Implementation of the Scotland Act 2016: third report

7. Chapter Seven – Social Security & Employability

Part 3 of the Scotland Act 2016 contains 14 sections relating to social security and employment support. The provisions in these sections of the Act give the Scottish Parliament greater powers to ensure that social security in Scotland is tailored to the needs of Scottish citizens. Once transferred, the Scottish Parliament and the Scottish Government will be responsible for social security benefits ultimately worth around £3.3 billion of spending each year in Scotland.

7.1 Social Security

Key Developments

• The Social Security (Scotland) Act 2018 received Royal Assent on 1 June 2018 and we have started to deliver our first benefits.

• Social Security Scotland was established in September 2018 and now employs more than 350 people based at its interim headquarters in Dundee and a second site in Glasgow.

• The first payments of Carer's Allowance Supplement were made in September 2018.

• The Best Start Pregnancy and Baby Payment was launched on 10 December 2018 with payments of £2.7 million made to families across Scotland by 31 January 2019.

Costs

£m	2016-17	2017-18	2018-19 forecast
Administration	N/A	2.3	16.0
Implementation	5.0	18.7	59.6

7.1.1 During 2018-19 the Scottish Government spent £59.6 million on its social security programme. As in previous years, spend on the social security programme in 2018-19 continued to be funded from the centrally-held budget relating to Scotland Act 2016 non-tax implementation. This approach allowed Scottish Ministers to respond flexibly to the needs of a complicated policy area through the first years of implementation.

7.1.2 The Scottish Budget 2019-20 is the first year that sets out the Social Security budget in a separate budget line, providing more transparency to the Scottish Parliament and the public. Total social security assistance forecast expenditure is £435 million in 2019-20. Benefit expenditure is demand-led and budget allocations are based on Scottish Fiscal Commission forecasts. Scottish Government officials will monitor actual spend against forecasts closely and manage any variances in-year.

Social Security (Scotland) Act

7.1.3 The Social Security (Scotland) Act 2018 received Royal Assent on 1 June 2018. The Act sets out the over-arching legislative framework for the Scottish Government's social security powers. The Act sets out 8 principles on which the Scottish social security system is based. The Act also requires the Scottish Government to develop a Social Security Charter which sets out what is expected of Ministers when developing and delivering devolved benefits. The Charter also sets out what is required from individuals who apply for and receive assistance.

7.1.4 The Social Security Charter was approved by Parliament on 6 February 2019. It has been designed by people with lived experience. Stakeholders such as the Scottish Human Rights Commission and Scottish Public Services Ombudsman have provided advice and guidance to the core group. The co-design is an innovative model of human rights based policymaking. It is intended to be a powerful and ambitious statement of how the human right to social security will be realised in practice by the new Scottish system.

7.1.5 The Social Security (Scotland) Act 2018 establishes the Scottish Commission on Social Security, an independent scrutiny body. Scottish Ministers have appointed Dr Sally Witcher OBE as Chair, along with Ms Sharon McIntyre, Ms Judith Paterson and Dr Mark Simpson as Board Members. They took up post on 23 January 2019.

Social Security Scotland

7.1.6 Social Security Scotland was established in September 2018, as an Executive Agency of the Scottish Government, and will deliver its services in accordance with the eight principles set out in the Social Security (Scotland) Act 2018 and the Social Security Charter. Foremost amongst these principles is the requirement that people be treated with dignity, fairness and respect.

7.1.7 Its interim Corporate Plan explains how it will do this by setting out its strategic objectives and linking them directly to the principles in the Act. The interim Corporate Plan is currently being consulted on, to ensure that it properly reflects our clients' and stakeholders' expectations of our service and an updated version will be published before the end of the year. Social Security Scotland will contribute to the Scottish Government's wider outcomes based approach, which is set out in the National Performance Framework. Social Security Scotland is providing advice and support to people applying for assistance and will ultimately make the payments for all the devolved benefits. In 2018-19, Social Security Scotland commenced delivery of the Carer's Allowance Supplement and the pregnancy and baby element of Best Start Grant.

Benefits

7.1.8 Carer's Allowance Supplement, our first benefit, was delivered from September 2018, putting £442 into the pockets of over 75,000 carers with two lump sum payments of £221, an investment of over £33 million. All payments were issued on time, using a communications approach co-designed with carers and the organisations who represent them.

