Scottish Welfare Fund - statutory guidance update: child rights and wellbeing impact assessment - April 2025

Child Rights and Wellbeing Impact Assessment Template

1. Brief Summary

Type of proposal:

Decision of a strategic nature relating to the rights and wellbeing of children

Name the proposal, and describe its overall aims and intended purpose:

Revision of Scottish Welfare Fund Statutory Guidance – April 2025

The Scottish Government commissioned an Independent Review of the Scottish Welfare Fund (SWF) to ensure that it works as well as possible in all parts of the country and is safeguarded for the future.

The Review published at the end of March 2023^[1] and it highlighted that the SWF continues to provide an essential source of crisis support and helps people with independent living. In response to the Review, Scottish Ministers committed to deliver an Action Plan to make improvements to the SWF after a decade in place.

The SWF Action Plan published on 30 June 2023^[2]. Informed by the evidence within the Independent Review, this Action Plan was developed collaboratively with a Policy Advisory Group. Members of the Group included representatives from CoSLA, local authority delivery partners, third sector groups and public body organisations. The Group’s input ensured robust and expert oversight of the 22 actions featured within the Plan.

The SWF Action Plan sets out three ambitious workstreams to deliver policy improvements to the SWF. The improvements set out in the action plan include nine actions relating to updating the Statutory Guidance in order to make it clearer and to improve its accessibility. Actions also relate to reviewing key areas of the guidance such as income thresholds used to determine eligibility, supporting information gathering and the methodology used to calculate the cost of living award rates for Crisis Grants.

A standing Statutory Guidance Review Committee was established with a programme of work that ran between March-October 2024 to help guide and develop proposals around these actions. The Committee is made up of multiple stakeholders such as the SPSO, CoSLA, local authority representatives, Scottish Prison Service and third sector representation (Citizen Advice Scotland, CPAG). To ensure the lived experience of people living in poverty, we have also engaged with the Poverty Alliance ‘Get Heard Scotland’ Citizen Panel on specific actions relating to accessibility of the guidance and ensuring key principles around dignity and respect. The statutory guidance updates are due to be completed with a revised document published in April 2025.

Start date of proposal’s development: 14/03/2024

Start date of CRWIA process: 16/08/2024

2. With reference given to the requirements of the UNCRC (Incorporation) (Scotland) Act 2024, which aspects of the proposal are relevant to/impact upon children’s rights?

There are some elements of the proposal to update the SWF Statutory Guidance that are relevant to children’s rights. We believe that our proposals will have a positive impact in relation to Articles 3, 6, 18, 22, 23, 24, 26, 27 and 31 of the convention and an overall neutral impact for the other requirements.

The changes that are being made to the Statutory Guidance are to ensure that it is clearer, easier to understand and more accessible for everyone; including local authority decision makers and members of the public. Further, we have reviewed the rates to determine low income and the methodology to calculate Crisis Grants to ensure they account for the cost of living.

3. Please provide a summary of the evidence gathered which will be used to inform your decision-making and the content of the proposal

Evidence from:

Existing research/reports/policy expertise

1. The Scottish Government commissioned Ipsos Scotland to undertake an Independent Review of the SWF. The Review published at the end of March 2023^[3] and highlighted that the SWF continues to provide an essential source of crisis support and helps people with independent living.

2. The SWF Action Plan was published on 30 June 2023^[4]. Informed by the evidence within the Independent Review, this Action Plan was developed collaboratively with a Policy Advisory Group and provides the framework for the updates to the statutory guidance.

3. Group members consisted of representatives from Child Poverty Action Group, Citizen’s Advice Scotland, COSLA, local authorities, the Scottish Government, Scottish Prison Service, Scottish Public Services Ombudsman (SPSO) and the Trussell Trust/Independent Food Aid Network.

4. During 2023-24, £49.9 million in SWF grants were awarded by local authorities, with more than a third of these going to families with children^[5].

5. As outlined in legislation The Welfare Funds (Scotland) Regulations 2016, no fund application is made by or on behalf of a person who is aged under 16.

6. In the majority of local authorities, most applicants to the SWF are in the 30-39 age group (31%). This has been consistent since 2013^[6].

7. The second SWF Equalities Summary was published alongside the annual statistics in July 2024 and will help inform our impact assessments^[7].

8. More than half of children in minority ethnic families (53%) are living in poverty according to a 2024 Joseph Rowntree Foundation (JRF) report^[8].

