Scottish Government reports on welfare reform impacts

The Scottish Government's 2018 Annual Report on Welfare Reform has estimated that UK Government welfare cuts mean that £3.7 billion less is going to be on social security in Scotland by 2020/21. Additionally, the report find that reduced benefit spending is a key driver of increased poverty rates for lone parent families and families with three or more children. 

Benefits freeze

The report is particularly critical of the UK Government's policy of freezing benefits at their 2015 levels, pointing out that the actual value of benefits has been "eroded" by this policy, as inflation reached 3% in 2017 and is forecast to raise by a further 2% in 2018 and 2019. The benefits freeze has also made it increasingly difficult for people to find affordable rented housing in the private sector as market rents, even those at the lowest end, are becoming increasingly out of reach for those people whose benefit is calculated under Local Housing Allowance rules. 

Child poverty rates

Scotland is unique in the UK in having statutory targets for the reduction of child poverty. The targets state that by 2030, of children living in Scottish households:

• less than 10% should be living in relative poverty (how many families are on low incomes compared with middle income households)
• less than 5% should be living in absolute poverty (how many low income families are not seeing their living standards improving over time)
• less than 5% should be living with combined low income and material deprivation (how many lower income families cannot afford basic necessities)
• less than 5% should be living in persistent poverty (how many families live on low incomes three years out of four)

The report's authors stress that ongoing welfare reforms will make it more difficult for Scotland to meet these targets and states that the share of children living in relative poverty after housing costs is likely to increase by 8% in Scotland by 2021 as a result of benefit and tax changes. 

Mitigation

As in Northern Ireland, Scotland has set up a number of measures to mitigate the worst impacts of welfare reform and estimates that it will spend over £125 million on such policies in 2018/19. However, the report concludes that the substantial welfare changes will continue to impact on the most vulnerable, despite these measures. 

Scotland's Social Security Secretary, Shirley-Anne Sommerville commented: "“This detailed report paints a stark picture of the reality of life for many people in Scotland. It represents damning evidence against the DWP’s current programme of welfare cuts which are only set to get worse...Esther McVey cannot ignore this report. That is why I am sending her a copy and urging her to immediately end the freeze on benefits. I will also be sending a copy to the UN Special Rapporteur on extreme poverty and human rights in advance of his visit to the UK later this year."