Fiscal framework outturn report: 2022

The Fiscal Framework Outturn Report 2022 publishes outturn and reconciliation information for Scottish Income Tax, Scottish Landfill Tax, Land and Buildings Transaction Tax and devolved Social Security benefits, as well as updates on borrowing and the Scotland Reserve.


7. Social Security

53. This section contains the latest outturn and forecasts available on expenditure and BGAs for Social Security benefits from 2021-22 onwards, and the net effect on the Scottish Budget. This report uses provisional 2021-22 outturn expenditure data for Scottish Social Security benefits expenditure; the final outturn data will be available as part of Social Security Scotland’s Annual Reports and Accounts, published by November 2022. The Block Grant Adjustments are based on provisional UK Government Social Security benefits expenditure; final outturn data will be confirmed when the UK Government publishes its Local Authority, Parliamentary, and Country and Regional Tables 2021/22 later this year.

54. For Social Security payments, forecasts are of spending rather than revenues and Block Grant Adjustments are therefore additions rather than deductions. Otherwise, the process of reconciling forecasts to outturn data functions in the same way as for the fully devolved taxes.

55. Table 14 shows the SFC’s latest expenditure forecasts for the Social Security benefits expenditure that have been devolved so far, as published in the SFC’s Scotland’s Economic and Fiscal Forecasts on 31 May 2022[12], and the Block Grant Adjustment estimates provided at the UK Spring Statement on 23 March 2022. The forecast shows increasing divergence between Social Security benefits expenditure and BGAs which is largely driven by Scottish Government policy decisions to provide a more compassionate and generous benefits system.

Table 14: Latest Social Security expenditure forecast for benefits with a corresponding Block Grant Adjustment 1 and Block Grant Adjustments data (£ million) 2
Outturn SFC Forecast
2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28
Carer's Allowance3 Expenditure -295 † -321 -366 -424 -486 -540 -571
BGA 293 † 318 362 393 423 459 N/A
Net effect on Budget -2 † -3 -4 -31 -63 -80 N/A
Attendance Allowance Expenditure -525 † -539 -591 -642 -691 -728 -764
BGA 517 † 539 594 626 649 672 N/A
Net effect on Budget -8 † -1 3 -17 -41 -56 N/A
Adult Disability Payment4 Expenditure1 -1,784 † -2,044 -2,579 -2,921 -3,196 -3,484 -3,783
BGA 1,754 † 1,953 2,298 2,566 2,799 3,014 N/A
Net effect on Budget -30 † -90 -280 -355 -396 -469 N/A
Disability Living Allowance5 Expenditure2 -697 † -714 -744 -738 -720 -705 -684
BGA 705 † 698 732 713 677 682 N/A
Net effect on Budget 8 † -16 -12 -25 -43 -22 N/A
Industrial Injuries Disablement Scheme6 Expenditure -81 † -80 -83 -84 -83 -83 -83
BGA3 81 † 79 83 82 80 79 N/A
Net effect on Budget 0 † -1 -1 -1 -2 -5 N/A
Severe Disablement Allowance Expenditure -7 † -6 -6 -5 -5 -4 -4
BGA 7 † 6 6 5 5 4 N/A
Net effect on Budget 0 † 0 0 0 0 0 N/A
Winter Heating Payment4 Expenditure N/A -20 -20 -20 -20 -20 -20
BGA N/A 8 8 7 7 7 N/A
Net effect on Budget N/A -13 -13 -13 -13 -13 N/A
TOTAL SOCIAL SECURITY Expenditure -3,389 -3,725 -4,389 -4,835 -5,200 -5,564 -5,910
BGA 3,357 3,602 4,082 4,393 4,641 4,919 N/A
Net effect on Budget -32 -123 -307 -442 -558 -645 N/A

Note 1: This table details only the forecast expenditure for the Social Security benefits with a corresponding BGA and does not include: (i) forecasts for smaller benefits, funding for which is baselined into the core Block Grant, nor (ii) newly introduced Scottish benefits, which are funded from within the Scottish Government's Budget, namely: Best Start Foods, Best Start Grant, Carer’s Allowance Supplement, Child Winter Heating Assistance, Funeral Support Payment, Scottish Child Payment, Discretionary Housing Payments, Employability Services, Self-Isolation Support Grant, Scottish Welfare Fund.

Note 2: There are minor differences in the methodology used to calculate the SFC’s spending forecasts and the BGA forecasts, which are based on expenditure outturn and OBR forecasts, so comparisons should be interpreted with caution.

Note 3: Carer's Allowance Expenditure Forecast does not include Carer's Allowance Supplement (CAS) expenditure, whereas the Scottish Fiscal Commission includes CAS as part of their Scottish Carer's Assistance indicative forecast.

Note 4: Adult Disability Payment and Winter Heating Payment are the replacement benefits for Personal Independence Payment and Cold Weather Payment respectively.

Note 5: SFC Forecasts for Disability Living Allowance Expenditure from 2021-22 to 2027-28 includes forecast expenditure for the Scottish replacement benefit, Child Disability Payment.

