Implementation of the Scotland Act 2016: second report

Scottish Government sixth annual report on Part 3 (Financial Provisions) of the Scotland Act 2012 - second report on implementation of the Scotland Act 2016.

Chapter 7 - Social Security and Employability

Scotland Act 2016

101. 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 ultimately worth around £3.3 billion of spending each year in Scotland.

102. 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 payment will be paramount, to ensure nobody falls through the gaps.

103. A Joint Ministerial Working Group on Welfare ( JMWGW) and Joint Senior Officials Group was established to facilitate joint working between the Scottish Government and DWP to oversee the safe and secure transition of social security. Since the Scotland Act 2016 received Royal Assent there have been five JMWGW meetings. Minutes agreed from the meeting are made publicly available to both Parliaments by the UK and Scottish Governments respectively.

104. 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 [16] 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.

105. The remaining sections, in 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.

106. 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 (Universal Credit Scottish Choices ( UC)), information sharing and appraising options for implementing the Scottish Government's commitment to increase the rate of Carer's Allowance. From 4 October 2017, the first two Universal Credit Choices (direct payment of the UC housing element to landlords, and twice monthly UC payments) have been successfully introduced. The Scottish government will also introduce, as part of Wave 1, a Carer's Allowance Supplement to be delivered from Summer 2018, with other Tranche 1 benefits, Best Start Grant and Funeral Expense Assistance delivered by Summer 2019.

Social Security Bill

107. 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.

108. Following a period of formal consultation and an extensive programme of over 120 stakeholder events, the Social Security (Scotland) Bill was introduced to the Scottish Parliament on 20 June 2017. The Social Security Committee was appointed as Lead Committee to scrutinise the Bill and they undertook their Stage 1 evidence gathering between July and December 2017. A call for written evidence was issued in July and August 2017, to which they received 119 written submissions. [17] The Committee heard oral evidence between 7 September and 2 November 2017 from 32 people, including individuals with lived experience, organisations representing different groups, academic experts and professional bodies. [18] The Minister for Social Security gave oral evidence at its meeting on 2 November 2017. [19]

109. The draft Bill was also considered by both the Delegated Powers and Law Reform Committee ( DPLRC) and Finance and Constitution Committee ( FCC). The DPLRC wrote to the Scottish Government to raise questions in relation to a number of the delegated powers in the Bill. The Committee's questions, as well as the response received from the Scottish Government to them, were published as part of the DPLRC report. The Minister for Social Security gave evidence to the DPLRC on 3 October 2017 [20] , and the DPLRC published its report on the Bill on 31 October 2017 [21] (to which the Scottish Government responded directly on 16 January 2018).

110. The FCC issued a call for views on 18 August 2017 and received 8 responses. [22] Scottish Government officials gave oral evidence on 13 September 2017 [23] , which was followed up with supplementary written evidence on 26 September 2017. Subsequently, the FCC reported to the Social Security Committee in its letter on 4 October 2017, which included a copy of the supplementary evidence. [24]

111. The Social Security Committee published its Stage 1 report on 11 December 2017 [25] , and the Scottish Government published its response to the report on 15 December 2017. [26] While the Committee was unanimous in agreeing the general principles, its report contains 39 recommendations and/or conclusions, some of which were agreed by majority rather than unanimous decision, and most of which focus on areas where the Committee is seeking for changes to be made. After a plenary debate in the main chamber of the Parliament on Tuesday 19 December 2017, MSPs voted unanimously to support the general principles of the Bill (although some Members indicated there were areas they planned to return to at Stage 2).

112. The Bill is currently undergoing Stage 2 of the Parliamentary scrutiny process, where it may be amended by any MSP (including by the Scottish Government via Ministers). These amendments are being considered by the Social Security Committee as they make a line-by-line examination of the Bill as laid. Stage 2 is expected to last several weeks, and will be followed by Stage 3. More detailed information on the general Parliamentary process for Bills can be found on the Scottish Parliament website. [27]

113. The Scottish Government amendments respond, not only to the various reports produced by Parliament, but also to many of the points made by stakeholders throughout Stage 1. As part of the co-design ethos of the new Scottish social security system, the Minister for Social Security and her officials continued to meet with stakeholders during that phase of the Parliamentary process, and intends to do so again in advance of Stage 3.

Scottish Social Security Agency.

114. 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.

115. The Scottish Government undertook 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. In doing so the Scottish Government took a co-design approach to this work by involving a number of partners to determine and assess the options appraisal criteria.

116. Following this appraisal the decision was made that the new agency will have central locations as well as providing a local presence across Scotland that provides accessible face-to-face pre-claims advice and support co-located, where possible, in places people already visit. This option will best deliver on our key objectives of consistency of provision across Scotland; person centred, rights based service; a strong local presence with a human face to improve accessibility and support; and the safe and secure transition to the 1.4 million people who rely on this support.

117. On 18 September further detail on the operating model was announced with the First Minister advising that the social security agency will be headquartered in Dundee, with a second site of equal size in Glasgow. This decision makes operational and economic sense and is supported by robust analytical evidence. The results of which were published on 19 September. [28]

118. As part of our wider measures to tackle poverty, we have 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 liability. In addition we have established the Scottish Welfare Fund which is a vital lifeline for people across Scotland providing £38 million per annum to councils to support people in crisis and low income households. Responsibility for Discretionary Housing Payments was passed to the Scottish Government from April 2017, and is administered through Local Authorities. The 2018/19 draft budget will allow for a spend of £60.9 million.

119. The Scottish Budget announced on 14 December 2017 indicated that, as in 2017/18, spend in 2018-19 on the developing social security programme will continue to be funded from the centrally held budget relating to Scotland Act 2016 non-tax implementation (£75m). Implementing a new social security system for Scotland is a highly complex exercise and we are continuing to develop detailed costed plans. Programme management arrangements are in place including financial planning, monitoring and reporting.


120. 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 have provided 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 has been completed with the Minister announcing the award of contracts on the 4th October 2017. Scottish Ministers are committed to supporting the delivery of devolved employability services, with additional investment of up to £20 million in 2017-18 and an additional £20 million 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, including budgeting and monitoring costs.

Welfare Foods

121. The Scottish Government will continue to work closely with the Department of Health and Social Care on the commencement of section 27 of the Act, towards anticipated commencement in 2019.


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