Publication - Report

Scotland Act 2012 financial provisions implementation: fifth annual report

Published: 24 Apr 2017
Financial Strategy Directorate
Part of:

Progress report on the implementation of provisions in the 2012 Act, including income tax and social security.

26 page PDF

380.1 kB

26 page PDF

380.1 kB

Scotland Act 2012 financial provisions implementation: fifth annual report
Chapter 8 - Social Security and Employability

26 page PDF

380.1 kB

Chapter 8 - Social Security and Employability

Social Security

Scotland Act 2016.

88. 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 which in 2015-16 accounted for around £2.8 billion of spending in Scotland.

89. Transferring the devolved benefits safely presents a challenge on a scale unlike anything the Scottish Government has faced since devolution. Meeting this challenge requires a large-scale programme of transition, legislation and implementation. Change of this magnitude carries risks: the safe and secure transition of every claimant and every payment will be paramount, to ensure nobody falls through the gaps.

90. A Joint Ministerial Working Group on Welfare ( JMWGW) and Joint Senior Officials Group have been established to facilitate joint working between the Scottish Government and DWP to oversee the transition of social security supported by comprehensive and independently assured governance bodies at Departmental level. Since the Scotland Act 2016 received Royal Assent there have been three JMWGW meetings. Minutes agreed from the meeting are made publicly available to both Parliaments by the UK and Scottish Governments respectively.

91. The JMWGW has agreed a phased approach for the commencement of the Welfare Benefits and Employment Support part (Part 3) of the Scotland Act 2016. Tranche 1 which was commenced on 14 July 2016 [21] relates to:

24: Discretionary payments: top-ups of reserved benefits
25: Discretionary Housing Payments
26: Discretionary payments and assistance
28: Powers to create other new benefits;
29: Universal credit: costs of claimants who rent accommodation
30: Universal credit: persons to whom, and time when, paid
31: Employment support
32: Functions exercisable within devolved competence
33: Social Security Advisory Committee and Industrial Injuries Advisory Council
34: Information-sharing
35: Extension of unauthorised disclosure offence.

92. The remaining sections, proposed for Tranche 2, are more complex as they transfer responsibility for existing and on-going benefits and will have more potential to negatively impact those receiving them if not transferred carefully. These are: section 22, which transfers responsibility for existing and on-going benefits relating to disability, industrial injuries and carers benefits; and section 23, which covers benefits for maternity, funeral and heating expenses.

93. At the JMWGW on 11 October 2016, Ministers agreed:

"… that officials should work to commence sections 22 and 23 of the Scotland Act with an approach of splitting legislative and executive competence, with the intention of legislative competence passing by June 2017 and executive competence passing by April 2020. Thereafter, agency agreements would be put in place as necessary."

94. Commencement and transitional regulations which will deliver this approach have been made by the UK Government and were shared with Scottish Government officials before being laid. The regulations deliver the split commencement approach and incorporate key safeguards.

95. At the JMWGW on 20 February, 2017 Ministers agreed that the UK Government should proceed to make and lay regulations in the UK Parliament on or around the 10 April. In the event, these were laid slightly earlier, on 22 March. The Commencement Regulations are due to come into force, with no further procedure required, on 17 May.

96. The Scottish Government and DWP have developed close working relationships across a number of areas, including delivering the Scottish Government's changes to Universal Credit, information sharing and appraising options for implementing the Scottish Government's commitment to increase the rate of Carer's Allowance.

Social Security Bill.

97. In the 2016-17 Programme for Government, the Scottish Government made a commitment to bring forward a Social Security Bill within the first year of the new Parliament in order to implement powers transferred via the 2016 Scotland Act.

98. On 29 July the Scottish Government issued a public consultation, " A New Future for Social Security, Consultation on Social Security in Scotland", to inform the content of the new Scottish Social Security Bill. The consultation set out the vision and key principles for social security in Scotland. The consultation was in three parts, covering:

  • a principled approach;
  • the devolved benefits;
  • operational policy.

99. In addition to the formal consultation, the Scottish Government held over 120 events carried out with partners across 32 local authorities in Scotland between July to October 2016. These events provided stakeholders with the opportunity to communicate their views and contribute to the development of the proposals contained in the Bill. The independent analysis of the consultation responses, by Research Scotland, along with the Scottish Government response were published on 22 February 2017.

100. One of the key principles of Social Security in Scotland is that the processes, procedures and systems will be designed and built with and for the people of Scotland. To do that, at least 2,000 people with direct personal experience of the current social security system are being invited to join 'Experience Panels'. As part of this recruitment, the DWP sent personal invitations to 18,000 people on behalf of the Scottish Government who have recent or current experience of the social security system. The Experience Panels will bring together groups of people who are willing to share their views of how the current system works, and how it could and should work. We will collaborate over the next four years with these Experience Panels to design and build Scotland's new Social Security system.

Scottish Social Security Agency.

101. In March 2016, Scottish Ministers announced their decision to establish a new executive agency to oversee the delivery of the devolved social security powers. The decision to create an agency was taken after considering a range of evidence and in consultation with stakeholders, who indicated support for administering benefits through a public body which is part of the Scottish Government and accountable to Scottish Ministers.

102. The Scottish Government has undertaken a detailed second stage options appraisal to examine in greater detail how the new agency can best deliver in a way that is aligned with our core principles of fairness, dignity and respect, and achieves value for money.

103. The Scottish Government has again taken a co-production approach to this work by involving a number of partners to work alongside us to determine and assess the options appraisal criteria. We will announce the conclusions of this work and a preferred model for delivery in spring 2017.

104. The Scottish Government already spends more than £70m per year on social security, prior to further social security devolution under the Scotland Act 2016. As part of our measures to tackle poverty, we have also invested over £1 billion in the Council Tax Reduction scheme since 2013-14, assisting almost half a million households each year to meet their council tax, and established the Scottish Welfare Fund which provides support to people in crisis and low income households.

105. The Scottish Budget announced on 15 December 2016 indicated that further spend in 2017-18 on the developing social security programme will be funded from the centrally held budget relating to Scotland Act 2016 non-tax implementation (£80m). Implementing a new social security system for Scotland is a highly complex exercise and we are continuing to develop detailed costed plans.


106. Employability Powers in place under section 31 of the Act have been implemented from 3 April 2017. One year transitional services, Work First Scotland and Work Able Scotland will provide continuity of support for up to 4,800 people with a disability or long term health condition. From April 2018, Fair Start Scotland ( FSS) will support at least 38,000 disabled people or those at risk of long term unemployment over the course of three years of referrals up to March 2021. Action to procure FSS services in 9 contract areas covering Scotland is underway with contracts expected to be awarded in October 2017. Scottish Ministers are committed to supporting the delivery of devolved employability services, with additional investment of up to £20m in 2017-18 and an additional £20m per annum from 2018 significantly enhancing the Fiscal Framework settlement. The Scottish Government continues to work closely with the DWP on implementation, and delivery of the 2017 and 2018 services.


Email: David Ferguson

Phone: 0300 244 4000 – Central Enquiry Unit

The Scottish Government
St Andrew's House
Regent Road