9. Scottish Government poverty and inequality data published in March 2024 shows that nearly a quarter of children in Scotland were living in relative poverty after housing costs between 2020 and 2023^[9]. Of these, 38% lived in a single parent household and 43% lived in a minority ethnic household^[10].

10. While 78% of children lived in homes with high food security between 2020 and 2023, 22% lived in households with marginal, low or very low food security^[11].

11. Estimations show that 10% of children in Scotland were living in combined low income and material deprivation between 2020 and 2023^[12].

12. More than 1 in 5 people in Scotland are currently living in poverty. In Scotland 1 in 4 children are in poverty, with children continuing to be at greater risk of poverty than the rest of the population^[13].

13. The JRF highlight that 3 in 10 (31%) of children in single-parent families were in poverty, with almost 2 in 5 children in a family with a baby (37%) or in a large family (38%) living in poverty^[14].

14. 67% of children in poverty live in a household where someone is in work^[15].

15. Between 2020 and 2023, the majority of households with a single parent (95%), 3 or more children (83%) or a child under 5 (76%) received some income from social security^[16].

16. Analysis colleagues produced a summary alongside the recent quarterly statistics focusing on child poverty and how SWF funding relates to households with children since April 2019^[17].

17. This summary highlighted that around 685,000 applications were received from households with children since April 2019 making up 37% of total applications. 1.2 million children were recorded on these applications (326,000 on Community Care Grant Applications and 864,000 on Crisis Grant applications)^[18].

18. The composition of these households were 48% single child, 32% with 2 children, 14% with 3 children and 7% with 4 or more children^[19].

19. Over a third of awards, totalling £118 million, were made to households with children. With around 729,000 children living in those households^[20].

20. In this period, households with children were more likely to apply for Community Care Grants (28%) than other households (24%). 450,000 Community Care Grant applications were made since April 2019, 41% of which coming from households with children^[21].

21. There were 1.4 million Crisis Grant applications from households with children and around 36% of these were from households with children^[22].

22. The most common reason for Community Care Grant applications was ‘Families facing exceptional pressure’ (46% of applications), while for Crisis Grants this was ‘Emergency – benefit/income spent’ (45% of applications)^[23].

23. Since April 2019, around 239,000 Community Care Grant awards have been made with 95,000 (40%) of these going to households with children. 890,000 Crisis Grant awards were made with 324,000 (36%) going to households with children^[24].

24. The table below highlights the percentage of Crisis Grant applications made by age, including those aged 16/17^[25].

Consultation/feedback from stakeholders

25. A Statutory Guidance Review Committee and Practitioners’ Forum was established so that views and opinions of local authorities, third sector organisations, COSLA and SPSO were taken into account when drafting and amending the statutory guidance.

26. Scottish Government officials are liaising with the Poverty Alliance regarding workstream 2 of the Action Plan. As part of their ‘Get Heard Scotland’ campaign, two experience panel sessions have been set up to receive feedback from those with lived experience of the SWF and the social security system in Scotland. The reports from these sessions have been provided to the Scottish Government by the Poverty Alliance, and have helped inform our proposals and updates to the statutory guidance. We have also agreed to work with the Panel post-implementation over 2025/26 on additional themes that were raised in their report as well as in ensuring that implementation of the changes meets the policy intent.

27. A report published in November 2024 by the SPSO highlighted their concerns that the ‘High (most compelling)’ priority rating for awards could create inequality for families, including children already living in poverty^[26].

28. The SPSO also wrote to the Scottish Government regarding areas of the statutory guidance they have identified that could more fully support the requirements in the UNCRC. Draft sections relating to the purpose of the SWF, administration/applicant journey and the decision making process were highlighted. The Scottish Government have taken these suggestions on board and have updated the statutory guidance accordingly. Below outlines how we have responded to their feedback in the revised statutory guidance:

