Social security agency in Scotland: outline business case
Collection of the analysis and evidence behind the Ministerial Statement on Scotland's social security agency, made on 27 April 2017.
4. Socio-Economic Case
4. The complexity of social security and the nature of the delivery options means that it is difficult to distinguish between them by monetising the benefits and comparing with the costs in a standard way. Initial analysis is able to apply standard Her Majesty's Treasury ( HMT) Green Book techniques to place a monetary value on the overall delivery of social security which can be compared with the costs to generate a Net Present Value ( NPV) and Benefit cost Ratio ( BCR). See section 5.4. However, this approach is unable to capture the differences the different delivery options make to the delivery experience of the Scottish public.
4.1. Instead, Multi-Criteria Analysis ( MCA) has been used to as the primary method to compare the options. MCAs are often employed when a decision has to be made based on a large amount of qualitative evidence and provides a transparent framework for decision-making. In applying MCA techniques, we have followed HM Treasury's Supplementary Green Book Guidance. More detail on MCAs is provided on HM Treasury's website [14] .
4.2. Note that for cost purposes there are two versions of option 2 with one having some local elements but with a large head office and the other very local with a smaller head office. This is to tease out the implications of different structures on costs. These are treated as a single option in terms of the socio-economic case as there is not enough to meaningfully distinguish between them.
4.1 Standard HMT approach
4.3. DWP expenditure on devolved social security benefits in Scotland was around £2.8 billion in 2015-16. DLA, PIP, AA, CA and WFP combined, accounted for £2.6 billion (93%) of this total spend. Whilst these benefits are non-means tested and therefore primarily not aimed at the redistribution of resources or alleviating poverty, nonetheless Figure 9 shows that more is spent on households in the bottom five deciles of the income distribution (£1.7 billion) as opposed to the upper five deciles (£0.9 billion).
4.4. Annex E of the Green Book details the approach used in this section. The fundamental economic principle of 'diminishing marginal utility' dictates that the additional utility or 'true value' that a person derives from an increase in their income ( i.e. though social security benefits) diminishes as level of income they have increases. Therefore, it is recognised that the 'true value' of social security benefits (as well as other forms of additional income) for an individual's well-being will vary according to the relative prosperity of the person receiving the benefits.
Figure 9 - Social Security Spending by Income Deciles
4.5. HM Treasury guidance proposes a standard methodology for analysing the 'true value' of public spending so that any proposed policy which provides greater net benefits to lower income deciles is rated more favourably than one whose benefits largely accrue to higher deciles. According to this methodology, appropriate decile weights are derived by comparing the median equivalised net income within each decile to the median equivalised income across the whole income distribution [15] . The results mean, for example, that an additional £1 of spending on someone in the lowest decile corresponds to £2.45 of 'true value', whilst an additional £1 of spending on someone in the highest decile corresponds to only an additional £0.40 of 'true value'.
Table 4 - Weighting Social Security spending by Relative Prosperity
| Deciles | 'True value' of £1 of additional income | Actual Spend (£ millions) |
Weighted Spend (£ millions) |
|---|---|---|---|
| 1 | 2.45 | £159 | £389 |
| 2 | 1.67 | £281 | £471 |
| 3 | 1.41 | £362 | £509 |
| 4 | 1.23 | £425 | £521 |
| 5 | 1.07 | £433 | £462 |
| 6 | 0.93 | £360 | £335 |
| 7 | 0.81 | £256 | £206 |
| 8 | 0.69 | £174 | £120 |
| 9 | 0.57 | £95 | £54 |
| 10 | 0.40 | £61 | £24 |
| Total | - | £2,607 | £3,091 |
4.6. Table 4 shows that through using these 'true value' weights, a comparison of the actual spending on social security (£2.6 billion) to the weighted 'true value' spend (£3.1 billion) is possible. Therefore, simply as a result of the income distribution of benefit recipients, social security is worth around an additional £500 million to Scottish households each year. This £500 million benefit would be foregone in the absence of a social security system for the devolved benefits. This figure is constant across all options and is combined with the steady-state costs in section 5.4 no provide a basic, but comparable, measure of the value of the agency. Figure 10 shows how the spending on social security across deciles compares when weighted for the relative prosperity of households.
Figure 10 - Actual and Weighted Social Security Spending
4.7. The redistribution of £2.6 billion from general taxpayers to recipients of social security benefits cannot be a costless and efficient transfer of resources from one group in to another. Therefore, to some extent, the £500 million of additional value generated by social security spending is offset by a number of costs. These are referred to in economics as 'leakage' [16] and there are four potential source of this:
- The administrative costs associated with redistributions of resources.
- Behavioural changes in the population who face new work incentives because of increased taxation to fund social security.
- Changes in saving and investment behaviour, for example take-up of long-term care insurance.
- Changes in attitudes, for example, to the formation of human capital or the propensity for altruistic behaviour.
4.8. An assessment of administrative costs related to options for the social security system is outlined in this business case. Other costs are more challenging to estimate and are not investigated in this business case.
4.9. Undoubtedly, there are other benefits to social security benefits as well beyond the £500 million which has been identified. For example, the payment of Carer's Allowance to support informal carers, reduces the costs of providing equivalent formal personal home care and disability benefits are often vital in supporting people with disabilities to enter and maintain employment, which is ultimately a net benefit for society. Given these considerations, it is likely that, even talking into account the costs of the social security system, the economic value of social security is greater than its cost. But there are difficulties in placing monetary values on these benefits. It is this that drives the use of multi-criteria analysis to examine the advantages and disadvantages of the options as a way of helping to choose between them.
4.2 Using Multi-criteria Analysis to select the best options
4.10. Multi-criteria analysis ( MCA) refers to a set of techniques for comparing policy options without assigning monetary values to their impacts. MCAs are a good alternative to Cost-Benefit Analysis (used widely across the public sector) where there is insufficient information about monetary values or deriving those is impractical. See HM Treasury's Green Book Supplementary Guidance [17] . Full details of the rationale for choosing MCA and the full results can be found in Annex B.
4.11. The exercise considered how the six options compared against a framework of criteria that had been selected to ensure that the chosen social security system in Scotland meets the outcomes sets out in the Creating Fairer Scotland paper, as well as outcomes that have been set out in other Scottish Government strategy documents.
4.12. The starting point for selecting criteria was the Creating a Fairer Scotland - A New Future for Social Security in Scotland paper published in March 2016 [18] . As much as possible, the outcomes and principles for Social Security that were mentioned in the paper were translated into criteria for the delivery system options. This meant that some of the outcomes and principles that were only related to policy were not considered.
4.13. Sources for criteria also included other Scottish Government strategy documents, which included the Scotland's Economic Strategy [19] , Regeneration Strategy [20] and Scottish Transport Appraisal Guidance [21] .
4.14. Stakeholders (internal and external) have been asked to comment on the draft set of criteria and their input is reflected in the final set of 27 criteria. It was decided that the final set of criteria would be grouped into five sets and each option's performance would be assessed against each of the 27 individual criteria as well as each of the five broad sets. The full list of criteria and their assignment to broad sets is shown in Figure 11.
Figure 11- Full list of criteria and their groupings
Dignity and Respect
1 Flexibility, choice and communication
2 Simplicity and support alignment
3 Assessments
4 Governance and accountability
5 Organisational culture
6 Public perception of claimants
Equality and Poverty
7 Interaction with various groups
8 Take up
9 Income and poverty
10 Consistency and fairness
Efficiency and Alignment
11 System efficiency and flexibility
12 Alignment with reserved benefit system
13 Alignment with other public services
14 Control
15 Transparency
Implementability and Risk
16 Scale of change
17 Timescales
18 Risk
19 Public perception of system
Economy , Society and Environment
20 Assessment employees
21 Non-assessment employees
22 Regeneration
23 Impact on private sector
24 Impact on third sector
25 Impact on public sector
26 Resource consumption
27 Travel and transportation
4.15. Each of the individual criteria was used to rank the six options in terms of their strength in meeting the criteria in a positive way. It should be noted that no specific scores were attached to options - all rankings were relative. For example, in some cases the differences between options were found to be marginal and in other cases they were found to be significant. To quantify the differences would have added another layer of complexity to the exercise and there was insufficient information available to justify such precision. Hence simple rankings, where options were placed in a certain order depending on whether they were better or worse than every other option, were employed.
4.16. The rankings of options against each individual criterion are based on a number of different sources of information, which include the response to A New Future for Social Security - Consultation on Social Security in Scotland, separate stakeholder engagement processes and internal expertise.
4.17. Section 4.3 to section 4.7 discuss each of the 27 criteria in turn and provides the reasoning behind assigned rankings. These are used to create rankings against each of the five broad criteria sets and the approach to doing this is described in section 4.8.
4.3 Dignity and Respect
4.18. The following outcomes set out in "Creating a Fairer Scotland " were used to create the Dignity and Respect criteria set
Outcomes:
People applying for or in receipt of Scottish benefits are:
- treated with dignity and respect
- can access help and advice to claim the benefits they are entitled to
- supported throughout the application assessment process
- given a reasonable choice about how their benefits are administered
- have positive experience of the Scottish social security system
People resident in Scotland:
- have an awareness of benefits and who and what they are for
- view the benefit and those who receive them positively
Dignity and Respect
1. Flexibility, choice and communication
2. Simplicity and Support Alignment
3. Assessments
4. Governance and accountability
5. Organisational culture
6. Public perception of claimants
4.3.1 Flexibility, choice and communication
4.19. This criterion looks at the users' experience of interaction with the social security system and how well each option would allow the system to be tailored to each individual claimant. This includes the availability of information about entitlement that is clear and consistent , application channels that are suited to users' preferences and needs at different stages of the process, including pre-claim, processing and post-award stages.
4.20. Much of the evidence gathered in the process of appraisal and consultation highlighted that face-to-face contact between claimants and agency employees has to be made available. This is especially pertinent in both the initial stages of the application process, and in cases where errors or disputes arise. Therefore, the performance of options 1 and 4, which do not provide for any face-to-face contact is weakened. However, both still perform relatively well because they have certain other strengths against this criterion.
