Minimum Income Guarantee report: SG response

A shared vision for Scotland

There are a number of broad themes that run throughout the Expert Group’s Roadmap that we agree with. This section highlights some of these and provides a high level summary of our position. The second part of this response then focuses more on responding to the recommendations made by the Expert Group.

Tackling poverty and inequality

We agree that the rolling back on social security provisions by the UK Government over the last fifteen years needs to come to an end and everyone should have access to an adequate safety net when they need it, and that safety net must allow people to live with dignity.

We also agree that tackling poverty and inequality must be a priority for Government. Too many children continue to live in poverty in Scotland, and that is why it is so important that we work together – across Parliament and all of Scotland – to deliver the change needed. We remain the only nation in the United Kingdom with statutory targets to significantly reduce the number of children living in poverty.

The proportion of children living in relative poverty has reduced and the 2023/24 rate is now lower than it has been since 2014/15, while the proportion in absolute poverty has also fallen with the annual figure the lowest in 30 years.^[5] Our actions are making a real difference to families. Child poverty in Scotland has fallen in contrast to the rest of the UK.^[6] On average, households with children in the poorest 10% of households are estimated to be £2,600 a year better off in 2025/26 as result of Scottish Government policies. This value is projected to grow to an average of £3,700 a year by 2029/30.

In contrast the UK Government scrapped its child poverty targets in 2016^[7], and has actively pushed more children into poverty through policies such as the two-child limit and benefit cap. We have repeatedly called on the UK Government to deliver the change needed at a UK level to tackle poverty, including by abolishing harmful welfare policies such as the two-child limit, benefit cap and young parent penalty, and by addressing fundamental flaws in Universal Credit such as the five week wait. We have also made consistent representation to the UK Government’s Child Poverty Taskforce on changes needed beyond social security, including delivery of a social tariff for fuel costs, enhancing parental leave, and committing to improving the UK child maintenance system. Scottish Government modelling^[8], published in March 2025, makes clear that if the UK Government had chosen to act decisively on child poverty, they could have helped to take an estimated 100,000 children out of poverty this year, closing the gap considerably to our 2030 targets.

Irrespective of the action of the UK Government, we are absolutely committed to meeting the 2030 child poverty targets and will continue to do everything within our powers and budget to deliver the change needed in the face of challenging economic conditions. We are now in the process of consulting with a wide range of stakeholders as we develop the next delivery plan, building on the considerable evidence and action taken to date, to inform our collective approach. Our next Tackling Child Poverty Delivery Plan will be published by the end of March 2026 and will set out set out action to drive further progress toward the 2030 targets.

Dignity, fairness and respect

We agree that everyone in Scotland should be treated with dignity, fairness and respect. In line with the Scottish Fiscal Commission forecasts^[9], we are investing around £6.9 billion in Social Security benefits and other payments in 2025/26. This investment will help keep children out of poverty, support disabled people and their carers, and help pensioners with winter heating payments. This is an increase of over £800 million compared to 2024/25.

The current UK Government approach is completely at odds with the approach we have taken in Scotland.

Rightly, the UK Government listened to the overwhelming criticism of proposals to make the Personal Independence Payment entitlement criteria significantly more stringent and halted those plans. However, disabled people remain concerned that these cuts may have been delayed, rather than abandoned. The Timms Review of Personal Independence Payment is due to report in autumn 2026 and provides an opportunity for the UK Government to genuinely engage with disabled people on its future. What is clear is that the UK Government’s approach is about reducing benefit spend. The most recent Universal Credit Act^[10], which significantly reduces the financial support available to sick and disabled people who are unable to work, passed despite the lack of detailed impact assessments.

The UK Government’s chaotic approach to social security reform means there is continuing uncertainty surrounding our budgetary position in the future. Any reforms emerging from the Timm’s review of Personal Independence Payment, or wider changes aimed at reducing the UK benefit bill, could reduce the money we get from the UK Government in years to come.

While the UK Government seeks to make cuts to the vital support disabled people rely on, we want to be clear that we will not cut Adult Disability Payment. We want all disabled people to know that this Government stands with them in opposing any reduction in spending on disability benefits. We call on the UK Government to follow the Scottish Government’s lead by protecting and enhancing the social security safety net rather than dismantling it and stigmatising people who need support. Any approach which seeks to take money from those at greatest risk of poverty in our society will only serve to push more people into poverty and deeper hardship – inhibiting our efforts to eradicate child poverty and undermining the work of the UK Government’s own Child Poverty Taskforce.

The UK Government’s decision last year to cut the winter fuel payment was a betrayal of millions of pensioners, and their subsequent U-turn is welcome. However, it is disappointing that, yet again, Scottish Ministers received no prior consultation on the UK Government’s decision. No pensioner in Scotland will receive less than they would under the new UK scheme. From this winter (2025/26) the Scottish Government’s Pension Age Winter Heating Payment will provide support with heating costs to those pensioners in Scotland with a taxable income below £35,000.

