Devolved Social Security assistance: up-rating for inflation in 2024-2025

A report on the impact of inflation on devolved social security assistance as required under section 86A of the Social Security (Scotland) Act 2018.

2. Background

2.1 In 2019, the Scottish Government prepared an analytical report that provided a detailed review of relevant inflation measures to inform the options available to Scottish Ministers for up-rating devolved social security assistance. The analytical report explored in depth the methodologies of inflation measures and drew on a range of evidence including recommendations from the UK Statistics Authority and the Office for National Statistics, an independent review led by the Director of the Institute of Fiscal Studies[6] and the House of Lords Economic Affairs Committee's report 'Measuring Inflation'[7].

2.2 The analytical report informed a policy paper that set out the Scottish Government's approach to up-rating social security assistance. Both papers[8] were provided to the Social Security Committee and the Scottish Commission on Social Security on 2 September 2019.

2.3 The policy paper recommended that the annual September rate of the Consumer Price Index (CPI) be used for up-rating devolved social security assistance in the short-term, with the assistance payment rounded to the nearest five pence. The annual rate of CPI to September 2023 published on 18 October 2023 was 6.7%.

2.4 Overall, the Scottish Commission on Social Security was supportive of the Scottish Government's up-rating policy of using the annual September CPI rate to up-rate social security assistance at least in the short-term. The Scottish Commission on Social Security set out recommendations[9] for the Scottish Government approach to benefit up-rating in terms of the significance of Social Security principles and human rights, the shorter-term and the longer-term approach to up-rating. The Scottish Government responded[10] to these recommendations and will keep the recommendations under consideration to inform the development of future up-rating as more forms of assistance are introduced and reported on.

2.5 The Social Security Committee noted the Scottish Government's position on up-rating of devolved assistance and had no further views to report beyond the discussion at the Committee on 10 October 2019[11].

2.6 On 29 January 2024, the Scottish Government published a report setting out a Multi-Criteria Decision Analysis in accordance with HM Treasury Green Book guidance of the options of inflation metric and period available to up-rate devolved social security assistance. After assessing the various options against a set of carefully chosen criteria, it was recommended that devolved social security assistance should be up-rated in April 2024 (where Scottish Ministers are required to up-rate under section 86B or where they choose to do so for those benefits which are discretionary to up-rate) using the annual September 2023 rate of CPI, ranking highest in the scoring of multi-criteria options.

2.7 The following sections provide detail of how the inflation-adjusted levels of assistance were calculated, what the inflation-adjusted levels of assistance would be and what the Scottish Ministers intend to do.



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