, and extends eligibility to many full-time students who are unable to access Carer’s Allowance.

Case Transfer

79. A joint project between the DWP and the Scottish Government is transferring the disability and carer benefit awards of around 700,000 people in Scotland to Social Security Scotland and onto new Scottish forms of assistance.

80. We have safely and securely transferred the awards of more than 150,000 people already, amounting to over £620 million in payments since October 2021. We have now completed transferring all Disability Living Allowance for Children awards for children and young people in Scotland to Child Disability Payment. After a small pilot in June, we began transferring Personal Independence Payment awards to Adult Disability Payment from 29 August 2022. We also began selecting Disability Living Allowance awards for transfer where the person would have otherwise been required to apply for Personal Independence Payment on this date.

81. Transfer from Carer’s Allowance to Carer Support Payment began in February 2024 and transfer from Attendance Allowance to Pension Age Disability Payment and Disability Living Allowance to Scottish Adult Disability Living Allowance will begin in 2025. We remain on track to meet our aim of completing case transfer for all disability and carer benefits in 2025.

Scottish Government policy development and implementation

82. During the reporting period we have launched the Carer Support Payment pilot and continue to develop systems and capability to support delivery of the remainder of the devolved benefits outlined in the Social Security (Scotland) Act 2018.

83. The Scottish Government uprated all Scottish social security payments by 6.7% in April 2024. This uprating includes payments where there is a statutory requirement, as well as those where uprating is discretionary, in recognition of the continuing challenges faced by many due to the increased cost of living.

84. Further work on benefit delivery is also underway and we continue work with DWP to deliver the remaining devolved benefits.

Future plans

85. We will continue the roll out of Carer Support Payment, our replacement for Carer’s Allowance, making this available for new applications in further local authorities in 2024, to be available nationally by the autumn. Our consultation on the benefit ran from February until May 2022, and we published our response on 27 March 2023, setting out our plans for Carer Support Payment from launch and future improvements. Carer Support Payment will provide an improved service, designed with carers to meet their needs, in line with our principles of fairness, dignity and respect, and extend eligibility to many full-time students currently unable to access Carer’s Allowance.

86. Adult Disability Payment is now available across all of Scotland. We are committed to undertaking an independent review of Adult Disability Payment commencing this year. A Chair has now been appointed to lead this review. A consultation about the eligibility criteria for the mobility component of ADP was undertaken and its findings published last year, and the ADP Review will consider these in its work.

87. Pension Age Disability Payment will replace Attendance Allowance, a benefit for people aged over state retirement age, with a pilot beginning from Autumn 2024. Attendance Allowance is awarded to help with extra costs if a disabled person needs someone to look after them. It is the Scottish Government’s intention to provide this form of assistance for the same purpose – to mitigate costs associated with care needed as a result of being disabled.

88. Employment Injury Assistance (EIA), which replaces the UK Government’s Industrial Injuries Scheme, will be one of the most complex disability benefits to deliver. In the next few months we intend to consult on the subject of EIA and the replacement of the current UK Government Industrial Injuries Disablement Benefits. The consultation will consider a range of issues relating to the delivery and administration of EIA.