Scotland’s winter heating support provides higher, more reliable support than the UK Government’s schemes, ensuring broader and more consistent help with heating costs. From winter 2025, the Scottish Government will provide pensioners with payments of either £203.40 or £305.10 per household through the Pension Age Winter Heating Payment, a generally higher rate of payment than the £200 or £300 provided by the UK Government. Unlike the UK Governments Cold Weather Payment, Scotland’s Winter Heating Payment is guaranteed annually for eligible households, regardless of temperature. In addition, the Child Winter Heating Payment, unique to Scotland, supports households with severely disabled children and young people with winter heating costs.

Fair work and a prepared workforce

We agree that work should be fair and that skills need to be futureproofed. Control over employment and industrial relations legislation is currently reserved to the UK Government. While this remains the case, we will continue to use our Fair Work policy to drive up labour market standards for workers across the Scottish labour market.

Fair Work is a model for innovation and success, with many employers in Scotland already implementing fair work practices. Fair Work supports stronger productivity, economic growth and greater wellbeing.

Since devolution of employment support powers, we have been clear on our desire to shape an employability system for Scotland that delivers better outcomes for people who experience barriers to accessing the labour market.

We have been clear that the employability system must centre on the people that access it. This requires support to be tailored to an individual’s circumstances, and a recognition that progress towards employment may not be linear. We want employability services to be seen as an opportunity by those accessing them, which is why participation is entirely voluntary.

Universal Credit reform

We agree that the harmful and discriminatory policies embedded in Universal Credit need to be addressed. Our efforts to tackle child poverty are currently being undermined by the social security policies of the UK Government, not least the Universal Credit two-child limit. The Expert Group’s Roadmap outlines the importance of mitigating this policy.

We have consistently called on the UK Government to end the two-child limit, but it was clear that we could no longer wait for the UK Government to act. That is why we are taking decisive action as early as possible to mitigate the two-child limit for Universal Credit in Scotland, as far as our devolved powers allow. Subject to Parliamentary approval of the necessary legislation, the new Two Child Limit Payment will open for applications on 2^nd March 2026, with payments beginning as soon as possible thereafter.

The UK Government has an opportunity to do the right thing through their commitment to review Universal Credit and through the work of their Child Poverty Taskforce and forthcoming UK Child Poverty Strategy. The scope and remit of the review of Universal Credit remains unclear, but it is the view of the Scottish Government that it must look to improve the overall adequacy of Universal Credit, by implementing an Essentials Guarantee and removing the two-child limit and benefit cap.

It is deeply disappointing that the UK Government’s most recent round of cuts introduced in the Universal Credit Act 2025 will having damaging financial impacts on those living with long-term health conditions. Our analysis estimates the reduced rate of the Universal Credit health element for new applicants will result in around 77,000 families in Scotland losing around £3,000 per year by 2029/30.

These changes are not about the health and wellbeing of the families trying to manage the additional cost of ill health and being disabled on top of everyday essentials. These changes are a political choice by the UK Government and will cut total Universal Credit spending by around £2 billion per year in 2029/30.^[11]

Accessible and affordable public services

We agree that public services should be accessible, affordable, and equitable, to increase access to the labour market and participation in society. Ensuring that families can access the support they need, when and where they need it, is essential to our efforts to tackle child poverty. This requires our public services to be integrated, equipped and empowered to support families, to proactively offer the help families need, and to work across organisational boundaries to make sure support is easy to access.

We have recently expanded our Fairer Futures Partnerships, working with more local authorities and their partners to test and improve how they deliver the services required to provide effective whole family support and tackle child poverty.

In support of our Programme for Government commitment to expand we have made over £4 million available to our 16 local authority partners this financial year. This is enabling more local areas to test and improve delivery of joined-up services, maximise incomes and support people towards education and into sustained employment.

We will also undertake formal evaluation to capture learning from the programme, allowing us to share good practice and contribute to a template for future service reform.

By scaling what we know is working, we can deliver transformative change across all of Scotland and bring Whole Family Support to life across all communities in Scotland.

Our 2025/26 Programme for Government^[12] set out some other examples of how we are continuing to deliver for the people of Scotland in the final year of this Parliament. For example, our cost-of-living guarantee includes ongoing free prescriptions, eye exams, bus travel for 2.3 million people, free tuition for students and more than £6,000 in early learning and childcare support for each eligible child.

We have also increased investment to over £16 million for free income maximisation and debt advice, including investing an extra £2.2 million to support the expansion of tailored advice on council tax debt – building on a pilot that has helped over 1,600 people with arrears.

Effective and integrated systems

We agree that systems should be effective and work for the people of Scotland. In Scotland, we have deliberately built a radically different social security system to both tackle the worst impacts of UK Government cuts and to tackle inequality and child poverty, as well as providing vital assistance to enable older people to heat their homes and to help disabled people live independent lives.

Our decision to invest in Scotland’s social security safety net to target help at those who need it most reflects the values that are fundamental to who we are as a nation. We are investing £649 million in 2025/26 in our package of benefits and payments only available in Scotland. This is significantly increasing financial support through our five family payments, including our Scottish Child Payment which has put over £1 billion in the pockets of low-income families since 2021.

There are clear and inextricable links between health inequalities and poverty – with those from our most deprived communities living shorter lives, and in poorer health, than those from the least deprived communities. In June 2025 we published an evidence review^[13] which sets out clearly the connections between poverty and health – which will help us to identify areas where improvements can be made so we can make a difference to the lives of those most in need.