Pension Age Winter Heating Payment: Business and Regulatory Impact Assessment

Costs

54. The UK Government’s decision to restrict WFP eligibility to those of pension age in receipt of relevant benefits reduced the Block Grant Adjustment funding by £147 million for 2024-2025. The Scottish Government were due to receive around £30 million in Block Grant Adjustment funding for the delivery of PAWHP in 2025/2026, with additional expenditure to be met from within the Scottish Budget. As a result of the UK Government U-turn on WFPs, the Scottish Government are now expected to receive an additional £120 million (total £150 million).

55. The Scottish Fiscal Commission (SFC) has a statutory duty to provide independent and official forecasts of Scottish GDP, devolved tax revenues and devolved social security expenditure. The Protocol for engagement between the SFC and the Scottish Government notes that the SFC may produce forecasts where it considers the policy, or policies, to have a "non-negligible impact on receipts or expenditure. The SFC forecast that 860,000 pensioners in total will receive PAWHP in 2025/26,^[14] with total spending estimated at around £151 million, rising to around £182 million by 2030-31.

56. The payments are not restricted to payment of energy costs and therefore other sectors may also benefit from the investment.

Scottish Firms Impact Test

57. There may be some impact on businesses and third sector organisations operating in Scotland in relation to the way the Social Security Scotland agency delivers the devolved benefits compared to DWP.

58. For PAWHP, the demands placed on third sector organisations and independent advocacy services to provide advice and support for people receiving and enquiring about this payment may change slightly. There may be confusion amongst clients about eligibility or payment rates due to the number of policy changes which have taken place for this benefit in recent times. However, clear communications material will be developed ahead of delivery and given the automated nature of the benefit, this should not require provision of complex advice. In Scotland we have the Scottish social security charter, ‘Our Charter’, which requires that communication and systems are as simple and clear as possible. ^[15]

Competition Assessment

59. The Scottish Government does not believe that PAWHP will have an adverse impact on the competitiveness of businesses or the third sector in Scotland, the UK, Europe, or the rest of the world. PAWHP does not directly or indirectly limit the number of suppliers, nor does it limit the ability of suppliers to compete or reduce suppliers' incentives to compete vigorously. Additionally, the Scottish Government does not expect there to be any significant impact on the operational business of local authorities or health boards as a result of introducing this provision.

Competition Assessment Questions

I. Will the measure directly or indirectly limit the number or range of suppliers?

No

II. Will the measure limit the ability of suppliers to compete?

No

III. Will the measure limit suppliers' incentives to compete vigorously?

No

IV. Will the measure limit the choices and information available to consumers?

No