7.1.9 The Best Start Pregnancy and Baby Payment was introduced on 10 December 2018 to replace the UK Government's Sure Start Maternity Grant. On 6 March Parliament approved regulations which create the Best Start Early Learning and School Age payments by summer 2019. Since opening for applications on Monday 10 December, Social Security Scotland has made payments to more than 7000 low income households. The support provided to families across Scotland, as of 31 January 2019, totals £2.7 million.

7.1.10 Funeral Expense Assistance is on course to be delivered in summer 2019, improving the support available to lower income families struggling with funeral costs. Funeral Expense Assistance will replace the current DWP Funeral Payment in Scotland. Funeral Expense Assistance regulations were laid in Parliament on 18 January 2019 and approved on 6 March 2019.

Scottish Welfare Fund and Discretionary Housing Payments

7.1.11 In addition to benefits devolved in 2018-19, funding for the Scottish Welfare Fund, Discretionary Housing Payments (which are delivered through local authorities), and flexibilities for Universal Credit (UC) continued. In 2018-19 there was a total investment of over £100 million in Discretionary Housing Payments and the Scottish Welfare Fund. Responsibility for Discretionary Housing Payments was devolved to the Scottish Government on 1 April 2017, making it the first social security scheme to be devolved to Scotland following the Scotland Act 2016.

7.1.12 The Scottish Welfare Fund is a vital lifeline for people across Scotland providing £38 million per annum to councils. From 1 April 2013 until 30 September 2018, 316,095 individual households in Scotland have been helped with awards totalling £181.6 million. 171,715 (54%) were single person households and 104,805 (33%) were families with children.

Universal Credit (Scottish choices)

7.1.13 The Scottish Government is using the limited powers devolved under the Scotland Act 2016 to try and make the delivery of Universal Credit (UC) better suited to the needs of those who claim it through the UC Scottish choices. Since 4 October 2017, people in Scotland have been given the choice to receive their UC award either monthly or twice monthly and have their housing costs paid directly to their landlord.

7.1.14 The Scottish Government is also committed to splitting payments of UC between members of a couple in a household to ensure that everyone has access to an independent income based on their individual circumstances, and to promote equality in the welfare system. We have now established two policy options which we think represent the most feasible ways to split payments of UC and have taken these to the DWP to carry out a formal impact assessment. This will allow the Scottish Government to progress with refining its split payments policy based on what is technically feasible within the Department for Work and Pensions' (DWP) IT systems, and to get a sense of cost and operational requirements for delivery.

Welfare Foods

7.1.15 Section 27 of the Scotland Act 2016 came into force on 8 February 2019, devolving all functions relating to the subject-matter of section 13 of the Social Security Act 1988 (benefits under schemes for improving nutrition: pregnant women, mothers and children). These schemes are referred to as Welfare Foods and include the Healthy Start and Nursery Milk Schemes.

7.1.16 With section 27 coming into force, Scottish Ministers will be able to make and lay regulations using the power in section 13 of the 1988 Act to establish a replacement scheme in Scotland, called Best Start Foods.

7.1.17 Best Start Foods will come into place in Summer 2019 and will replace the Healthy Start Vouchers with a new smartcard, increase payments from £3.10 to £4.25 and expand the range of foods available through the scheme.

7.1.18 On the 8 February 2019, a section 93 Order also came into force, to enable the functions relating to Welfare Foods to be exercised via Agency Arrangement on behalf of Scottish Ministers by a Minister of the Crown. This Agency Arrangement allows for the UK Government to continue to administer the Welfare Foods schemes whilst we transition to the Scottish replacement schemes.

7.1.19 The Scottish Government continues to work closely with the UK Government's Department of Health and Social Care on the transition of Welfare Foods.

7.2 Employability

Key Development

• Delivery of the Fair Start Scotland programme

Costs

£m	2016-17	2017-18	2018-19 forecast
Administration	1.5	3.4	3.4
Implementation	1.3	2.2	0.2

7.2.1 Fair Start Scotland (FSS) provides tailored, person centred support to people who need help to find and stay in work and get the support they need to achieve their full potential. FSS is different to previous UK Government provisions as participation is completely voluntary.

7.2.2 The Scottish Government contracted service providers to deliver this service across nine contract package areas and the Scottish Government are working with them to implement and deliver support tailored to participants' individual needs.

7.2.3 Scottish Ministers are committed to supporting the delivery of devolved employability services with additional investment of up to £20 million per annum from 2018, significantly above funding transferred under the Fiscal Framework Agreement.

7.2.4 The Scottish Government continues to work closely with the DWP on delivery of the FSS service, including budgeting and monitoring costs.