Chamber and committees

In 2025, we extended the legal obligation to uprate in line with inflation so that it applies to all the benefits that are delivered under the Social Security (Scotland) Act 2018. It is our intention that the best start foods payment will be brought under the 2018 act in the future, so that the statutory uprating duty will apply automatically. However, in the interim period, we have made the public commitment to continue to increase the best start foods payment by inflation, so that will happen in practice. In the future, we will look to change the footing of the best start foods payment to allow that to happen by statute.

Thank you very much, convener, and good morning. I welcome the opportunity to speak to the draft uprating regulations and order.

The Scottish Government is clear about the importance of protecting the real value of social security assistance, particularly at a time when household costs remain under pressure. Uprating payments in line with inflation is essential to ensure that support continues to make a meaningful difference in people’s lives.

The instruments increase all social security payments by 3.8 per cent, in line with the 12 months to September 2025 consumer prices index rate, which is a leading measure of inflation. The exception is the industrial death benefit, which will increase by 4.8 per cent, which is in alignment with the Department for Work and Pensions and reflects growth in earnings.

I take the opportunity to confirm that, following its introduction during 2027-28, the new Scottish child payment premium rate for children under the age of one, which was announced as part of the Scottish budget, will be included in the regulations that we introduce annually to uprate benefits in line with inflation.

In addition to increasing the payment rates, the regulations make a number of other changes, such as increasing the earnings limit from £196 to £204 for both carer support payments and carers allowance. This will ensure that carers who are in paid work can continue to access support as wages rise.

Other minor changes are intended to update legislation so that it accurately reflects the policy intention or to correct drafting errors. These include amending the Carer’s Assistance (Carer Support Payment) (Scotland) Regulations 2023 to clarify the effective date of the end of a carer support award when a client has died and addressing a typographical error in which the year 2026 was unintentionally omitted from a provision.

The regulations also amend the Winter Heating Assistance (Pension Age) (Scotland) Regulations 2024 to clarify that each member of a couple should be treated as though they were entitled to the qualifying benefit, to ensure that the original regulations operate as intended for couples.

The regulations contain saving and transitional provisions so that the previous values of assistance are still payable in certain circumstances. This includes provisions addressing an issue related to the transitional rate of adult disability in 2025-26, where it was not uprated in the legislation, although it is important to note that people were still paid the correct uprated amount.

Subject to parliamentary approval, the increased rates and additional changes will come into effect from April 2026.

Yes. We have looked at the issue more than once since we began the journey in relation to social security. I am certainly content with the position that we have at the moment, and it is important that we look to question the policy position if there is a substantive change of the sort that I have mentioned.

As the committee is aware, the Government uses the Scottish Fiscal Commission’s independent forecasts for the budget and medium-term financial planning, which include the latest economic and inflation forecasts. Any increase in future years’ inflation compared to the SFC’s forecasts will be managed through future budget allocations. As the committee is aware, we need to take account of those things.

The Government has always produced a balanced budget, looking to fiscal sustainability and ensuring that we continue to prioritise social security as part of that. However, the forecasts that are provided by the Scottish Fiscal Commission will allow us to ensure that we are looking at that in the medium-term financial planning window as well.

I note what the Scottish Commission on Social Security said in its response, but I would say that the work that has been undertaken around that, which has been discussed extensively at committee previously, has been very thorough. We therefore believe that future analysis should be carried out if there have been substantive changes in the advice on inflationary measures, whether that advice comes from the Office for Statistics Regulation or the Office for National Statistics. Those are the types of substantive changes that would suggest that the Scottish Government should review its current policy. That is the approach that we intend to take in the future.

Public service reform and the savings that are set out in the spending review are important. The savings that are set across the spending review period apply to the whole social justice portfolio, not just to Social Security Scotland. However, given the size of Social Security Scotland, we expect it to play a major role in making those savings.

It is important that we continue to look at how social security will evolve. We are looking at a number of areas in which that will mean a better service for clients and a more efficient way of running government. For example—it is probably easiest if I give examples of what we have done in the past—automation of payments means that people do not have to apply for best start grants and best start foods separately, because they do that as part of getting their Scottish child payment.

The savings fit in with our ability to look at social security in the round now that the benefits have been devolved and to make sure that we continue to challenge ourselves to improve the system for the benefit of clients and by running a more efficient and effective system. I am sure that ministers will—I certainly will—continue to challenge themselves to see how much further we can go than what has been set out, because there is a dual benefit to making such changes. We have been set a reasonable and proportionate savings challenge and it is important that we address that because, through that, we will deliver a better service for clients at the same time.

I will give some examples of how it has happened in the past. Some of it will be obvious and demonstrable, such as a change to automation of payments, for example, rather than separate applications. Much of it will be to do with changing Social Security Scotland processes to ensure that cases are dealt with automatically rather than requiring manual input at some point. It is important that we look at all the changes that are being made.

Ministers and officials within Government, and particularly within the agency now that the programme is coming to an end, have complete oversight of that. We are alive to the changes and the releases that are being put into the social security system that will drive those changes. Through the Government’s investment in major releases that impact the running of the live social security system, we will see some of the changes coming through.

How we use data sharing is really important. An example that demonstrates the potential in that regard is how Scottish child payment information can be used for free school meals. That is an example of how information that the national Government holds, through Social Security Scotland, can assist a local authority in ensuring that those who are eligible for free school meals get those free school meals. It is an example of how we can tie in our work on tackling child poverty with our data-sharing work to ensure a more efficient and effective system and to help those who are eligible for benefits to get what they are entitled to.

That is an area that the committee discussed in great detail when it considered the Social Security (Amendment) (Scotland) Bill. From memory, the committee was keen for us to consult before implementing such regulations, because it had a degree of concern about how the audit function would work. I committed to undertaking a statutory consultation before the provisions in the Social Security (Amendment) (Scotland) Act 2020 are implemented. That process is well advanced. I am keen for the consultation to begin before the Scottish Parliament elections, to allow stakeholders to have their say so that we do not lose time in the purdah period and the election period.

The findings of the consultation will determine the timetable for the secondary legislation. Obviously, that will be for the next Administration to opine on, but, for my part, I am aiming for—and we are on track for—the statutory consultation to be launched before the purdah period begins, to allow that work to continue.

It is a challenge. That is one of the reasons why, rather than the Scottish Government mitigating the effects of the benefit cap, it would be more effective and efficient for everybody for the benefit cap to be scrapped at source. That way, we would not be in the situation that we are in at the moment.

As I said, we are putting more money into mitigating the benefit cap—I think that the figure is about £8 million. The challenge is to ensure that everybody who should benefit from that mitigation does so. We need to work closely with local authorities as we go through that process. Clearly, discretionary housing payments are made through local authorities, and we will continue to work closely with them on that.

We announced in the spending review that, in early 2026, with a number of partners across the public sector, we will pilot an approach to tracking preventative spend across the Scottish budget. By the summer of 2026, the learning from that will provide the basis for a comprehensive understanding of preventative spend throughout the Scottish budget, with a view to integrating that approach into the on-going annual reporting cycle. The preventative spend pilot is still in development, and I am sure that the Cabinet Secretary for Finance will keep Parliament updated as that work progresses.