4.21. For example, for claimants comfortable with digital technology, face-to-face support could be provided via video calling, or a 24-hour chat helpline, with staff specifically trained to provide support in such a manner. Options 1 and 4 would aid in delivering a consistent experience for claimants that would be more difficult in other options. Options 1 and 4 could also incorporate features such tracking progress of the claim online that can be updated frequently. Although some of these features could still be incorporated under option 2, more of these additional features can be included and can be made more effective under options 1 and 4, with more resource being dedicated to the digital and phone services. It is likely that many claimants who prefer phone and online communication would receive a faster service.
4.22. Options 1 and 4 also allow for greater privacy. Stigma is a big factor in reduced take-up and an increased reliance on local support could disadvantage people in smaller communities, some of whom may prefer online and phone application channels direct to a central agency to maintain confidentiality.
4.23. Option 4 provides an additional choice for the claimant to receive their benefit as an 'in kind' payment rather than cash. The consultation highlighted that cash is seen as the best default option to allow people choice and flexibility, and where goods or vouchers are provided this should be optional. In option 4, in kind payments are optional, which lowers the risk of this being interpreted that people are incapable of managing their own finances. Optional in kind provision may be valued by some claimants as recognising their specific needs and removes the burden of having to 'shop around' for goods and services they need. If these can be provided at a lower cost by the agency, it would widen the choice and flexibility of the system and hence option 4 is ranked higher than option 1.
4.24. In terms of the options that provide face-to-face support, option 2 has the advantage of local offices still being part of the agency and not being tied to existing application channels as under option 3. This would make it easier to incorporate flexibility and choice into the system from its inception rather than adding new choices into an existing set up. It would also be more difficult to ensure that the same choice and flexibility would be provided to claimants living in different Local Authority areas. For example, there is currently a significant level of variation in terms of channels of application across Local Authorities for the Scottish Welfare Fund payments [22] .
4.25. Generally, the more removed the local offices are from the overarching governance of the agency, the less scope there would be to ensure that application channels align with users' needs, which means that option 5 did not perform particularly well on this criterion.
4.26. Option 6 has advantages over other options in that it would provide access points to the benefits system via a wide range of public services with which the claimant may already be interacting with regularly. However, due to the complexity of option 6, the central agency could face challenges in monitoring the channels that are available to the claimant and as with option 3, changes may be difficult to implement in an existing system.
4.27. There is already existing complexity in the system in terms of advice and information provision. A central agency that delivers a consistent advice and support service in a centralised fashion minimises the number of points of contact for the claimant. It is recognised that local offices in option 2 may add a degree of confusion as they would be sitting alongside Jobcentre Plus offices as well as Local Authority offices and Citizen Advice Bureaus. However, due to the presence of face-to-face support and this support being provided by the agency itself, option 2 comes out as the most preferable in terms of flexibility and choice.
4.28. The highly digitalised systems in options 1 and 4 are likely to incorporate channels that will not be available in the local office based options and hence also perform well on this criterion. Options 1 and 4 assume comprehensive phone support, which mean that claimant would not necessarily have to apply online as it is recognised that a "digital by default" approach would limit access to the system for some [23] . However, the absence of face-to-face option in options 1 and 4 rank them lower than option 2.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 1 | Flexibility, choice and communication | 2 | 4 | 1 | 3 | 5 | 6 |
4.3.2 Simplicity and support alignment
4.29. This criterion measures the extent to which the new Scottish social security system can help people understand their entitlement to devolved benefits and how this fits into their existing interaction with the reserved social security provision and public services.
4.30. A significant number of people who receive the devolved social security payments also receive the benefits that will remain reserved. For example, many recipients of Personal Independence Payments or Disability Living Allowance, which will be devolved, also receive Employment Support Allowance which will remain reserved. From claimant's perspective, advice and support on both devolved and reserved benefits would be aligned to provide a simple and accessible route for obtaining information about both.
4.31. Option 3 and 6 perform well against this criterion. Many Local Authorities already provide welfare rights advice and support and can expand this function to provide more comprehensive service for devolved benefits. A similar structure could operate with option 6. For example, there are welfare rights advisers already providing support in some GP surgeries. Hence it is possible to set up a system under option 3 or 6 where people visit their Local Authority offices or GP practices and receive advice and support on all benefits they are claiming rather than just devolved benefits. It may be that advice and support would be provided by different staff but being in the same premises or working for the same organisations would help align support.
4.32. Options 1, 2 and 4 perform weakly on this criterion. With all functions sitting with the central agency, there is a risk of complete separation of advice and support for devolved and reserved benefits. This could result in increased complexity for claimants, who would find it confusing to have to navigate the different structures to receive advice on different benefits they are claiming. This is offset to an extent by the agency taking on discretionary benefits under options 1, 2 and 4 and hence being able to provide support in relation to those benefits.
4.33. Under option 2, there is a possibility for co-location of local offices near Job Centre Plus, Local Authority and GP practice offices. This is not possible under option 1 and 4 because the advice and support are provided over the phone and online by the central agency.
4.34. Option 4 has the added complexity where claimants may need additional support to help them choose a cash or in-kind benefit. This is likely to complicate the advice and support landscape and cause confusion.
4.35. Option 5 is considered to be the weakest option. With a private sector organisation taking over the advice and support functions, there would be limited incentive to ensure that this is aligned with the services that are provided in relation to reserved benefits, unless this is specifically written into the contract. This could be less of an issue, however, if the contract is awarded to a third sector organisation who already operate advice and support services.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 2 | Simplicity and support alignment | 3 | 6 | 2 | 1 | 4 | 5 |
4.3.3 Assessments
4.36. This options appraisal assumes that the assessments policy (the process by which eligibility for each of the benefits is determined) is the same under all options. A form of assessment is part of the process for claiming disability benefits for at least some of the claimants and the criteria against which the claimant is assessed are the same. This assumption is necessary to compare the different options against each other from the delivery perspective.
4.37. Under option 1 and 4, assessments are done by a mobile workforce, who assess people in their home or in a location of their choice (for example, local third sector organisation premises). Under option 2, assessments are mostly done in the agency's local offices, although outreach services are provided for people who have mobility difficulties. Under option 3, the assessments are done by Local Authorities' employees in their existing offices. Under option 6, assessments are done by the NHS in either GP surgery or hospital premises. Assessments in option 5 would depend on the organisation which is awarded the contract. If the organisation already had local offices, as some third sector organisations do for example, they are likely to take place there. A private sector organisation may lease local premises (as in option 2) or provide outreach workforce (as in options 1 and 4).
4.38. Under all options the agency is the final decision maker but under option 2 the decision makers are based in the local rather than central office.
4.39. Currently assessments for disability benefits are outsourced to private organisations by DWP and this part of the system is most similar to option 5. The public perception of these companies is generally negative, due to media reports of negative experiences of claimants, although some are in relation to Employment and Support Allowance "fit to work" assessments, which will remain reserved.
4.40. It should be acknowledged that when awarding the contract, the Scottish Government will have the freedom to specify how it wants the assessments to be conducted and the successful contractor would be in breach of contract if deviates from the contract's terms and conditions. For example, the consultation highlighted that a target based model is a large factor in driving the negative perceptions around the current system of assessment, hence a move away from targets could alleviate some of the concern around involvement of another organisation. A well specified contract could in theory achieve the Dignity and Respect objectives but ensuring this is more difficult under this option.
4.41. From the Dignity and Respect perspective, there is however also the issue of private organisations being awarded contracts to make profit from assessing disabled people, which can be perceived negatively by some claimants. It is worth considering, however, that option 5 also incorporates the option for awarding the contract to a third sector or another public organisation, where this dimension is not relevant.
4.42. Considering the points above, option 5 is the weakest in terms of the Dignity and Respect aspect of assessment.
4.43. Option 6 assumes that assessments are being done largely by the NHS. In the responses to the consultation a common theme was that assessment should be done by professionals who understand the conditions of the people they are assessing and some responses highlighted a need for the NHS to play a greater role. It should be noted that option 6 does not assume that the assessments would necessarily be done by the existing healthcare professionals employed by the NHS, such as doctors and nurses, but only that the assessors will be employed by the NHS. This option allows better alignment of the assessment process with the healthcare services and assumes much easier access to the claimant's existing healthcare record which should allow for better decision making on awards. The consultation highlighted that information about claimants' conditions that is already held should be used as much as possible in the process of assessments. Most claimants would be assessed on NHS premises, which has the potential to shift public perception about assessments, building on the existing trust in the NHS. [24] This option is the strongest in terms of the Dignity and Respect for the claimants in relation to assessments.
4.44. Among other options option 1 and 4 are considered weak because of the lack of permanent local premises where the assessments could be conducted. Some of the consultation responses have highlighted that home assessments may be preferable but it is likely that people would have different preferences and having the choice is the important factor. Also, travel requirements for a very mobile workforce without a fixed location could have a negative impact on the employee job satisfaction and morale which could have a knock-on impact on their interaction with the claimant (see criterion 20). However, on the other hand by not having local offices, more resource can be dedicated to training and recruiting assessors with appropriate medical expertise under these options.
4.45. Option 2 and 3 would both have most assessments taking place in fixed locations. Under option 2 however, the award decision would made by the staff in local offices, whilst under option 3 the central agency would retain the decision-making power. There is a risk of reduced consistency in terms of how the assessment criteria are applied in each Local Authority which could result in variations across local authorities. It is also deemed more advantageous to have decision-making and assessments done by the same organisation, which only options 1, 2 and 4 provide. Decision making 'on site' as under option 2 would establish a clear link and quicker and more transparent decision making, with consistency ensured by the overarching governance provided by the central agency.
| Criteria | Strongest | 2nd | 3 rd (equal) | 5th | Weakest | ||
|---|---|---|---|---|---|---|---|
| 3 | Assessments | 6 | 2 | 1 | 4 | 3 | 5 |
4.3.4 Governance and accountability
4.46. This criterion refers to the extent to which the governance of the social security system is made inclusive, accountable and responsive to change. This refers to the ease with which groups affected by the payments administered by the system could be involved in its decision-making processes, including the ease of ensuring that these groups are represented in the governance structures. It also refers to the ease and speed with which any system failures could be traced back through the system's processes and the time it takes to change these processes in response.
4.47. Performance on this criterion is largely influenced by the simplicity and transparency of the system under each option and unsurprisingly the scoring of the options for this criterion is similar to criteria 11 (Efficiency and Flexibility) and 15 (Transparency). This criterion however sits in the Dignity and Respect dimension and looks at the advantages and disadvantages of simplicity, transparency and efficiency from the claimants' rather than agency's perspective.
