The Social Security (Miscellaneous Amendment and Transitional Provision) (Scotland) Regulations 2022: business and regulatory impact assessment

Summary and recommendation

In summary, the Scottish Government has identified evidence that the amendments to the FFP regulations will contribute an additional investment into the Scottish economy. It is anticipated that these funds will be used to pay for goods and services. Therefore businesses could benefit from the amendments to the FFP. Any impact to businesses of the amendments to the FFP regulations should be positive.

The Scottish Government have worked closely with stakeholders to identify any potential negative consequences of amending the FFP policies and will continue to do so until the amendments to the FFP regulations are implemented and will continue to monitor the success of the FFP policies after the regulations have been amended.

It has been a longstanding commitment that we will extend SCP to those responsible for children aged 6-15 by the end of this year. These regulations enable that extension. We have also taken the opportunity to make a number of other improvements to the FFP.

We consider that combining these with the legislation to extend SCP eligibility is the most effective and timely way to make these improvements and ensure the payments deliver in the best way possible for the people of Scotland.

The available evidence shows that there is a strong case to amend the current regulations. This will allow us to extend the financial assistance to qualifying families with children aged 6-15, auto-award aspects of the BSG and provide greater support to families living in poverty.

Summary costs and benefits

Option 2 - Proceed with The Social Security (Miscellaneous Amendment and Transitional Provision) (Scotland) Regulations 2022 is being recommended.

Option 1 – Do nothing

Benefits: Economic, environmental, social

No additional expenditure for SCP and BSG by not making amendments to the regulations.

Costs: Economic, environmental, social Policy and administrative

Reputational costs to the Scottish Government by not meeting the Ministerial commitment to roll out SCP to parents of children aged 6-15.

If roll out does not happen 224,000 additional children forecast to benefit due to the roll out of SCP to parents of children aged 6-15, will miss out on SCP. This will impact upon the Scottish Government’s aim of meeting the child poverty targets as outlined in the Child Poverty (Scotland) Act 2017.

If the increase to £25 per child per week, which has the potential to lift 50,000 children out of poverty, reducing overall child poverty by an estimated 5 percentage points in 2023/24 does not happen this would be a reputational cost to Scottish Ministers by not delivering on their commitment in the second Tackling Child Poverty Delivery Plan, ‘Best Start, Bright Futures’.

Not introducing auto award of the BSG Early Learning and School Age Payments could lead to eligible families not receiving their entitlement. There would also be reputational costs of not delivering on commitments. The Scottish Government stated in the 2021-22 Programme for Government that the possibility of auto award for devolved social security benefits would be explored, to maximise take up. The Scottish Government also committed to introducing these auto-awards in the most recent TCPDP.^[35]

Potentially vulnerable cohorts, such as refugees and women forced to leave home as a result of domestic abuse, will not receive the higher rate of the BSG Pregnancy and Baby Payment. The higher rate is designed to help those starting from scratch.

Additional spend that these measures will introduce will not be spent in the economy.

Option 2 – Proceed with the Social Security (Miscellaneous Amendment and Transitional Provision) (Scotland) Regulations 2022

Benefits: Economic, environmental, social

224,000 additional children forecast to benefit due to the roll out of SCP to parents of children aged 6-15, will receive SCP. This will impact positively on the Scottish Government’s aim of meeting the child poverty targets as outlined in the Child Poverty (Scotland) Act 2017.

The increase in the value of SCP to £25 per eligible child per week, could lift 50,000 children out of poverty, reducing overall child poverty by an estimated 5 percentage points in 2023/24. This delivers on the commitment in the second Tackling Child Poverty Delivery Plan, ‘Best Start, Bright Futures’.

Introducing auto award of the BSG Early Learning and School Age Payments will ensure eligible families receive their entitlement. This can also help the Scottish Government meet their 2021-22 Programme for Government commitment to explore the possibility of auto award for devolved social security benefits would be explored, to maximise take up.

Potentially vulnerable cohorts, such as refugees and women forced to leave home as a result of domestic abuse, will receive the higher rate of the BSG Pregnancy and Baby Payment. The higher rate is designed to help those starting from scratch.

Additional spend in the economy as a result of introducing the rollout of SCP to SCP to parents of children aged 6-15, auto award of BSG Early Learning and School Age Payments and awarding the higher rate of BSG Pregnancy and Baby Payment to potentially vulnerable cohorts.

Costs: Economic, environmental, social Policy and administrative

The most recent Scottish Fiscal Commission forecasts in relation to Five Family Payments spend can be found here: Scotland's Economic and Fiscal Forecasts | Scottish Fiscal Commission

The Scottish Fiscal Commission are providing a Supplementary Costing to sit alongside the regulations. This accounts for the launch date of the roll out of SCP to 6-15 year olds and the increase to £25 per eligible child, per week from 14 November which is earlier than SFC had forecast this change taking effect. The Supplementary Costing will be available on their website from the date on which the regulations are laid in parliament.