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MPs to probe welfare in Scotland

14 October 2020

The Scottish Affairs Committee today launches its inquiry into the impact of welfare reform in Scotland.

Welfare claimants in Scotland currently receive £19.5 billion in welfare payments[1], which have undergone cuts and a series of reforms in recent years. These reforms include Universal Credit and the transfer of control over parts of the welfare system from Westminster to Holyrood.

Demands on the welfare system have been exacerbated this year by the coronavirus pandemic. Since the start of the crisis the number of people claiming Universal Credit in Scotland has almost doubled, increasing from 264,177 in March to 473,973 in August. Meanwhile, the pandemic has delayed the rollout of the Scottish Government’s replacement for Personal Independence Payments and the introduction of Child Disability Payment following a transfer of powers to Holyrood.

The inquiry will examine the effect of these policies on the lives of claimants and poverty and inequality levels more broadly in Scotland. It will assess the effectiveness of Scottish Choices which provide a unique degree of flexibility for those on Universal Credit in Scotland. It will also explore the consequences of Universal Credit policies specific to Scotland, including; inaccessibility in rural areas, and the issue of debt spiralling for those taking advanced payments.

Chair's comments

Pete Wishart, Chair of the Scottish Affairs Committee said:

“Welfare provision is a critical lifeline when people fall on hard times, whether it’s by topping up low wages, helping to keep a roof over the heads of you and your family, or to go toward childcare while you earn a living.

And times have got harder. Coronavirus has had a devastating impact on Scotland; thousands have lost their jobs while healthcare professionals have reported a significant increase in mental health consultations. With many more now needing help, the crisis would have made any pre-existing problems with welfare that much more acute.

However, Universal Credit continues to face problems that are driving people further into poverty. We’ve been concerned by reports of people in remote locations feeling locked out of the system by its digital-first application process.

The introduction of Scottish Choices in welfare payments have provided a degree of flexibility in the Universal Credit system, but no assessment of its effectiveness has been made.

Our inquiry will make this assessment of Scottish Choices and will probe the impact of welfare policies on the lives of those affected and how it can help improve the lives of people in Scotland.

Scotland is undergoing the largest transfer of welfare powers since devolution began in 1999. This transition must be scrutinised to ensure that the unique circumstances in Scotland are addressed, and that these powers are exercised to benefit those most in need of help.”

Terms of reference

Based on these issues, this inquiry will consider the following questions: 

  • What impact has UK welfare reform had on poverty & inequality in Scotland? 
  • How well is Universal Credit working in Scotland? Are there issues with Universal Credit that are specific to Scotland compared to the rest of the UK?
  • What has been the effect of the introduction of full Universal Credit services in Scotland for claimants who previously received legacy benefits?
  • Do people in Scotland benefit from the flexibility of having Universal Credit paid at a different frequency or to their landlord directly via the Scottish Choices system?
  • How effective has cooperation been between the UK & Scottish Governments on the devolution of new welfare powers to Scotland? 
  • Why have there been delays in the administration of benefits, which has been devolved to Scotland via the Scotland Act of 2016? What have been the impacts of delays in the devolution of benefits administration?
  • What changes might be necessary to help manage the transfer of claimants and data from the Department for Work & Pensions to Social Security Scotland?  
  • What impact could diverging welfare policies in Scotland and the rest on the UK have on welfare claimants in Scotland?
  • What are the likely long-term impacts of coronavirus on the devolution of welfare?

Further information

Image: Unsplash

[1] Scottish Government, 2019 Annual Report on Welfare Reform, 2019