4.48. Options 1 and 4 are the simplest in terms of the system structure, with most functions sitting within the central agency. This makes it easier to ensure diversity of its governance structures and makes the system more transparent, facilitating accountability. option 2 would exhibit the same features but placing some of the functions and decision-making in the local offices would add a layer of complexity.
4.49. At the other end of the scale are options 6 and 3, where other public services and Local Authorities, with their own governance structures are part of the system. This can result in a much more complex system of governance and decision making and as a result dilute accountability. Any system failures and errors are likely to be more difficult to trace under these options and even more difficult to correct. This would have a knock on impact on claimants' experience of the system, especially in the cases where a dispute arises. In terms of ensuring diversity and inclusiveness of governance, some of this would be outside of the control of the agency and more difficult to put in place.
4.50. Although the system structure of option 5 is less complex, it still incorporates an additional organisation in the system and the arguments above apply, although perhaps to a lesser extent assuming a well specified contract.
4.51. In the case of assessments, in options 3, 5 and 6 there is a separation between the organisation that conducts the assessments and the organisation that makes the decision on the claim (the agency). The same applies to option 5. From the claimants' perspective of transparency and accountability, this separation weakens the ability and speed with which decisions can be challenged, errors traced and processes changed.
| Criteria | Strongest | 3rd | 4th | 5th | Weakest | ||
|---|---|---|---|---|---|---|---|
| 4 | Governance and accountability | 1 | 4 | 2 | 5 | 3 | 6 |
4.3.5 Organisational Culture
4.52. This refers to the ease and the likelihood of success of incorporating a specific type of culture into the system of delivery for social security in Scotland. Although this refers to the process of establishing any culture, the desired culture is currently assumed to be in line with the principles set out in Creating a Fairer Scotland, A New Future for Social Security in Scotland. More specifically these are:
- Principle 1: Social security is an investment in the people of Scotland
- Principle 2: Respect for the dignity of individuals is at the heart of everything we do
4.53. Options 1 and 4 represent the most centralised systems, with the simplest structure of governance, followed by option 2. The simpler the organisation structure, the easier it is likely to be to implement cultural change and clear lines of management and responsibility allow messages from the executive team to travel across the organisation quicker and easier.
4.54. With options 1, 2 and 4, most of the social security system sits within the agency, which would be a new organisation with no pre-existing culture to be changed. Hence these options perform stronger on this criterion. There is unlikely to be any substantial difference between options 1 and 4. Option 2 represents an added complexity with some of the decision making sitting within local offices, hence making any messages around culture somewhat more difficult to be fed down to claimant-facing staff than for example the call centre workers or digital team in a central agency. Options 1 and 4 have the advantage of having most of the workforce in one or two locations, which could make training and team building exercises easier to implement, creating a better work environment and therefore culture.
4.55. Options 1 and 4 however, perform poorly on job satisfaction of the assessments workforce (see Criterion 20) because of its highly mobile nature and a significant level of travel involved. This could have a knock on effect on employee morale and therefore culture of the only agency employee that have face-to-face contact with claimants.
4.56. Because it is challenging to write in specific culture requirements into procurement contracts and SLAs, option 5 is considered to be the weakest against this criterion. This ranking is also influenced by the controversy around the current approach to assessments by private contractors (see Criterion 3). Whilst contracts and organisations differ, this option represents the highest risk in terms of delivering the Principles set out above.
4.57. Option 3 and 6 include existing local authorities and public services, with their own culture. If these needed to change to align better with the Principles for social security, it could represent an additional challenge. Under option 3, compared to option 6, there is an added complexity of variation across the various LAs.
| Criteria | Strongest | 2 nd (equal) | 4th | 5th | Weakest | ||
|---|---|---|---|---|---|---|---|
| 5 | Organisational culture | 2 | 1 | 4 | 6 | 3 | 5 |
4.3.6 Public perception of claimants
4.58. This criterion assess how well the options perform on changing public attitudes toward social security payment recipients.
4.59. The Scottish Social Attitudes survey found that in 2013, 75% of people agreed that 'large numbers of people these days falsely claim benefits'. The British Social Attitudes Survey in 2012 suggest that between 35% and 37% thought 'claimants should be somewhat ashamed', and between 11% and 13% thought 'claimants should be very ashamed'. [25]
4.60. A large part of Social Security Principles 1 and 2 is changing public attitudes to benefit claimants. Part of this is linked to the ability to introduce new organisational culture which would itself have a knock-on impact on public perception of benefit claimants. Hence option 5 and 3 perform as weakly against this option as they do against the criterion 5.
4.61. Unlike under criterion 5, option 1 ranks better than option 2 because resources could be better concentrated in the central agency to make a unified effort to change people's perceptions. This could also be easier to achieve without visible local offices, which could lead to stigma (see criterion 1). Option 4 performs better than option 1 because benefits in-kind will be perceived by the wider public as addressing a specific need. A more heavy reliance on in-kind provision would minimise the likelihood that benefits are perceived by the public to be used to meet needs other than what they are provided for.
4.62. Option 6 scores highly against this criterion because if a large part of the benefit system is delivered by the NHS, benefits would be more likely to be seen as part of the wider free healthcare service even if they are provided in cash. This argument may break down when we look at other public services that may be integrated into the system such as schools and prisons. However, because of the current composition of devolved benefit spend, which largely sits in disability benefit spending, it is right to focus on the NHS for this exercise.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 6 | Public perception of claimants | 4 | 6 | 1 | 2 | 3 | 5 |
4.3.7 Dignity and Respect - Summary Table
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 1 | Flexibility, choice and communication | 2 | 4 | 1 | 3 | 5 | 6 |
| 2 | Simplicity and support alignment | 3 | 6 | 1 | 4 | 2 | 5 |
| 3 | Assessments | 6 | 2 | 1 | 4 | 3 | 5 |
| 4 | Governance and accountability | 1 | 4 | 2 | 5 | 3 | 6 |
| 5 | Organisational culture | 2 | 1 | 4 | 6 | 3 | 5 |
| 6 | Public perception of claimants | 4 | 6 | 1 | 2 | 3 | 5 |
4.4 Equality and Poverty
4.63. The following outcomes set out in Creating a Fairer Scotland were used to create the Equality and Poverty criteria set
Outcomes:
Scottish benefits:
- target the right people and seek to impact on poverty and inequality
- make a positive difference to recipients
- are paid to as many of those who are entitled to them as possible whilst minimising fraud and errors
People in receipt of Scottish benefits and their families are enabled to have:
- an increased sense of control and empowerment over their lives
- an increased sense of confidence and security
Equality and Poverty
6. Interaction with various groups
7. Take-up
8. Income and Poverty
9. Consistency and fairness
4.4.1 Interaction with various groups
4.64. This criterion looks at how well the social security system under each option would interact with groups who have specific needs as well as equality groups.
4.65. Groups with specific needs include for example, those who have physical or mental disabilities and hence require tailored assistance when interacting with the social security system. Given that the majority of spending on devolved benefits is accounted for by disability payments, there is likely to be a high proportion of people who would be best assisted by a specially trained professional.
4.66. Under option 1 and 4, resources could be concentrated on ensuring that the central agency meets these requirements, with specially trained staff who could assist people over the phone or provide online support. Doing most assessments through home visits under option 1 could be more suitable for those with specific needs. However, it should also be considered that for those who do not feel comfortable with home visits, the absence of permanent local premises where assessment can be undertaken is a substantial downside.
4.67. Option 2 implies less specialisation of staff in local offices to manage the vast number of different needs within the claimant population. Because of the emphasis on face-to-face interaction for everyone and the resources taken up by this, phone and online support under option 2 would be less tailored to individual's needs. The same argument can be applied to option 3, although this option could be weaker than option 2 because it may be more difficult to deliver consistency across Local Authorities and changes would have to be made to existing systems.
4.68. Inconsistencies could also arise under option 6, where there is an added complication that the nature of claimants' interaction with the social security system would depend on which public services they were using to access the system. On the one hand, option 6 has the advantages of many people accessing the system through public services they are already familiar with. However, ensuring consistency across different types of public services is likely to be more challenging that in options 1, 2 and 4.
4.69. Under option 5, ensuring consistent and inclusive interaction with various groups would require a well-specified contract. The experience with the current system suggests that this would require a different approach to the way DWP awarded contracts for functions such as assessments are specified.
| Criteria | Strongest | 3rd | 4th | 5th | Weakest | ||
|---|---|---|---|---|---|---|---|
| 7 | Interaction with various groups | 1 | 4 | 2 | 6 | 3 | 5 |
4.4.2 Take up
4.70. This criterion looks at the ability of each option to increase the take up of devolved benefits, as set out in the outcomes for social security in Creating a Fairer Scotland. Take up of benefits is influenced by a number of factors, including stigma, ease of claiming, awareness of entitlement and the level of benefit. It is important to note that since this analysis is about the delivery of social security, the criterion is measuring how the take up would be influenced by the system itself, assuming that policy, such as the level of benefit paid, is the same under all options.
4.71. From the ease of claiming and awareness perspective, the discussion of options performance on criterion 1 (flexibility, choice and communication) provide some guidance, as more flexibility and choice and better communication should increase take up. From the point of view of stigma, the discussion under criterion 6 (public perception of claimants) can be expanded upon. Hence, the performance against the take up criterion is an amalgamation of the rankings of options against these two criteria.
4.72. Option 5 performs weakly against criteria 1 and 5 because providing consistency in choice and communication is more difficult with a large part of social security system sitting outside of the agency. Consistency is also an issue for option 3. From the perspective of take up, it can however, be envisaged that specific provisions could be made in the procurement contract or SLA in option 5 that specify the desirability of increased take up and shift the responsibility on the contracted organisation to pursue this objective through targets. This could however lead to perverse incentives where a profit-driven organisation, in pursuit of achieving the set targets, increases the number of benefit awards to those who are would not otherwise be entitled, for example through looser checks of eligibility. This would lead to increased caseloads, but not necessarily to an increased take-up in its stricter sense - take up within the eligible population. Because of the difficulties in measuring take up, especially for some of the benefits, it would be difficult to monitor the success of contracted organisation in achieving the targets. Therefore, both options 3 and 5 rank low against this criterion.
4.73. Option 6 comes out as the weakest against criterion 1 because of difficulties in ensuring consistency of access to the system. However, on the criterion 6, it is the strongest option because integration of the social security system into the wider public services reduces its visibility and hence the stigma that some people may perceive they are subject to when they claim benefits.