Note 6: BGAs for Industrial Injuries Disablement Scheme includes Industrial Death Benefit.

† Indicates outturn; BGAs are shown as positive as they represent additional funding

56. There are no reconciliations required for Scottish Social Security benefits expenditure, as the Scottish Government manages any variance between forecast and actual expenditure in-year.

57. However, as with the fully devolved taxes, the BGAs for benefits do undergo reconciliations and are reconciled in two stages. An in-year reconciliation is made within the financial year at the UK autumn fiscal event on the basis of the most recent OBR forecasts, and, once outturn data is available in the following financial year, a final reconciliation is applied to the Block Grant for the financial year thereafter (i.e two years after the Budget was set).

58. Table 15 shows the provisional net Budget position for Social Security benefits expenditure for 2021-22.

Table 15: 2021-22 Provisional Outturn Compared with Forecasts (£ million) 1
Expenditure BGA Net Position
Carer's Allowance Forecast as of Budget Act 2021 -306.0 308.7 +2.7
Outturn -295.4 293.2 -2.2
Outturn against forecast +10.6 -15.4 -4.8
Attendance Allowance Forecast as of Budget Act 2021 -549.8 546.4 -3.4
Outturn -524.5 516.8 -7.7
Outturn against forecast +25.3 -29.6 -4.4
Adult Disability Payment2 Forecast as of Budget Act 2021 -1,669.4 1,681.6 +12.3
Outturn -1,784.1 1,754.3 -29.8
Outturn against forecast -114.7 +72.7 -42.1
Disability Living Allowance3 Forecast as of Budget Act 2021 -695.9 684.7 -11.2
Outturn -697.0 704.7 +7.7
Outturn against forecast -1.1 +20.0 +18.9
Industrial Injuries Disablement Scheme4 Forecast as of Budget Act 2021 -80.2 80.8 +0.6
Outturn -81.2 81.0 -0.2
Outturn against forecast -1.0 +0.1 -0.8
Severe Disablement Allowance Forecast as of Budget Act 2021 -6.8 7.3 +0.5
Outturn -6.6 6.6 -0.0
Outturn against forecast +0.2 -0.7 -0.5
TOTAL SOCIAL SECURITY Forecast as of Budget Act 2021 -3,308.1 +3,309.5 +1.4
Outturn -3,388.8 +3,356.5 -32.3
Outturn against forecast -80.7 +47.0 -33.7

Note 1: There are minor differences in the methodology used to calculate the SFC’s spending forecasts and the BGA forecasts, which are based on expenditure outturn and OBR forecasts, so comparisons should be interpreted with caution.

Note 2: Adult Disability Payment is the replacement benefit for Personal Independence Payment

Note 3: Outturn and SFC Forecasts for Disability Living Allowance includes expenditure for Disability Living Allowance (Child). This will continue until case transfer to the Scottish replacement benefit, Child Disability Payment, is complete.

Note 4: BGAs for Industrial Injuries Disablement Scheme includes Industrial Death Benefit

Figures may not sum due to rounding.

59. Table 15 shows that the difference between the BGAs used to underpin the Scottish Budget 2021-22 and the provisional outturn BGAs for total Social Security benefits expenditure is positive £47.0 million. As shown in Table 16 below, £3.0 million was added to the Scottish Budget as an in-year reconciliation in 2021-22 and a further provisional final reconciliation of positive £43.9 million is required, which will be applied to the Scottish Budget 2023-24. The net effect of the in-year reconciliation and the final reconciliation equates to the £47 million referenced above.

Table 16: Social Security 2021-22 expenditure BGA Reconciliation (£ million)
BGA Reconciliation
Carer's Allowance Forecast BGA - Scottish Budget 2021* 308.7
Forecast BGA - UK Budget 2022 294.8
In-year reconciliation applied to 2021-22 Block Grant -13.9
Provisional Outturn BGA 293.2
Provisional Reconciliation applied to 2023-24 Block Grant -1.5
Attendance Allowance Forecast BGA - Scottish Budget 2021* 546.4
Forecast BGA - UK Budget 2022 521.5
In-year reconciliation applied to 2021-22 Block Grant -24.9
Provisional Outturn BGA 516.8
Provisional Reconciliation applied to 2023-24 Block Grant -4.7
Adult Disability Payment1 Forecast BGA - Scottish Budget 2021* 1,681.6
Forecast BGA - UK Budget 2022 1,723.3
In-year reconciliation applied to 2021-22 Block Grant +41.6
Provisional Outturn BGA 1,754.3
Provisional Reconciliation applied to 2023-24 Block Grant +31.0
Disability Living Allowance2 Forecast BGA - Scottish Budget 2021* 684.7
Forecast BGA - UK Budget 2022 687.0
In-year reconciliation applied to 2021-22 Block Grant +2.3
Provisional Outturn BGA 704.7
Provisional Reconciliation applied to 2023-24 Block Grant +17.7
Industrial Injuries Disablement Scheme3 Forecast BGA - Scottish Budget 2021* 80.8
Forecast BGA - UK Budget 2022 79.4
In-year reconciliation applied to 2021-22 Block Grant -1.4
Provisional Outturn BGA 81.0
Provisional Reconciliation applied to 2023-24 Block Grant +1.6
Severe Disablement Allowance Forecast BGA - Scottish Budget 2021* 7.3
Forecast BGA - UK Budget 2022 6.7
In-year reconciliation applied to 2021-22 Block Grant -0.7
Provisional Outturn BGA 6.6
Provisional Reconciliation applied to 2023-24 Block Grant -0.1
TOTAL SOCIAL SECURITY Forecast BGA - Scottish Budget 2021* 3,309.5
Forecast BGA - UK Budget 2022 3,312.6
In-year reconciliation applied to 2021-22 Block Grant +3.0
Provisional Outturn BGA 3,356.5
Provisional Reconciliation applied to 2023-24 Block Grant +43.9

