Scottish Welfare Fund - statutory guidance update: Fairer Scotland Duty assessment - April 2025

Stage 2 – evidence

What does the evidence suggest about existing inequalities of outcome, caused by socio-economic disadvantage, in this specific policy area?

The standard approach used by Scottish Government to identify multiple deprivation is the Scottish Index of Multiple Deprivation (SIMD), with the latest version available being 2020. The SIMD ranks data zones from the most deprived (1) to least deprived (6,876), those using data zones will usually focus on a %, such as the 20% most deprived data zones for example. There are known issues with this approach, for example data zones in rural areas can cover wider geographical areas, which make it harder to understand levels of deprivation.

The SWF method of allocating funding to the 32 local authorities that deliver funding is based on the Scottish Index of Multiple Deprivation (SIMD) number of income deprived people in the local authority.^[4] This is a methodology of grant allocation that has been agreed with the Convention of Scottish Local Authorities (CoSLA). This links to the key policy aims of the SWF which is focused on supporting qualifying individuals who are on a low income who are in a crisis or needing support to establish a settled home.

Scottish Government, via the Communities Analysis Division, publish regular reporting in relation to the SWF. The most recent annual statistics shows that awards tend to go to the applicants living in the most deprived areas in Scotland. Around one in five people in Scotland live in the 20% most deprived areas in Scotland, as defined by the Scottish Index of Multiple Deprivation (SIMD). However, in 2023-24 around half of Community Care Grants (52%) and Crisis Grants (49%) were awarded to applicants living in these areas. In comparison, around 2% of Community Care Grants and 3% of Crisis Grants were awarded to applicants from the 20% least deprived areas.^[5] The annual update tables further show that discounting those records where we are unable to match postcode, that 66% of awards for Crisis Grants went to those living in Deciles 1 – 3 (Most deprived) and only 6% to those living in Deciles 8-10 (Least deprived). Similar to Community Care Grants where the split was 69% (3 most deprived) and 4% (3 least deprived).

The amount of award received by Community Care Grant applicants didn’t correlate closely with deprivation levels during 2023-24, with those in quintile 3 receiving the largest awards, and those in quintile 5 the least. For Crisis Grants, average awards were marginally higher in the least deprived data zones. Thus there’s generally no correlation between the deprivation levels and amounts received in awards; deprived people living in a prosperous area are still likely to require similar things to those living in deprived areas, and may even be subject to higher costs for some items because of where they are living.

What does the evidence suggest about possible impacts of the policy/programme/decision, as planned, on those inequalities of outcome?

The approach taken to update the statutory guidance by the multi-stakeholder group of the Statutory Guidance Review Committee has focused on making the guidance clearer and a source for applicants to access. To assist with this particular policy aim, engagement has occurred with the Poverty Alliance ‘Get Heard Scotland’ Citizen Panel of people living on a low income on the specific action 14 – Restructure to improve accessibility and ease of use.

Panel members further gave their views on further areas for development including staff training in relation to poverty related stigma, making an application to the fund simpler and more secure, clearer information on eligibility and improved accountability processes. Their input has led to changes for a short introductory section in plain language with a focus on making the process clearer to applicants. As well as revisions to the wording, other changes have been made to the process for applicants. Further, we have agreed to work with the lived experience Panel in a phase 2 during 2025/26 focused on collaborative work to explore changes in practice related to the additional themes picked up by the Panel. Oversight of this work can occur through delivery mechanisms such as the SWF Practitioners Forum and Statutory Guidance Review Committee.

The independent review^[6] of the fund highlighted some barriers that different groups of people face that make them less likely to apply. This includes older people, the “working poor”, people who are digitally excluded and those new to the benefits system. Reasons for this include feelings of perceived stigma, confusion about the eligibility criteria, support available to apply and cost barriers linked to phone or internet access. Our proposed changes aim to address these issues and make it easier for people who are socio-economically disadvantaged to access the fund.

Some of these changes are detailed below:

(ii) Trust Based Approach and highlighting principles of dignity and respect

The standing Statutory Guidance Review Committee, noted a desire for moving to the policy aim of adopting a trust-based approach when gathering supporting information. This includes comments provided by the Ombudsman who has a critical role in the independent review of local authority decisions around the SWF. They noted that, issues that they have observed include:

• 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.

To account for this, 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.

(iii) 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 will remain at a similar rate, and will 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.^[7] 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)

(iv) New threshold tables to determine low income

Listening to the Statutory Guidance Review Committee, it was noted that a simple method for assessing low income for applicants that are not receiving a means tested benefit is required. The current guidance notes that for those not in receipt of a qualifying benefit to determine low income, discretion should be used to determine eligibility. The current guidance notes that the following principles should be used, but advises that this is not an exhaustive list.