4.74. Applying the same arguments to the remaining options, option 2 has the potential for creating more awareness and those who prefer face-to-face contact would have that channel of accessing the system through local offices. On the other hand, the visibility of local offices and the lack of privacy in smaller communities could lead to greater stigma, which would not be the case under options 1 and 4. A centralised agency would allow more resources to be dedicated to devising strategies for increasing benefit take-up. Most third sector organisations have said that in-kind provision could increase stigma. However, where in-kind provision is optional the argument does not necessarily apply. Option 4 also performs better on public perception of claimants. With so many factors at play, it is difficult to rank options 1, 2 and 4 on this criterion in relation to each other at this stage.
| Criteria | Strongest | 4th | 5th | Weakest | |||
|---|---|---|---|---|---|---|---|
| 8 | Take up | 1 | 2 | 4 | 6 | 3 | 5 |
4.4.3 Income and poverty
4.75. Although the majority of the caseload and expenditure on the devolved benefits is on non-means tested benefits, there are several reasons why different ways in which the benefits are delivered could have an impact on those on low incomes and in poverty . Each are discussed in this criterion in turn.
4.76. Firstly, the Scotland Act (2016) includes powers to top up and create new benefits, which could in the future lead to more means-tested devolved benefits. If these powers are exercised in the future, they would require close alignment with DWP, because of their interaction with the reserved benefit system. Therefore, the easier it is for the system to interact with DWP, the easier it would be to top-up reserved benefits and design new benefits that would interact with the reserved system. Rankings against criteria 12 indicates that options 1, 4 and 2 perform better against this measure, whilst the more complex systems which involve other organisations perform worse, with option 6 being the weakest.
4.77. Secondly, the recipients of most existing devolved benefits are more likely to be on low incomes. Therefore, one of the factors involved is the cost of interaction with the system for the claimant. Making a phone call on a free phone line will be the cheapest way for the claimant to contact the agency, and Options 1 and 4 provide the best phone support service. They would also offer the most streamlined online service which would be a cost effective way for people to apply, but this assumes internet access or proximity to services such as a library or third sector organisation office. Under Options 2 and 3, where more resource is dedicated to face-to-face support, travel to and from the local office could incur costs for claimants, especially those living in remote areas. However, Option 3 has the advantage of minimising travel for people who are claiming other benefits administered by Local Authorities, such as Housing Benefit or Scottish Welfare Fund components, or are accessing other Local Authority delivered services. On Option 6 the argument is similar as the phone and online service would be smaller. Option 5 has the highest risk of costs of interaction being placed onto claimants.
4.78. Finally, administrative error, delay and communication channel failure are often the causes of income gaps and a system that minimised the chance of those occurring would have the potential to have a positive impact on poverty. From this perspective, Option 1 performs best, as it is the simplest and most efficient system (see criterion 11). Option 2, with an additional layer of local offices that manage their own caseload but also interact with the central agency is likely to slow processes down and create more scope for delay and error. The additional choice in the form of in-kind provision under Option 4 would also create room for error and delay in relation to stock management. Options 3 and 6 are the more complex systems and is therefore considered to be weaker.
4.79. Although there are several different perspectives from which options' performance on this criterion can be assessed, the way that options perform against them is similar.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 9 | Income and poverty | 1 | 4 | 2 | 6 | 3 | 5 |
4.4.4 Consistency and fairness
4.80. This criterion measures the extent to which each option can ensure that people in the same situation can achieve the same outcomes. This includes consistency of advice, support, decision making and ability to challenge decisions made.
4.81. Options 1 performs best under this criterion, as all social security system functions, including decision-making, sit together within one centralised agency. Continuous training can be delivered to all staff who interact with claimants over the phone or online to ensure that all claimants receive the same service.
4.82. Under option 2, with caseload locally managed and decision-making made in local offices, ensuring consistency is more challenging. Different practices could develop in different locations over time, in response to the idiosyncrasies of each geographical area. This can be mitigated against through centralised training, but compared to options 1 and 4 is more difficult and costly to implement.
4.83. Under option 4, despite there being a centralised agency, some consistency may be compromised because of the option for in-kind payments. This increases the complexity of the system and it may be that people opting to receive physical goods instead of cash payments would have to liaise with a different part of the agency. It is also more difficult to ensure that all claimants that opt for the same type of good end up receiving exactly the same product, as it is likely that in some instances certain stock will run out. Ensuring that everyone received the same product over time, as new products develop and old ones are taken out of production could lead to dissatisfaction, especially in relation to durable goods such as aids and appliances for disability benefit claimants.
4.84. Under options where other organisations are involved in delivery, ensuring consistency is more challenging than under agency-based options. The most complex, and hence most challenging, in terms of consistency is option 6. As claimants access the social security system via different public services, the support they are provided with, the application channels that are available to them and the mechanism through which they can monitor the progress or status of their claim would vary to a great degree. To ensure consistency, and therefore fairness, would be a significant challenge and is likely to take a significant length of time under this option.
4.85. The same argument can be applied to option 3, with claimants more likely to face inconsistencies in how they access the system and the outcomes of assessments, as these would be done by different local authorities across the country. The separation between the responsibility for undertaking assessments and the decision-making on assessments could lead to further inconsistencies. There could also be some variation in terms of advice and support.
4.86. Under option 5, advice and support, as well as assessments, would be delivered by another organisation. This could deliver some consistency but there are many unknowns around how that organisation would choose to set up its operations and deliver the training. The procurement contract or the SLA could set out specific requirements in relation to consistency but specifying the exact requirements would be challenging. It is also likely that inconsistencies could arise at some stages of delivery and it is the ability of the organisation to monitor and respond to this that is a big factor in ensuring that any issues are identified and dealt with promptly. This would be difficult for the agency to enforce once a contract has been awarded.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 10 | Consistency | 1 | 2 | 4 | 5 | 3 | 6 |
4.4.5 Implementability and Risk - summary table
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 7 | Interaction with various groups | 1 | 4 | 2 | 6 | 3 | 5 |
| 8 | Take up | 1 | 2 | 4 | 6 | 3 | 5 |
| 9 | Income and poverty | 1 | 4 | 2 | 3 | 5 | 5 |
| 10 | Consistency | 1 | 2 | 4 | 5 | 3 | 6 |
4.5 Efficiency and Alignment
4.87. The following outcomes set out in Creating a Fairer Scotland were used to create the Efficiency and Alignment criteria set.
The Scottish social security system is:
- administered in a swift and streamlined manner which meets the needs of recipients
- accessible, user friendly and simple to access
- aligned effectively as possible with the reserved benefit system
- aligned effectively as possible with other services to help ensure recipients get the support they need
Scottish benefits:
- target the right people and seek to impact on poverty and inequality
- are paid to as many of those who are entitled to them as possible whilst minimising fraud and errors
People resident in Scotland:
- see Scottish benefits as providing value for money
Efficiency and Alignment
11. System efficiency and flexibility
12. Alignment with reserved benefit system
13. Alignment with local and devolved public services
14. Control
15. Transparency
4.5.1 System efficiency and flexibility
4.88. This criterion comprises several components, which define the efficiency and flexibility of the social security system. These include; the speed and simplicity of processing a claim, the effectiveness of identity checking, the error and fraud prevention processes and the ability of the system to respond quickly to challenges and changes in priorities and direction.
4.89. Some of these elements are similar to those that are discussed under the Dignity and Respect criteria set. The key difference is that the rankings under this criteria set are from the system rather than claimant perspective.
4.90. Although options 1 and 4 are the most simple in terms of the set-up of the system, it may not deliver the most efficient and simple way of processing claims. There are several reasons for this. There are likely to be time savings and efficiency gains associated with limiting support to phone and online services only. However, if the level of support is more comprehensive than what can be provided in local offices, e.g. with specialist support to accommodate different requirements and needs of claimants, then these time savings may not be substantial. In a highly digitalised system, where all of the caseload is processed centrally, the processes in place are likely to be more efficient as local offices or other organisations are not involved.
4.91. However, identity checking may be more difficult in a setting where the face-to-face contact is limited to assessments. This may mean a slower service, as all documents and evidence have to be submitted digitally or by post, as opposed to directly to a local office. The level of attempted fraud may also be higher under options 1 and 4. In addition, there could be more scope for error if all information is submitted over the phone and claimants themselves may be more likely to make errors when filling in online forms, especially if they are not frequent users of the internet. These factors would complicate the system, potentially offsetting the time savings from limiting face-to-face contact.
4.92. Option 4 is likely to be marginally less efficient compared to option 1, simply due to the additional complexity of providing in-kind good and managing contracts.
4.93. Therefore, option 2 could have the right balance between central functions and availability of face-to-face support. Locally managed caseload management would complicate the ease and speed with which the system can respond to changing requirements and priorities, although with a unified IT system, this should not be a large obstacle to overcome. With local offices being part of the same organisation, it should be relatively easy to implement changes in processes should these be needed.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 11 | System efficiency and flexibility | 2 | 1 | 4 | 5 | 3 | 6 |
4.5.2 Alignment with reserved benefit system
4.94. This criterion looks at how easy it would be to achieve alignment with the reserved benefit system currently delivered by DWP and HMRC. Means-tested benefits, such as Jobseekers Allowance, Employment and Support Allowance and Income Support will continue to be the responsibility of DWP. Working Tax Credit and Child Tax Credits remain the responsibility of HMRC. Housing Benefit policy is the responsibility of DWP but the administration of payments sits with Local Authorities. With the rollout of Universal Credit, these six main means-tested benefits, will be rolled into a single benefit and become the sole responsibility of DWP.
4.95. There are a number of reasons why there are benefits in ensuring that the Scottish Social Security system is aligned sufficiently well with the DWP system. The main reason involves the powers devolved to the Scottish Parliament to top up and create new benefits. To design and implement effective policy utilising these powers, information on a claimant's entitlement for reserved benefits may be useful. For example, if the Scottish Government was to consider creating a benefit that is means-tested through a taper [26] . Careful policy design would be required to avoid the Scottish benefit taper overlapping with the Universal Credit taper in a way that leads to claimants losing more than £1 in benefit for every additional £1 they earn. Another significant issue is that of people moving from Scotland to other parts of the UK and how the systems could be aligned to ensure continuity of payments.