* BGAs set at Scottish Budget 2021 rather than UK Budget due to later than anticipated UK Budget

Note 1: Adult Disability Payment is the replacement benefits for Personal Independence Payment.

Note 2: Outturn and SFC Forecasts for Disability Living Allowance includes expenditure for Disability Living Allowance (Child). This will continue until case transfer to the Scottish replacement benefit, Child Disability Payment, is complete.

Note 3: BGAs for Industrial Injuries Disablement Scheme includes Industrial Death Benefit.

Figures may not sum due to rounding.

60. The latest forecasts of the net effect on the Scottish Budget 2022-23 for Social Security benefits are shown in Table 17 below. These figures are indicative only. There have been no updated OBR forecasts since the UK Spring Statement in March 2022 nor SFC forecasts since May 2022 and therefore the latest forecast net effect on the Scottish Budget is indicative.

Table 17: Forecast Social Security Net Budget Position for 2022-23 (£ million)1
Expenditure BGA Net Position
Carer's Allowance Forecast as of Budget Act 2022 -314.9 323.0 8.1
Latest Forecast -321.1 318.3 -2.8
Change -6.1 -4.8 -10.9
Attendance Allowance Forecast as of Budget Act 2022 -544.6 544.5 -0.1
Latest Forecast -539.4 538.6 -0.8
Change +5.3 -5.9 -0.7
Adult Disability Payment2 Forecast as of Budget Act 2022 -1,948.5 1,933.2 -15.3
Latest Forecast -2,043.6 1,953.4 -90.2
Change -95.1 +20.2 -74.9
Disability Living Allowance3 Forecast as of Budget Act 2022 -709.8 687.2 -22.6
Latest Forecast -714.0 698.2 -15.8
Change -4.3 +11.0 +6.7
Industrial Injuries Disablement Scheme4 Forecast as of Budget Act 2022 -80.5 79.2 -1.3
Latest Forecast -80.1 79.3 -0.8
Change +0.5 +0.1 +0.5
Severe Disablement Allowance Forecast as of Budget Act 2022 -6.2 5.9 -0.2
Latest Forecast -6.2 6.2 +0.0
Change +0.0 +0.2 +0.3
Winter Heating Payment2 Forecast as of Budget Act 2022 -21.1 14.2 -6.9
Latest Forecast -20.4 7.6 -12.8
Change +0.7 -6.6 -5.9
TOTAL SOCIAL SECURITY Forecast as of Budget Act 2022 -3,625.6 3,587.3 -38.3
Latest Forecast -3,724.7 3,601.5 -123.2
Change -99.1 +14.2 -84.9

Note 1: There are minor differences in the methodology used to calculate the SFC’s spending forecasts and the BGA forecasts, which are based on expenditure outturn and OBR forecasts, so comparisons should be interpreted with caution.

Note 2: Adult Disability Payment and Winter Heating Payment are the replacement benefits for Personal Independence Payment and Cold Weather Payment respectively

Note 3: Outturn and SFC Forecasts for Disability Living Allowance includes expenditure for Disability Living Allowance (Child). This will continue until case transfer to the Scottish replacement benefit, Child Disability Payment, is complete.

Note 4: BGAs for Industrial Injuries Disablement Scheme includes Industrial Death Benefit

Figures may not sum due to rounding.

61. The change in the forecasts for the BGA reflects the difference between the BGA used in the Budget Act 2022 and the forecast of the BGA provided at the UK Spring Statement in March 2022. The actual in-year reconciliation will be based on updated BGA forecasts provided alongside the next set of OBR forecasts later this year.

Benefits Yet to Commence

62. Responsibility for Cold Weather Payment will formally transfer to the Scottish Government in winter 2022, with a new Scottish benefit – Winter Heating Payment – launching in Scotland to replace it. The Fiscal Framework Outturn Report will first detail the Cold Weather Payment outturn in 2023.

63. Responsibility for Winter Fuel Payment has yet to be transferred to the Scottish Government and therefore these payments are not funded from within the Scottish Budget. The Department for Work and Pensions will continue to make these payments to people in Scotland for winter 2022-23. An update will be provided in due course.

Contact

Email: rebecca.mcewan@gov.scot

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