Social security agency: central functions location analysis
Report setting out evidence base for making a decision on where the social security agency’s centrally based functions will be located.
The devolution of social security to Scotland is an integral part of the wider constitutional reform agenda of the Scottish Government following the Scotland Act 2016. These new social security powers will be delivered by an agency. The Outline Business Case ( OBC) for the agency for social security in Scotland  determined that the agency would have centrally based functions supported by local agency staff embedded in existing services. This report sets out the evidence base for making a decision on where these centrally based functions will be located. The analysis presented in this report follows the multi-criteria analysis approach employed in the Outline Business Case, but is executed using quantitative indicators. This approach means that the resulting analysis is both transparent and data-driven.
It is important to note that this analysis does not attempt to provide the answer to the question of where the agency should be located. Instead it is designed to provide the evidence base for a considered short-list on which Scottish Ministers can then make a decision in line with their vision for social security in Scotland.
Social security delivery model – decision making process
The work to establish the role and location of the new social security agency has been undertaken in 3 broad stages:
- Stage 1 examined options for governance for social security and was completed in March 2016  . It determined that a new body - an agency - was needed to deliver the devolved benefits.
- Stage 2 examined different models of delivery with respect to the functions of the new agency. This options appraisal was published as an Outline Business Case  . Based on this, the Minister for Social Security announced in April 2017 that the agency would have centrally based functions supported by local agency staff embedded in existing services to provide advice and support. The scale of the central functions workforce was quantified and, whilst the work is ongoing to refine these numbers, the lower-end estimate is that 1,500 full-time equivalent staff will be required.
- Stage 3 of the process is the analysis contained in this report to inform Ministerial decisions around the location for the central functions of the agency. This delivers on the commitment made by the Minister for Social Security that the location decision will be based on a "systematic, evidence based approach, taking into account a variety of socio-economic factors and using the same multi-criteria framework used for the wider options appraisal" 
The approach to Stage 3 (location analysis)
To ensure consistency, and in line with the Ministerial statement, the Stage 3 location analysis is based on the same broad framework of multi-criteria analysis that was employed to set out a Socio-Economic case in the OBC. The analysis is made up of 3 Phases and this report details the methodology used in Phase 1 and Phase 2 which have now been completed.
Phase 1 consisted of a high level analysis of all 32 Local Authorities, which ruled out 17 Local Authority areas for clear operational reasons based on a high level assessment against selected criteria. The remaining 15 Local Authority areas were shortlisted for further detailed assessment at Phase 2.
Phase 2 considered detailed quantitative evidence against an expanded set of criteria which resulted in a recommended shortlist of 4 Local Authorities.
Phase 3 analysis - the next phase in the process - will now begin. It will involve site identification by a detailed property search within the preferred location option selected by Ministers and a full assessment of site suitability.
Phase 1 of location analysis
Phase 1 involved high level analysis to reduce the 32 Scottish Local Authorities to a more manageable number for detailed consideration at Phase 2. This was done by looking at a limited set of indicators that focused on key operational issues as well as the scope for impact on local economies. Fifteen Local Authorities were shortlisted as a result. These included:
- The four largest Scottish cities because they allow access to a large labour force that is required for recruiting staff for the agency.
- Areas around the central belt due to population concentrations, access to workforce in cities and regeneration needs.
- Areas that underwent weakening in economic performance most recently such as Aberdeenshire.
17 Local Authorities were ruled out at Phase 1 because they were found to be too remote to allow the agency to recruit 1,500 staff at the right skill level for its central functions and/or have limited need for regeneration or job creation relative to other areas.
Phase 2 of location analysis
Phase 2 involved detailed analysis of the 15 Local Authorities shortlisted in Phase 1. Similarly to Phase 1, Local Authorities were chosen as the unit of geographical analysis because of the richness of the dataset at this level of breakdown which would not be available at a more disaggregated level.
The analysis also followed the multi-criteria approach employed in the Outline Business Case for the Social Security System and used extensive quantitative data to rank options.
The data was used to rank the 15 Local Authorities against 4 broad criteria: Economy and Environment (Inclusive Growth), Implementability and Risk (Ability to Recruit), Equality and Poverty (Regeneration) and Dignity and Respect (Contribution to Local Delivery). Performance against these 4 broad criteria was assessed using 12 indicators, which were made up of 43 sub-indicators.
The Phase 2 approach is presented schematically in Figure ES1. All quantitative information is provided in the individual Local Authority profiles in Section 5.
Figure ES1 – Phase 2 analysis – OBC criteria, location criteria and indicator sets
Recommended Phase 2 shortlist
The scores for each Local Authority against each of the 4 broad criteria – Economy and Environment, Implementability and Risk, Equality and Poverty and Dignity and Respect were weighed equally to derive an overall ranking.
Using equal weighting for all criteria, based on aggregate scores, Glasgow City, North Lanarkshire and North Ayrshire came out as the 3 top ranking Local Authority areas.
Inverclyde and West Dunbartonshire were ranked equally as 4 th most suitable, followed by South Lanarkshire and Dundee City as 6 th and 7 th.
Although North Ayrshire, Inverclyde and West Dunbartonshire had high overall scores, they were also identified as being some of the most challenging areas for recruitment among the 15 Local Authorities considered at Phase 2.
This key delivery risk around the agency's ability to recruit can be managed by making robust performance against Ability to Recruit a limiting criteria in the selection of a shortlist.
To do this, Local Authorities that have both above median aggregate scores and above median Ability to Recruit scores have been chosen as a shortlist.
Therefore, despite their high scores overall, Local Authorities identified as being more challenging for recruitment were not included in the shortlist.
This approach is presented in Figure ES2. The Local Authorities that fall into the green shaded area have been recommended for further consideration.
These are Glasgow City, North Lanarkshire, South Lanarkshire, and Dundee City.
Figure ES2 - Phase 2 analysis results
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