4.96. Where information needs to be exchanged between two systems, simplicity of structure is advantageous. Agency-based options rank stronger on this criterion compared to other options as DWP would interact with a single organisation rather than a system with many different organisations. This could facilitate data exchange, as agreements would need to be reached between two governance structures rather than several. Local caseload management may introduce an additional complication into the system but with local offices being part of the agency, the main implication of this is likely to be around the speed of information exchange rather than its feasibility.
4.97. Option 4 ranks lower than options 1, 2 and 3 on this criterion. This is because where a claimant chooses to receive a payment in kind, instead of a benefit, this would constitute a significant departure from the DWP policy where, apart from notable exceptions such as the Motability scheme, most benefits are paid in cash. This could create problems around information sharing with DWP if DWP systems do not allow for recording of such information. In general, the further the Scottish social security system diverges from the DWP model, the more difficult information sharing will become. Also, in the case of durable goods, this could create problems for example where people move from Scotland to the rest of the UK and what that means for their benefit entitlement from the DWP's perspective.
4.98. Data sharing agreements would be easier to reach when the data does not have to be shared any wider than the agency. This would not be the case with options 3, 5 and 6, where several organisations are in charge of administering benefits and therefore collecting and using information in relation to social security.
4.99. Option 6 has a large number of public sector organisations involved and this would complicated alignment with DWP. Different processes and systems in place would make it challenging to link to the DWP systems and significantly slow down any information exchange.
4.100. Because there would be only one additional organisation under option 5, it is likely that aligning with DWP would be easier. Option 3 ranks better than options 5 and 6 because Local Authorities already play a role in delivering some social security benefits and have the systems in place that interact with DWP already, for example in administering Housing Benefit. Option 3 also ranks higher than option 4, because the added complication of divergence from DWP as a result of paying benefits in-kind is not relevant of option 3.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 12 | Alignment with reserved benefit system | 1 | 2 | 3 | 4 | 5 | 6 |
4.5.3 Alignment with local and devolved public services
4.101. This criterion considers several different dimensions in terms of alignment - with respect to assessments, Local Authority services and employability services devolved in the Scotland Act 2016.
4.102. Option 6 represents a large scale integration of social security system into services that are already provided by the wider public sector in Scotland. This means that the NHS, schools, colleges, prisons and police, among others, become the gateways into the system by growing to accommodate the additional responsibilities in relation to social security. This would allow for better alignment with the services that the social security payment recipients may already be using. For example, with respect to disability benefits, there is scope for alignment with the NHS which already holds health records that are relevant to the person's disability benefit claim. This information could be utilised when doing assessments, and the award decision would be made based on information that is held by the same organisation. Because of the large number of public organisations involved in the delivery, there is more scope for alignment and hence greater efficiency of the wider public service.
4.103. Local Authorities currently administer a number of social security payments, including Discretionary Housing Payments, Scottish Welfare Fund payments and Housing Benefit. Under option 3, local authorities can build on the processes that are already in place to expand their advice and support functions. Local Authorities also provide other services such as assessments for social care, where there would be benefits from alignment.
4.104. At the other end of the scale, option 5 would provide very little room for alignment with a large part of the social security system being delivered by private or third sector organisations. The organisation that is awarded the contract is unlikely to have any substantial established links with the wider public sector. Also, contracts are time limited and any alignment to existing services that is established would be lost if the contract is subsequently awarded to a different organisation.
4.105. The agency-based options sit in the middle in terms of ranking. Under options 1, 2 and 4, most of the social security system would be delivered by the new agency. The agency would be a new addition to the public sector landscape and will not have any established links. However, being a permanent public sector organisation, alignment with existing services could be established. A simpler centralised structure for the agency is likely to facilitate that and hence options 1 and 4 rank higher than option 2. Creation of new local offices, each with their own caseload management functions, would make it more difficult to align to local authorities, who also have their own offices. Too much complexity in the system could lead to difficulties in establishing which layer of the agency is responsible for alignment with which public sector organisation. Option 4 ranks lower than 1 because of additional complexity of in-kind provision.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 13 | Alignment with local and devolved public services | 6 | 3 | 1 | 4 | 2 | 5 |
4.5.4 Control
4.106. This criterion refers to the level of Ministerial control over the social security system, facilitating the ability to implement policy changes quickly. Regardless of the exact set-up of the agency structure, Ministers will play a role in setting out the remit for the agency and it is expected that this will be an ongoing process where the remit is subject to change in response to evolving priorities. It is expected that any changes in administration could lead to changes in remit.
4.107. The agency-based options 1, 2 and 4 allow the most control in terms of the delivery of social security. They rank highly on system efficiency and flexibility (criterion 11) which facilitates the relative ease of implementing changes. Option 1 and 2 are deemed to provide a similar level of control, however option 4 may provide less because of potential on-going contracts with organisations that provide in-kind goods, which may limit control over the contract periods.
4.108. Incorporating other organisations would limit the scope to change the remit of the agency quickly and efficiently should the need arise. Under option 3, any changes in delivery would have to be agreed across all Local Authorities, which would slow down the process. Option 6 involves a great number of organisations, and many different governance structures would be involved if a change in remit or processes needs to be implemented. However, unlike under option 5, all organisations involved are part of the wider public sector. Where a substantial part of the delivery system is operated by a private or third sector organisation, ministerial control over the system would be minimal for the duration of contract. Option 5 is therefore the weakest against this criterion.
| Criteria | Strongest | 4th | 5th | Weakest | |||
|---|---|---|---|---|---|---|---|
| 14 | Control | 1 | 2 | 4 | 3 | 6 | 5 |
4.5.5 Transparency
4.109. This criterion evaluates each option in terms of how easy systems of monitoring, evaluation, reporting and parliamentary / independent scrutiny can be delivered alongside the main functions of the social security system.
4.110. Option 6 performs poorly against this criterion. A clear theme in the evidence gathered as part of the Options Appraisal was that options where accountability is shared across a number of layers are problematic in a number of respects. Option 6 has, by some margin, the highest number of people responsible for running the social security system, mainly embedded in existing public sector organisations. The scope for human error, miscommunication and inconsistency in standards of service across organisations under option 6 is considerable, making monitoring of the system particularly difficult. These drawbacks to option 6 places it as the worst option.
4.111. At the other end of the scale, central agency models in options 1, 3 and 4 ranks strongly against this criterion, because accountability is concentrated in a single agency. Under these options, staff involved in processing applications, calculating eligibility, making payments to users and managing dispute resolutions/appeals are based in the same office. This makes monitoring of communications between staff and users, and evaluations of decision making processes, for example, much more manageable. It should be noted, however, that a culture of transparency is not simply a function of the form of the agency. Ensuring transparency is likely to be a challenge under any of the chosen options.
4.112. There is little distinction between how the agency operates under options 1 and 4, and so they are ranked equally the highest against the criterion. Under option 3, assessments are not carried out by the agency, but by local authorities, therefore potentially adding more complication in monitoring this key part of the system.
4.113. Option 2 ranks somewhat strongly against the criterion, however, because the many of the functions of the agency are dispersed across a number of local offices, this adds a layer of difficultly in monitoring and evaluating decision making that is not the present in options 1,3 and 4.
4.114. Option 5 ranks relatively poorly against the criterion. Evidence from the consultation found that, in general, respondents were in favour of public over private sector delivery, particularly due the scrutiny, transparency and accountability required of public sector services. Similar to option 6, accountability will be shared across a number of layers in the system and some of these will be private contractors. Currently assessments are carried out by private contractors. Evidence from the consultation shows respondents felt that the high number of successful appeals demonstrated the poor quality of decision making by assessors and a lack of transparency in how assessments are conducted.
| Criteria | Strongest | 3rd | 4th | 5th | Weakest | ||
|---|---|---|---|---|---|---|---|
| 15 | Transparency | 1 | 4 | 3 | 2 | 5 | 6 |
4.5.6 Efficiency and Alignment - Summary table
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 11 | System efficiency and flexibility | 2 | 1 | 4 | 5 | 3 | 6 |
| 12 | Alignment with reserved benefit system | 1 | 4 | 2 | 3 | 5 | 6 |
| 13 | Alignment with local and devolved public services | 6 | 3 | 1 | 4 | 2 | 5 |
| 14 | Control | 1 | 2 | 4 | 3 | 6 | 5 |
| 15 | Transparency | 1 | 4 | 3 | 2 | 5 | 6 |
4.6 Implementability and Risk
4.115. Assessing options against implementability (or feasibility) is a standard part of option appraisals. We have adapted the Scottish Transport Appraisal Guidance [27] on this issue to meet the requirements of this appraisal.
STAG Guidance
- Feasibility - a preliminary assessment of the feasibility of construction or implementation and operation (if relevant) of an option…as well as any cost, timescale or deliverability risks associated
- Affordability - the scale of the financing burden on the promoting authority and other possible funding organisations and the risks associated with these should be considered together with the level of risk associated with an option's on-going operating or maintenance costs
- Public Acceptability - the likely public response is of importance at this initial appraisal phase and reference to supporting evidence, for example results from a consultation exercise must be provided where appropriate
Implementability and Risk
16. Scale of Change and Timescales
17. IT systems risk
18. Assessment system risk
19. Public Perception
4.6.1 Scale of change
4.116. This criterion is related to the complexity of each option and the relative extent of change that its implementation would entail in terms of new systems and infrastructure.
4.117. Options 6 ranks as the weakest option against this criterion. The scale of transformation of the existing public sector landscape under option 6 is comparable to that which is on-going as a result of the integration of Health and Social Care in Scotland. At an abstract level, this reform program is designed to bring together two existing services, which were previously delivered separately by the NHS and Local Authorities. Notwithstanding the challenges of replicating and potentially increasing the scale of this reform, an added difficulty in implementing option 6 is that apart from the benefits administered by Local Authorities, there is no existing system in Scotland which delivers social security payments. Therefore, option 6 presents a more significant change to Scotland's public sector landscape, by integrating existing services with delivery of payments which were previously reserved to the UK Government. The risk associated with this option is that it will face similar challenges that have been noted by Audit Scotland in delivering Health and Social care integration, such as funding negotiations between NHS, local authorities and Scottish government [28] .