• SPSO suggested in their letter that we use section 2 of the guidance (Purpose of the SWF) for local authorities to consider rights, including that of children. This section has been updated to remind local authorities to consider the rights that all children have to fulfil their potential as laid out in the UNCRC.
• It was also suggested that the financial management of welfare funds section was more explicit on children’s rights and more directive around the requirement to impact assess. The reference to applicants to include family needs has been updated and notes that the move to ‘High’ (most compelling) priority rating can only occur after an impact assessment.
• There were suggestions for section 4 regarding the administration and applicant journey, with SPSO noting a number of examples where they questioned whether the guidance sufficiently recognises children’s rights. The guidance has been updated to note that decision makers must consider children’s views when making decisions about, or that concern them as laid out in the UNCRC (Incorporation) (Scotland) Act 2024.
• It has been made clearer that where children are involved, it is important to be mindful of preferences in the context of the wider needs of the family. We have referenced that award decisions for Community Care Grants should be balanced between the applicant and immediate family against the remaining budget.
• SPSO also suggested changes for section 5 of the guidance around incorporating the concept of the best interests of children. We have referenced circumstances to mean personal and dependent family circumstances. We have also further outlined that when making decisions on prioritisation this should consider the applicant in line with the immediate family’s situation.
• Suggestions were made for wording to ensure that the guidance is enabling rights based considerations in Section 6 (Qualifying Conditions/Exclusions), Section 7 (Crisis Grants) and Section 8 (Community Care Grants) which was accepted. The current wording on emergency situations included examples related to children and the impact upon a family. We also used the UNCRC definition of a child in section 7.
• It was suggested for section 9 (Review) to consider references to duties in the UNCRC Act. We have responded to this by noting that a change in circumstances also relates to family considerations as a result of a change to the wider family situation.
• SPSO requested that in the section on the Role of the Ombudsman to reference the requirement for complaints concerning children or affecting children to be compliant with SPSO’s Child Friendly Complaints handling guidance and this has been updated.
• Further, the SPSO asked for Annex C (Factors that might increase the vulnerability of an applicant) to include Children whose rights under the UNCRC might be impacted. This change was also made to the guidance.

Consultation/feedback directly from children and young people

29. The independent review which formed the basis of the action plan that made changes to the statutory guidance, held 46 one to one interviews with applicants. This included people aged 16 to 66 including 12 aged under 35. We have engaged with the Poverty Alliance ‘Get Heard Scotland’ Citizen Panel on specific actions relating to accessibility of the guidance and ensuring key principles around dignity and respect – the panel included someone in the 16-25 age range, although it is not possible to determine if they were within the 16-18 age range, further work can be carried out with young people post implementation. We can engage with organisations such as the Scottish Children and Youth Parliaments over 2025/26 during the implementation of these changes, to ensure we receive additional feedback directly from children and young people.

30. The statutory guidance will be revised on an annual basis, and a standing Statutory Guidance Review Committee has been established. The Statutory Guidance Review Committee have also agreed to roll out a Scottish Government-lead client survey in 2025/26 which could help identify trends and issues and where further work may need to be done, particularly being cognisant of issues for applicants in the 16-18 age range.

4. Further to the evidence described at ‘3’ have you identified any 'gaps' in evidence which may prevent determination of impact? If yes, please provide an explanation of how they will be addressed

The Statutory Guidance Review Committee is a standing committee which delivered a programme of work from March – October 2024. This committee was made up of representatives from local and public authorities and the third sector. It was a space to discuss any changes to the guidance and analyse the impact and potential of these changes on various groups, including children and their families. As such, we believe there are no gaps in our evidence to make these changes and will keep this in review in case any new evidence arises. Although our proposed changes will come into effect from April 2025, the statutory guidance will continue to be reviewed and looked at on an ongoing basis to make sure that it is meeting its objectives. As well as the committee that reviews this being a standing committee, we have also added an introductory section with Scottish Government contact details for suggestions on further improvements that can be made.

5. Analysis of Evidence

The above evidence and research indicates that many of Scotland’s children are growing up in poverty, in households where material deprivation is present and income is not great enough to provide high food security. It further highlights the need and importance of Crisis and Community Care Grants and for the guidance around these to be more accessible to help the families of children who apply.

It is expected that the changes that have been made will have a positive impact on children/young people. This is because making the guidance clearer for people who apply and for decision makers could lead to fairer awards and give people better understanding on if they may be eligible for a SWF grant. For example, sections have been updated to ensure local authority decision makers are taking children into account during the application process.

Further, by introducing guidance based on using the basis of the UC Essentials Guarantee to determine the cost of living award rates for Crisis grants, this can lead to a positive impact on applicants as well as those with children.

New methodology for calculating the cost of living awards

The current approach to calculate Crisis Grant award rates advises an indicative methodology which calculates based on the Income Support (IS) rate, with non-householders getting 30% of the IS rate and householders 60%, with dependent children getting the full IS rate. It was proposed that a fairer calculation that more closely reflects the average cost of food, gas and electricity for households and could be based on the Universal Credit Essentials Guarantee (UCEG). The guidance currently notes discretion that can be applied and ‘additional circumstances’ that should be taken into account when calculating awards, there is no suggestion to take away this discretion in the revised statutory guidance.