• a roughly equivalent level of income, as compared to someone receiving one of the above income-related benefits
• an individual in receipt of (or with underlying entitlement to) other benefits, for example, disability related benefits, contributory-based benefits, retirement pension, Carer’s Allowance, tax credits, Housing Benefit or Council Tax Reduction
• an individual with exceptional outgoings or additional living costs, e.g. additional costs relating to being disabled, looking after a disabled person or having a large number of dependents • nature of employment, for example, number of hours typically worked, details of agreement (e.g. whether ‘zero-hours’) and whether paid the minimum wage.

The change in the guidance, sees Scottish Government producing low income thresholds tables with the rates for each local authority, published online with the statutory guidance annually. These rates will increase the policy intent to widen coverage for those that could meet initial eligibility under the low income criteria. The rates make certain assumptions, such as not having any under 25 rate, assuming that households take up their full local Housing Allowance rate and not applying the two child limit. The guidance still notes discretion, to ensure that those facing financial issues and on a low income are taken into account.

“If there are other financial issues the local authority thinks should be taken into account, such as experiencing homelessness, having fled from domestic abuse, or the applicant not having access to their money for some reason (for example, relating to domestic abuse), the local authority may make the judgement that an applicant on a seemingly higher income should still be considered for a grant.”

Is there evidence that suggests alternative approaches to the policy/programme/decision? For example, evidence from the UK or international evidence?

The Independent review into the SWF looked at the evidence base of other similar schemes and highlighted analogous schemes such as discretionary award schemes in Northern Ireland and Wales. These operate via centralised provision, unlike the SWF which is delivered by the 32 Scottish Local Authorities. It was found that these schemes despite being centralised, still faced issues of consistency and clarity of decision making.

Wales - Discretionary Assistance Fund (DAF): This also provides two grants like the SWF, called Emergency Assistance Payment (EAP) and Individual Assistance Payment (IAP). The criteria for eligibility for the EAP is similar to the SWF except for requiring the individual to ‘have considered all other legal and responsible lenders such as credit unions’. The IAP further differs, for example, it requires receipt of a qualifying benefit as well as for the individual to have ‘tried all other affordable sources of funding for example credit union’^[8].

Northern Ireland – Discretionary Support (DS): This offers either a grant like the SWF which doesn’t have to be paid back but also an interest free loan. This is further restrictive compared to the SWF in criteria. For example, you must be over 18 (at least 16 if you do not have parental support). Further, total income for the applicant and any partner must not be more than £26,769.60^[9].

England – does not have a national grant scheme. The original UK Social Fund that led to the creation of the national schemes in Scotland, NI and Wales, In England, these monies were transferred to councils but not ringfenced for welfare schemes. The UK Government has more recently distributed money into the Household Support Fund which is given to councils in England. However, councils will have differences in terms of eligibility criteria, how to apply and who money is given to^[10]. Looking at council websites, it is clear that there are wide differences in how this money has been used and priorities. With many councils also working with partner organisations in the delivery of support.

What gaps are there in key evidence? Is it possible to collect new evidence quickly in other areas? For example, through consultation meetings, focus groups or surveys?

There is capacity to do further analysis on particular equality groups beyond what has been reported in our equalities summaries. A key area of focus has been on encouraging local authorities to improve the quality of the data that is collected, which would help further in improved analysis. This is an important and ongoing area of work as part of the SWF action plan.

How could you involve communities of interest (including those with lived experience of poverty and disadvantage) in this process? The voices of people and communities are likely to be important for identifying potential improvements to the programme/policy/decision.

We have involved those with lived experience of poverty and the social security system in Scotland in the revisions of the statutory guidance, to ensure that it highlights principles of dignity and respect and is restructured for accessibility and ease of use.

Scottish Government officials liaised with the Poverty Alliance regarding workstream 2 of the Action Plan in Autumn 2024. As part of their ‘Get Heard Scotland campaign, two experience panel sessions were set up to receive feedback from those with lived experience of the SWF and the social security system in Scotland.

Panel members gave their views on staff training in relation to poverty related stigma, making an application to the fund simpler and more secure, clearer information on eligibility and improvement of accountability processes. This has led to a short introductory section in plain language with a focus on making the process clearer to applicants.

The panel helped to inform, refine and shape some of the proposed changes to the statutory guidance. For example, their feedback helped us to strengthen sections on accessibility and the trust based approach.

We have agreed to implement a Phase 2 with the panel post implementation of the Statutory Guidance in April 2025 to develop work on additional themes that they highlighted out with the statutory guidance as well as to ensure that implementation of the changes is in line with the policy intent.