4.118. Option 5 ranked slightly higher than option 6. Certain private sector organisations are already contracted by DWP to carry out assessments for disability and incapacity benefits in Scotland, so option 5 eliminates the complexity of building capacity for assessments to be undertaken in the public sector. In addition, some third sector organisations have existing expertise and experience of advice and support, which could be built upon. Despite these advantages the extent of outsourcing proposed under this option goes beyond the experience of the DWP model, with many of the essential functions of social security being outsourced to any number of private or third sector parties.
4.119. Within the options where the agency delivers most of the functions of social security (options 1, 2 and 4), option 2 is the weakest because of the added complexity of setting up multiple local offices, which involves hiring staff to work in local areas, identifying and leasing premises and preparing them operationally. Under option 4 the complexity of setting up local offices is removed and therefore it is ranked higher than option 2. However, under option 4 there is still the added complexity of delivering in-kind benefits through setting up contracts with third party providers, which is not present in option 1. Option 4 represents a shift towards a different approach to providing social security to the existing one and is more likely to present additional challenges, which may not be known from the outset.
4.120. Option 3 ranked highly because of the elements of the new social security system which will be delivered by local authorities, who already deliver some social security functions such as one-off payments (Scottish Welfare Fund), benefit maximisation and assessments for social care. This means that local authorities are well placed to deliver some of the social security system, than would be the case under options 1, 4 or 2, where these functions would sit with the central agency and would be required to be set-up from scratch.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 16 | Scale of change | 3 | 1 | 4 | 2 | 5 | 6 |
4.6.2 Timescale
4.121. This criterion is related to the likely timescales required to implement each option. The ranking of the options under this criterion aligns with the scale of change criterion 17, however there are some key differences.
4.122. Unlike in criterion 17, option 5 ranks highly because there are existing providers in the marketplace that could take on certain functions of the social security system relatively easily, efficiently and quickly. This is certainly the case for IT and payment systems, assessments and advice and support services. Contracts with third parties to deliver other aspects of the social security system will be more challenging from a procurement perspective and, as has been elaborated in other criteria, may fall short of delivering some of the medium and long-term outcomes. However, the likelihood that a service could be established relatively quickly is higher.
4.123. Options 6 ranks as the weakest option against this criterion. The scale of transformation of existing public services required under this option is likely to increase time to delivery. Option 6 requires a large number of existing staff to take on new responsibilities as opposed to recruiting fewer new staff dedicated to delivering social security. Option 2 does not rank strongly against this criterion because unlike other options, many of the functions will be replicated in offices across Scotland. Coordinating the activity of these local offices, identifying and leasing premises and preparing them operationally will extend the time to delivery compared to other options with a central agency.
4.124. Options 1 ,2 and 4 are all centred around a central agency delivering most of the functions of social security. Option 3 is marginally better in terms of timescale because existing discretionary benefits will continue to be delivered by local authorities and existing advice and support services will be built upon to deliver a 'front-door' for social security, all of which is likely to reduce time to delivery. Option 4 is marginally worse than option 1, because the added complexity in delivering in-kind benefits is likely to increase timescales.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 17 | Timescale | 5 | 3 | 1 | 4 | 2 | 6 |
4.6.3 Risk
4.125. This criterion refers to the likelihood that agency systems, such as IT, assessments and administrative systems, will fail or not deliver to specification. Failures under any option would cause significant disruption to users and reputational damage to the Scottish government.
4.126. Option 6 ranks as the weakest option against this criterion. As the option most likely to have a significant impact on existing public sector organisations, it is likely that a failure to deliver social security might also impact on these organisations. For example, if assessments are conducted in NHS premises using medically trained staff, an administrative failure might impact on the rest of the organisation. In terms of IT, the number of potential users of the system under this option will compound the scope for human error, increasing the likelihood of sensitive personal data being misused and cyber-attacks.
4.127. Option 5 also ranks as one of the weaker options against this criterion. In terms of assessments in particular, the reputational damage from these assessments failing to meet specification is likely to also be significant for the Scottish Government compared to other options where assessments are conducted 'in-house'. There is also scope for miscommunication between different parties that deliver social security functions, leading to gaps in the system for users, which would lead to further reputational damage.
4.128. Option 3 ranks strongly against this criterion which is driven, in part, by the lower risk around running assessments, advice and support, and the fact that local authorities will deliver discretionary benefits separately from the central agency. Local authorities already carry out assessments for social care, so existing practices and systems could be built upon to deliver assessments in a similar way. In addition, local authorities may have spare capacity in their estate portfolios to accommodate rooms for assessments to take place across their local area. An IT or administrative failure in the central agency could mean that delays in paying benefits could affect all benefit recipients across Scotland, however, under option 3 discretionary benefits will be protected as they are still administered separately by local authorities. Local Authority systems could provide a form of back up if problems arise in other areas of social security delivery.
4.129. Options 1 and 4 rank relatively weakly against this criterion, partly driven by the assessments system. Assessments under options 1 and 4, are carried out by a mobile workforce, who medically assess people in their home or in a location of their choice ( e.g. third sector organisation premises). The logistical challenge of designing a system which can manage around 500 staff with no permanent base, and manage their workloads around the preferences of claimants in terms of home-based assessments or local premises based assessments, presents a greater risk of system failure than under any of the other options. The delivery of in-kind benefits under option 4 ranks this option as weaker than option 1.
4.130. In addition to assessments, administrative errors or processing backlogs in a central agency (options 1 and 4) will affect almost all recipients across the country. Under option 2 this is less likely to be the case, as caseload management is at a local level and these offices may be more flexible in responding to local pressures and challenges than a central agency.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 18 | Risk | 3 | 2 | 1 | 4 | 5 | 6 |
4.6.4 Public Perception of system
4.131. Whilst Criterion 6 assessed which option was best placed to shift public perceptions of social security users, this criterion assesses public perceptions of the Scottish Government's delivery of a social security system. Specifically, this criterion will assess each option against the likelihood that the public view of the delivery system and its efficiency positively or otherwise, across the six options.
4.132. Option 5 ranks worst against this criterion. There is significant public and political scepticism of private sector providers delivering aspects of social security in the UK, based on recent experiences. Concentrix, a private company used by DWP to review possible fraud and error in claims for tax credits by UK households has been heavily criticised by the UK Government's Work and Pensions Committee for a series of failings resulting in vulnerable people losing legitimate entitlement to tax credits. Although it is by no means a certainty that contractors working on behalf of the Scottish Government would have similar failings, it does not seem reasonable to dismiss the experience of UK Government contracts.
4.133. Options 1, 2 and 4 perform relatively well against the criteria because the social security agency will have a strong 'brand' and be more visible to the wider public than under options where the agency is more diffuse and embedded in existing organisations to a lesser or greater degree . This options are ranked equally strongly, as the presence of local offices or in-kind goods is not likely to impact of the branding. Option 3 also implies these qualities, but the association with local authorities, rightly or wrongly, could compromise public perceptions of the service provided in these offices.
Under option 6, rather than being delivered through a central agency, social security payments will be delivered by public organisations which are not primarily associated with the stigma of claiming benefits, such as the NHS, schools and local authorities.
| Criteria | Strongest | 4th | 5th | Weakest | |||
|---|---|---|---|---|---|---|---|
| 19. | Public Perception | 1 | 2 | 4 | 3 | 6 | 5 |
4.6.5 Implementability and Risk - summary table
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 16 | Scale of change | 3 | 1 | 4 | 2 | 5 | 6 |
| 17 | Timescales | 5 | 1 | 4 | 3 | 2 | 6 |
| 18 | Risk | 3 | 2 | 5 | 6 | 1 | 4 |
| 19. | Public Perception | 1 | 2 | 4 | 3 | 6 | 5 |
4.7 Economy, Society and Environment
4.134. The following outcomes set out in Creating a Fairer Scotland were used to create the Economy, Society and Environment criteria set.
Outcomes:
People resident in Scotland:
- see Scottish benefits as providing value for money
Other public and third sector services:
- function better and experience less pressure due to the changes to social security in Scotland
4.135. In addition, this criteria set has been informed by wider Scottish Government objectives such as a delivering sustainable economic growth , which is characterised by a number of priorities in the Scotland's Economic Strategy and Regeneration Strategy [29] :
Communities, local assets and housing
- We are acting to catalyse local level investment including regeneration in our most disadvantaged communities, bringing empty town centre properties
Business Investment
- Infrastructure investment attracts business investment, stimulates economic activity and deepens access to the labour market.
Economy, Society and Environment
20. Employee job satisfaction - assessments
21. Employee job satisfaction - non assessments
22. Regeneration
23. Business development
24. Third sector organisations
25. Public sector organisations
26. Resource consumption
27. Travel and transportation
4.7.1 Employees job satisfaction - assessments
4.136. The 'employee - assessments' criteria refers to the level of job satisfaction amongst employees carrying out face-to-face assessments under each option. This includes aspects such as responsibilities, caseload per employee, quality of premises, morale and engagement.
4.137. Evidence gathered in the appraisal process pointed to the importance of favourable terms and conditions for staff carrying out assessments, as well as a safe environment for staff to conduct assessments. Against these factors, options 1 and 4 were ranked the as the weakest options, as staff would be remote from management, meaning potentially poor monitoring of wellbeing, lower morale and less cohesion across the workforce.
4.138. Although options 1 and 4 appear attractive in terms of flexibility of work patterns for some staff, the logistical necessity of timetabling assessments at multiple locations across a geographical area could lead to increased levels of anxiety and higher staff turnover. These options would also require a lot of travelling especially for staff in remote areas and greater variability in the quality of premises could make the job unappealing for professional staff [30] . Finally, a mobile workforce does not necessarily mean one that is integrated with local services, or one that has knowledge of the local area. There is a greater possibility that this could be achieved under option 6 or options 2 and 3, with a network of local offices.
4.139. Under option 5, the potential for target driven practices even where these are not specified in the contract, and less ownership of the process by employees - with decision making sitting with the central agency - is also of some concern for staff morale under this option.
4.140. Options 2 and 3 were more highly ranked due to the fact that staff would have a permanent place of work compared to options 1, 4 and 5 (depending on the specifics of a contract). A permanent place of work is more likely to encourage a cohesive workforce, with higher morale. Option 2 was viewed as marginally weaker, as both those carrying out assessments and decision-makers would be based in the same local office, potentially increasing the stress involved for staff making the initial assessment.