The proposal will see that Householders will get the UCEG food & non-alcoholic drinks rate and the Electricity and Gas rate. Whereas Non-Householders will get the Food & non-alcoholic drinks rate. The guidance rate for each dependent child be at the UC child rate (born pre-2017).

If UCEG was used as a new Baseline for working out Crisis Grant Awards

Below is a breakdown of the average awards of Crisis Grants by each category. The figures are taken from data as part of the annual statistics for the SWF 2023-24.^[27] Please note all figures are based on aggregated Scotland-level figures.

Below is a breakdown of average award by household and main type.

It is difficult to make a direct comparison due to Crisis Grant awards not being weekly amounts. There is also a discretionary element which will influence awards. However, if we apply some simple assumptions to the average awards information and use the current guidance Income Support rate, we can identify the following:

Single Non-Householder (Living Parental/Family Home)

Average award £58.48

(30% of the IS rate is £3.88 per day as per para 4, which means this award is for an average of 15 days.

If you look at this in comparison to the proposed rate of £39 for 7 days. You will see that the applicant will be better off by £25.09 under UCEG. £83.57 - £58.48)

Single Householder (Own Property)

Average award £66.46

(60% of the IS rate is £7.76 per day, which means that this award is for an average of 8 days.

If you look at this in comparison to the proposed rates of £66 for 7 days. You will see that the applicant will be better off by £8.96 under UCEG £75.42 - £66.46)

Couple Non-Householder (Living Parental/Family Home)

Average award £65.94

(30% of the IS rate is £6.09 per day as per para 4, which means that this award is for an average of 11 days.

If you look at this in comparison to the proposed rate of £72 for 7 days. You will see that the applicant will be better off by £47.20 under UCEG £113.14 - £65.94).

Couple Householder (Own Property)

Average award £80.57

(60% of the IS rate is £12.19 per day as per para 4, which means that this award is for an average of 6.5 days.

If you look at this in comparison to the proposed rate of £110 for 7 days. You will see that the applicant will be better off by £21.57 under UCEG £102.14 - £80.57)

Trust Based Approach and highlighting principles of dignity and respect

The standing Statutory Guidance Review Committee also noted a desire for moving to the policy aim of adopting a trust-based approach when gathering evidence. This includes feedback provided by the Ombudsman who has a critical role in the independent review of local authority decisions around the SWF.

The issues observed included the following:

• Councils requesting evidence that applicants are unable to provide because they cannot operate online banking or to get to the bank (sometimes due to disabilities, financial, geographical constraints or digital exclusion).
• Councils asking for ‘upfront evidence’ in all cases regardless of whether it is needed. Applicants have expressed frustration around this, particularly if it has raised expectations of an award.
• Councils requesting a 4-week bank statement for a crisis grant when it is only necessary to view the period around the date of the application.
• Councils declining an application due to an ‘on-balance assessment’ under existing section 4.21 by simply stating insufficient information has been provided, with no reference to the decision making process.

We have added a section to make our policy intent clearer, to ensure that those on a low income are not adversely affected by not being able to provide supporting information due to costs, highlighting:

The supporting information requested should be proportionate to the circumstances of the case. It should only be asked for if essential. If there is no reason to doubt the information that has been provided then a trust-based approach* should be applied. Applicants should not be asked for evidence which would cause them to incur an unreasonable expense (for example those in rural areas who would need to travel considerable distance to obtain information or individuals having to pay a bank for a statement) or if it is already evident that the application will not succeed even with that evidence in place.

*Trust based approach to gathering supporting information is aligned to principles of dignity, fairness and respect and can be described as an approach that is:

• Being clear and honest about why information is being requested and how it will be used.
• Being proportionate and mindful about requesting and processing personnel data.
• Robust processes that are transparent, meaningful, and respectful of real-life constraints.
• A positive opportunity to test and challenge assumptions that the applicant may have about people in positions of power

A trust based approach can also be used to develop better relations and break stereotypes and assumptions. For example, the ‘Get Heard Scotland’ Citizen Panel stated that people can be scared that if they disclose that they have no money, there can be a genuine fear that this can lead to social work involvement with their children.

6. What changes (if any) have been made to the proposal as a result of this assessment?

No changes have been made to our proposals as a result of this impact assessment, the impact on children/young people have been considered throughout the development of the guidance. We will continue to keep this under review ahead of implementation in April 2025.