The Welfare Foods (Best Start Foods) (Scotland) Amendment Regulations 2023: business and regulatory impact assessment

Summary and Recommendation

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

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

It has been a longstanding commitment that we will remove the income thresholds which apply to some qualifying benefits for BSF this parliamentary term. These regulations enable that change. We have also taken the opportunity to make a number of other improvements to BSF. We consider that combining these with the legislation to remove the income thresholds is the most effective and timely way to make these improvements and ensure the payments are delivered 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 all families with a pregnant person or child under three who receive a qualifying benefit, regardless of their other income. They will also allow us to improve access for young parents and their children, align BSF further with BSG and SCP and make some technical changes to how we make payments.

Summary costs and benefits table

Total benefit per annum:

• economic, environmental, social

Approximately 20,000 individuals will become eligible to receive BSF as a result of removing the income thresholds. Furthermore, those who have fluctuating incomes from work will be less likely to move in and out of BSF eligibility.

More pregnant persons and children will be eligible as a result of making WTC a qualifying benefit in its own right.

Improving access for young pregnant persons, partners of pregnant persons and parents will result in more individuals being eligible to receive support, some children receiving support for longer and take-up may also be improved as a result of eligibility for these young people being simplified.

Ensuring entitlement to BSF continues for a period of eight weeks when entitlement to Child Tax Credit, Working Tax Credit, Income Support, Income-based Jobseekers Allowance, Income-related Employment and Support Allowance, Pension Credit or Housing Benefit ends will mean all children will continue to benefit from the support that BSF provides when their family’s income is in transition.

By increasing the number of individuals who are eligible for BSF and ensuring entitlement to BSF continues for a period of eight weeks when entitlement to Child Tax Credit, Working Tax Credit, Income Support, Income-based Jobseekers Allowance, Income-related Employment and Support Allowance, Pension Credit or Housing Benefit ends, more money will be spent on healthy food and milk in local economies which will have a positive impact for food retailers that sell these products. It may also result in less demand on health services as individuals have improved access to a healthy diet and therefore may be more likely to be of a healthy weight.

Making explicit that where they have legal capacity to be paid, entitled young pregnant persons, partners of a pregnant person and young parents to an entitled child who is under three can be paid BSF in their own right will help to empower young parents and also mitigate the risk of financial coercion or abuse. Furthermore, this change will make clear that pregnant persons, partners of pregnant persons and young parents to an entitled child who are under 16 and who are not dependent upon anyone, are able to access a payment.

Furthermore, we will make the individual who a pregnant person is dependent on and the partner of that individual, eligible to receive BSF so that young parents can have choice in how they access the benefit.

Putting it beyond doubt that payments can be made in a way other than the prepaid card could have a positive impact on some individuals with a disability or long term health condition who find that due to their needs, the card is not accessible. This clarity could also be helpful for some young pregnant persons and parents as there is a lower age threshold which is applied to the prepaid card.

Other changes we are making to further align eligibility and procedures for BSF with BSG and SCP are expected to make entitlement simpler to understand and therefore make it easier to access BSF, supporting increased take-up of the payments. The changes will also reduce the need for some individuals to have to reapply for BSF.

Ensuring that all individuals are able to access their entitlement and improving take-up will help ensure that those who are eligible for BSF utilise the financial support it provides. This will have a positive impact for food retailers that sell healthy food and milk. It may also result in less demand on health services as individuals have improved access to a healthy diet.

Reducing the need for some individuals to have to reapply or submit a review request for BSF could reduce the demand on Social Security Scotland as they will be able to award BSF without having to process a new application or internal review.

Total cost per annum:

• economic, environmental, social
• policy and administrative

The SFC have forecast the financial impact of removing the income thresholds,[33] as set out in the table in the above costs section. In the long term, the removal of the income thresholds are expected to cost the Scottish Government around £6m a year.

For the remaining changes proposed, there are no significant financial implications associated with the creation of regulations to achieve the stated policy aim. The additional benefit expenditure resulting from these changes is estimated to be approximately £130,000 in 2024-25 but this figure will decrease slightly in future years as clients transition from legacy benefits to Universal Credit.

As a result of increasing eligibility for BSF there will be increased demands on Social Security Scotland operational staff who will have to process applications for the additional caseload.

As a result of making changes to the eligibility and procedural rules, there will be increased demands on technical staff within Social Security Scotland who are required to design and implement the planned changes.

There may be a burden on advice services who will have to invest time in learning about the new eligibility and procedural rules for BSF.