4.141. On balance, option 6 was ranked as the best option in terms of employee job satisfaction. Under option 6, employees carrying out assessments would be embedded into the NHS. Medically qualified staff might prefer this model to one where staff sit outside of the NHS. They would also have more information at their disposal which could make their job easier and be viewed more positively by people they are assessing because of the affiliation to the NHS. All of these factors are likely to have a positive effect on staff morale and retention.
| Criteria | Strongest | 2nd | 3rd | 4th | Weakest | ||
|---|---|---|---|---|---|---|---|
| 20 | Assessments - employees | 6 | 3 | 2 | 5 | 1 | 4 |
4.7.2 Employees job satisfaction - non assessment employees
4.142. This criteria refers to the level of job satisfaction of social security system employees, excluding those that carry out face-to-face assessments as discussed in criterion 20.
4.143. Evidence gathered in the appraisal process pointed to the importance of favourable terms and conditions, a good work-life balance, engaging work, a positive relationship with management, and general cohesion between different parts of the system. This meant that options which extended better terms and conditions to more staff, implied reduced travel time for staff, were more agile and joined-up in administrative set-up and meant management were more visible to all staff were ranked relatively highly.
4.144. Option 5 also performed poorly against the criteria. This was driven by the fact that employee terms and conditions would be outside of control of the public sector and hence bear more risk of being less favourable. Public perception of outsourcing of social security to the private sector is generally negative and this may have an impact on the nature of interaction with claimants. If the contract is with a third sector organisation, there would still be a challenge to communication between governance and delivery of social security functions, complicating the operational processes
4.145. Option 6 also was ranked as a weaker option. This was driven by the number of layers within the system, which was judged difficult for staff to navigate quickly, impeding the ability for staff to retain and relay information. This presents a particular problem in training new staff, particularly if their role in the social security system is secondary to their primary occupational role ( i.e. GPs, teachers, prison staff). By its very nature option 6 would mean that communication between management in the central agency and a diffuse network of agencies delivering social security functions would be more challenging than under other options. However, because staff under option 6 will maintain employee conditions of the public sector, this is ranked higher than option 5.
4.146. Option 2 was ranked as the strongest option. A greater degree of managerial presence at local levels may be positive for workforce cohesion and morale. Also, the fact that social security will be delivered in many different locations in Scotland, means that jobs will be transferable between locations, which may be attractive to staff who need to be flexible in terms of their place of work. Key to the success of a the agency is that employees believe that the decisions they make and the work they perform has a direct impact on the services the agency provides. Under options 1 and 4 where the vast majority of the interactions with claimants is via a call centre or online chat service, this will be harder to achieve than under option 2 where there will be more face-to-face interaction with claimants. The benefits to staff of transferring location are also not available under options 1 and 4.
4.147. Finally, option 3 performed poorly against this criteria because of the challenge local authority staff would have with the interactions between social security and other functions of local government. Unlike a single agency with local offices, option 3 opens up the possibility of different practices in both implementing policy and administering benefits, than would be the case under a single agency (with or without local offices).
| Criteria | Strongest | 2nd | 4th | 5th | Weakest | ||
|---|---|---|---|---|---|---|---|
| 21 | Employee job satisfaction - Non- assessments | 2 | 1 | 4 | 3 | 6 | 5 |
4.7.3 Regeneration
4.148. This criterion refers to the potential regeneration impact under each option. Regeneration refers to the holistic process of reversing the economic, physical and social decline of places where market forces alone won't suffice. The Scottish Government's vision, as set out in the Regeneration Strategy [31] , is of a Scotland where Scotland's most disadvantaged communities are supported and where all places are sustainable and promote well-being. In a strategic context, regeneration also supports sustainable economic growth though promoting cohesion (reducing the disparity between regions of Scotland) and solidarity (reducing the inequalities across all individuals).
4.149. Ranking options against the regeneration criteria involves a trade-off between the potential transformational impact of regeneration concentrated in a single area (for example under options 1 and 4), and a number of smaller impacts which are distributed across many areas in Scotland (for example under option 2 and 3). Given that a relatively small number of staff will be employed in local offices under options 2 and 3, it is likely that any wider regeneration impacts will be small, and that additional impacts on local economies may be marginal. Option 1 and 4 will employ a significant number of staff in a single area, which could support the regeneration of a deprived area and have a tangible positive impact on the local economy, although the potential for displacement of alternative business activity is also a greater risk under these options.
4.150. Options 1 and 4 perform strongly against the regeneration criteria, because a central agency could employ a large number of staff in one geographical area with significant regeneration potential, and provide additional economic benefits to the local economy. Locating a large office development in a deprived area will potentially increase footfall for local businesses and attract new businesses to the area. option 4 ranks slightly better because more staff are employed in the central agency.
4.151. Options 2 and 3 perform relatively strongly against the regeneration criterion. Under option 2, a network of local offices will be established with a similar footprint to DWP jobcentres (some local offices may be co-located with these jobcentres). Therefore, option 2 could potentially deliver some regeneration benefits to town centres by occupying empty business premises in high-streets across Scotland and the displacement effect is likely to be smaller. Although, local authorities are well placed to coordinate economic development and regeneration activity, under this option 3 it is likely that more existing premises will be used to accommodate additional staff than under option 2 .
4.152. Options 5 and 6 rank poorly against the regeneration criteria. Option 6 would involve using pre-existing estate within the NHS or other public agencies to deliver aspects of the social security system, this would reduce the additional regeneration impact of this activity. Option 5 could potentially deliver some regeneration impact, if contracts were written to ensure that companies leased buildings in particular areas. However, the impact may be transitory compared to other options, as the business contracts come under review. Staff turnover may also be higher in this model, reducing some of the potential impact of regeneration.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 22 | Regeneration | 4 | 1 | 2 | 3 | 5 | 6 |
4.7.4 Business development
4.153. This criterion measures the impact on employment and business activity in wider economy under each option.
4.154. Similar to the regeneration criterion, option 6 ranks the worst in relation to the business development criterion. Option 6 involves using pre-existing premises within the NHS or other public sector organisations. It also implies recruiting fewer additional staff, as this option involves extending the responsibilities of existing staff within public sector organisations. The additional spending power of any new employees to support business development under this option is therefore limited.
4.155. Option 5 ranks particularly well against the business development criteria. By definition, under option 5, the impact on business development will be positive as most of the functions of social security will sit with private contractors (notwithstanding the possibility that this option will bring in not-for-profit third sector providers to take-on some functions such as assessments). Adopting option 5 will mean that more people in Scotland will be employed in the private sector, rather than the public sector - as is the case with all other options.
4.156. It is assumed that a central agency model (options 1 and 4) will be better for business development than a local office model (options 2 and 3), because the benefits to businesses under options 2 and 3 will be marginal, more difficult to identify and diffuse in nature. However, locating a central agency in a relatively deprived area, and in a location with a high local multiplier on investment, means that the additional spending power of employees located in the area will be boost local business activity and employment.
4.157. The ranking of options 1,2, 3 and 4 are similar to the ranking under the regeneration criterion, however, there are some key differences. Option 1 is ranked higher than option 4 because paying benefits in cash under option 1 (rather than in-kind) will impact local communities, as the funding could be spent in local businesses and community assets. Option 2 is ranked higher than option 3 because more staff will be employed under this model of local offices, potentially giving a greater boost to local economies.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 23 | Business Development | 5 | 1 | 4 | 2 | 3 | 6 |
4.7.5 Impact on the Third Sector
4.158. This criterion refers to the extent to which demand on third sector organisations in areas such as advice, information provision and application assistance, can be mitigated under each option. Broadly, options which have the potential to reduce demand on the third sector are ranked highly.
4.159. We assume that third sector organisations receive the same level of public funding, regardless of the chosen option, except option 5 where third sector organisations could take on contracts to administer certain functions of the social security agency.
4.160. Evidence from the consultation showed that delivery responsibilities might pose a conflict of interest, impacting on the independence of advisors and potentially undermining the relationship between third sector organisations and users of the social security system.
4.161. If the contract is awarded to a private sector organisation, option 5 still ranks poorly against this criteria. Except in circumstances where an exceptionally well-specified series of contracts can be agreed upon with contractors, it is likely that the social security system will become more confusing for users to navigate than the current status quo. Separate companies managing different functions of the social security system will not necessarily have effective, joined-up communication arrangements with the public, and intra-organisational communication may also be poor, especially if there is no contractual obligation or commercial incentive to do so. Given these circumstances, option 5 is more likely to increase the current demand on third sector advice services that guide users through the complexities of the social security system.
4.162. For similar reasons, option 6 also ranks poorly against this criteria, because separate organisations (rather than a single agency) will be responsible for administering social security. Increasing the number of layers in the system ultimately makes it more difficult for a user to navigate, as there is no obvious 'front door' for social security. Options 2 and 3 rank highly against this criteria. Under both of these options, there is a clear 'front door' for social security, and a network of local offices providing advice and support for users. Therefore, the pressure on the third sector's role in offering advice and support under this options may be reduced compared to the status quo.
4.163. In option 1 and 4 the agency will be centrally located, and the majority of claims will be made online or over the phone. Given this, the role of the third sector will be relatively high compared to options 2 and 3, because some clients may need additional assistance face-to-face support to begin a claim, or get information about social security which not would be available at a local office under option 1. Under option 4 users may wish to seek advice from the third sector on whether to choose cash or in-kind goods, which would create additional demand for their services under this option. Also, evidence from the consultation suggests that in-kind goods could be provided through local third sector or social enterprises. In this scenario this would increase demands on the third sector.
4.164. The option that perform best under this criterion is option 3. Under this option, there is less confusion for the claimants that could result from the creation of a new agency, especially in the case of option 2 with local offices. Many claimants already communicate with Local Authorities who currently administer and provide advice and support on a number of benefits.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 24 | Third Sector | 3 | 2 | 1 | 4 | 6 | 5 |
4.7.6 Impact on Public Sector Organisations
4.165. As reflected in the consultation, there are benefits to delivering social security through existing public sector services and organisations from claimants' perspectives and social security delivery. However, these benefits are captured under other criteria. Under the Public Sector Organisations criterion the impact on organisations such as the NHS, schools, colleges and local authorities of alignment with the social security system under each option is considered. Therefore, this criteria will rank each option on the best outcome from the perspective of existing public sector organisations, which implies minimising change and disruption to existing organisations.
4.166. Options 3 and 6 performed poorly against this criterion. This is because these options imply a significant degree of alignment with existing organisations, such as the NHS (option 6) and Local Authorities (option 3). Although it is assumed that these organisations will scale up to take on additional responsibilities, there would be an increase in responsibilities for the existing staff, which under option 6 could include GPs, doctors, nurses and midwives.
4.167. Although less transformational, option 3 will mean local authorities would provide a 'front door' service for social security, alongside the existing services they already provide in this area. Alignment of assessments for some benefits with existing assessments for social care, would mean additional responsibilities for local authorities. It is likely that different Local Authorities will have varying degrees of ability to take this on within their existing capacity.
4.168. The agency-based options 1, 2 and 4 performed best against the criteria. Under these options, the bulk of social security functions will be administered by a new agency. Whilst this agency will interact with existing public sector organisations, the impact on their existing functions and their staff will be minimal compared to options 3 and 6. Option 2 is marginally better than option 1 and 4 because it provide for face-to-face support in local offices. Under option 1 and 4, those who require face-to-face assistance may seek it in Local Authority offices or during visits to their GPs.
4.169. Option 5 performed relatively poorly against this criteria. Although this is the only option where the bulk of the social security is delivered by others, because option 5 ranked poorly for impact on the third sector (criterion 24), it is likely that for similar reasons, public sector organisations might face higher demand under this option. Whether option 5 involves bringing in private contractors to run parts of the system, or not-for-profit third sector organisations, the likelihood that users will end up requiring assistance from other public sector organisations to navigate the system.
| Criteria | Strongest | 2nd | 4th | 5th | Weakest | ||
|---|---|---|---|---|---|---|---|
| 25 | Public Sector Organisations | 2 | 1 | 4 | 5 | 3 | 6 |
4.7.7 Resource Consumption
4.170. This criterion examines the extent to which the Scottish Government will have to procure new resources to deliver social security in terms of new capital requirements such as new premises (office space), specialist equipment, human resources and other resources required to run the social security system. Therefore, options which score strongly will require less in terms of procuring these resources.
4.171. The agency based options perform worse than other options on this criterion as a new organisation that is larger and has less capacity to utilise existing resources. Options 1 and 4 are likely to require large new office space, as it unlikely that existing space within the public sector estate will meet the scale of resource requirement to undertake the agency functions at a single site. Option 4 is marginally worse than option 1 because, in addition to these requirements there could be an expansion of warehouses storage facilities across the country. It is difficult to judge how much more the demand for these goods would increase as a result of in-kind provision compared to cash payments and the net effect could be marginal.
4.172. Option 3 and 6 perform strongly against this criterion. Both of these options imply that the social security agency will be able to utilise existing human and capital resources in the NHS, other public sector organisations and local authorities. For example, assessments under option 6 will be conducted on NHS premises, and all administration could be split between different public sector organisations utilising the existing premises where possible and, potentially involving existing staff, therefore reducing capital and human capital costs under this option. Option 3 achieves a similar resource saving, but on a smaller scale as local authorities will provide the 'front-door' for users, but benefit administration would still be carried out by a central agency, requiring new staff and premises.
4.173. Option 2 performs relatively poorly because under this option because the resources required are similar to the requirements in options 1 and 4. However, option 2 incorporates additional space for assessments and face-to-face support services. It is also likely to have higher consumption of office equipment and heating in the aggregate compared to option 1 and 4. Option 5 performs relatively also ranks poorly against this criterion because it is likely to have occupy a number of offices and use resources that displace other potential business activity.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 26 | Resource Consumption | 6 | 3 | 1 | 4 | 5 | 2 |
4.7.8 Travel and Transportation
4.174. This criteria assesses the number of travel hours (for staff and claimants) and associated costs of travelling (such as carbon emissions) associated with each option at a high level. At this stage, we are using staff numbers as a proxy for the number of journeys required under each option.
4.175. Options 3 and 6 have the lowest number of staff in the central agency compared to other options. Therefore the cumulative travel time and costs of travelling for central agency staff will be low under this option. Additional staff would need to be recruited by local authorities other public sector organisations to take on social security functions, but there is scope for some functions to be carried out by existing staff . Although there is a level of uncertainty about the extent of this, on balance 3 and 6 are considered to be the strongest options.
4.176. Under option 1 and 4, assessments are provided by a mobile workforce with no base, implying a large amount of travelling for staff carrying out assessments. However, travel time for those who are being assessed minimal compared to options with local offices. There are two opposing effects at work that would determine the environmental impacts of travel. On one hand, travel by the agency assessors is more likely to have a more negative environmental impact due to the use of private vehicles compared to travel for those being assessed which is expected to be using a mix of private and public transport. On the other hand, permanent office locations would require travel for both assessors and people being assessed which may bring the environmental impact of travel of options 1 (and 4) and options with offices closer. Assuming that assessment staff can reside closely to the area they are covering, it is more likely that these options would involve less travel. Option 4 could be marginally weaker than option 1 if it leads to a high demand for in-kind goods and generates less direct routes of transportation of goods to the end user.
4.177. In terms of travel for other staff, this would depend greatly on the office location for option 1 and 4. Locating in an area with good public transport links and cycle routes could reduce the environmental impact of commuting. This could however, also have impacts on congestion.
4.178. Under option 5, most staff will not be working for the agency, but for private sector / third sector organisations. It is not really clear how this will effect travel and transportation costs at a high level compared to other options. It is more likely that these organisations will have fewer offices in larger urban area, with more convenient public transport systems for staff that travel into offices. It may, however, involve more travel for users.
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 27 | Travel and Transportation | 6 | 3 | 1 | 4 | 5 | 2 |
4.7.9 Economy and Environment - Summary table
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 20 | Assessment employees | 6 | 2 | 3 | 5 | 1 | 4 |
| 21 | Non-assessment employees | 2 | 1 | 4 | 3 | 6 | 5 |
| 22 | Regeneration | 4 | 1 | 2 | 3 | 5 | 6 |
| 23 | Impact on private sector | 5 | 1 | 4 | 2 | 3 | 6 |
| 24 | Impact on third sector | 3 | 2 | 1 | 4 | 6 | 5 |
| 25 | Impact on public sector | 2 | 1 | 4 | 5 | 3 | 6 |
| 26 | Resource consumption | 6 | 3 | 1 | 4 | 5 | 2 |
| 27 | Travel and transportation | 6 | 3 | 1 | 4 | 5 | 2 |
4.7.10 Summary of the scoring
4.179. Table 5 provides a summary of the scoring against all the criteria.
Table 5 - Option performance against all individual criteria
| Criteria | Strongest | 2nd | 3rd | 4th | 5th | Weakest | |
|---|---|---|---|---|---|---|---|
| 1 | Flexibility, choice and communication | 2 | 4 | 1 | 3 | 5 | 6 |
| 2 | Simplicity and support alignment | 3 | 6 | 2 | 1 | 4 | 5 |
| 3 | Assessments | 6 | 2 | 1 | 4 | 3 | 5 |
| 4 | Governance and accountability | 1 | 4 | 2 | 5 | 3 | 6 |
| 5 | Organisational culture | 2 | 1 | 4 | 6 | 3 | 5 |
| 6 | Public perception of claimants | 4 | 6 | 1 | 2 | 3 | 5 |
| 7 | Interaction with various groups | 1 | 4 | 2 | 6 | 3 | 5 |
| 8 | Take up | 1 | 2 | 4 | 6 | 3 | 5 |
| 9 | Income and poverty | 1 | 4 | 2 | 3 | 5 | 5 |
| 10 | Consistency and fairness | 1 | 2 | 4 | 5 | 3 | 6 |
| 11 | System efficiency and flexibility | 2 | 1 | 4 | 5 | 3 | 6 |
| 12 | Alignment with reserved benefit system | 1 | 2 | 3 | 4 | 5 | 6 |
| 13 | Alignment with other public services | 6 | 3 | 1 | 4 | 2 | 5 |
| 14 | Control | 1 | 2 | 4 | 3 | 6 | 5 |
| 15 | Transparency | 1 | 4 | 3 | 2 | 5 | 6 |
| 16 | Scale of change | 3 | 1 | 4 | 2 | 5 | 6 |
| 17 | Timescales | 5 | 3 | 1 | 4 | 2 | 6 |
| 18 | Risk | 3 | 2 | 1 | 4 | 5 | 6 |
| 19 | Public perception of system | 1 | 2 | 4 | 3 | 6 | 5 |
| 20 | Assessment employees | 6 | 3 | 2 | 5 | 1 | 4 |
| 21 | Non-assessment employees | 2 | 1 | 4 | 3 | 6 | 5 |
| 22 | Regeneration | 4 | 1 | 2 | 3 | 5 | 6 |
| 23 | Impact on private sector | 5 | 1 | 4 | 2 | 3 | 6 |
| 24 | Impact on third sector | 3 | 2 | 1 | 4 | 6 | 5 |
| 25 | Impact on public sector | 2 | 1 | 4 | 5 | 3 | 6 |
| 26 | Resource consumption | 6 | 3 | 1 | 4 | 5 | 2 |
| 27 | Travel and transportation | 6 | 3 | 1 | 4 | 5 | 2 |
4.8 Assigning option scores against each broad criteria set
4.180. The tables in this section assign the rank to each option for each individual criterion. The ranks are added up for each option and the scores are used to rank options within each of the 5 broad criteria sets.
4.181. For example, option 3 is ranked third against Flexibility, choice and communication, which means it was assigned a score of 3 for that criteria. Option 2 ranked first against the same criteria and hence was assigned a score of 1. Following this logic, options that ranked high received lower scores in total, which is indicated in the following tables in colour green. Options that ranked low were assigned high scores, indicated by colour red. Adding up all scores for the 6 Dignity and Respect criteria, option 1 is assigned the third lowest score, which makes it rank third against this broad criteria set.
Dignity and Respect
Equality and Poverty
Efficiency and Alignment
Implementability and Risk
Economy and Environment
This overall rank is used in conjunction with costs information from the Financial Case (see following section) to examine the VFM of possible choices in Section D of this OBC.
4.182. The overall results are presented in Table 6.
Table 6 - Overall rank by each main criteria in MCA
4.183. This overall rank is used in conjunction with costs information from the Financial Case (see following section) to examine the VFM of possible choices in Section D of this OBC.
Contact
Email: Andy Park
Phone: 0300 244 4000 – Central Enquiry Unit
The Scottish Government
St Andrew's House
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