Bill seeking to lessen impact of UK welfare reform in Scotland moves forward

16/05/2012

A Bill proposed by the Scottish Government to seek, as far as is possible, to limit the likely widespread impact of UK Welfare Reform Act on the poor and vulnerable in Scotland was recommended for approval in principle today.

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The Welfare Reform Committee recommended to the Scottish Parliament that the Welfare Reform (Further Provision) (Scotland) Bill should progress through to the next stage.

Within the report, the Committee has expressed “grave concerns” about the impact the UK Act will have in Scottish society, which mirrors the sentiment in all of the evidence given to the Committee.

Commenting as the Stage 1 report was published, Convener Michael McMahon MSP said:

‘We heard from witnesses about the bleak picture for those on welfare and the scale of personal impact that is likely to follow the UK reforms. We have grave concerns for the future of Scotland’s most vulnerable people. This comes at a time when the Scottish welfare budget is being cut by £2.5 billion. Seeking to limit even some of the negative impacts of reforms is therefore no mean feat.

“Our Committee has provided a forum for the concerns of individuals, service providers and campaign groups, to help to ensure their voice can be heard. It is important in the coming months and years that we are able to use this evidence to address those concerns by influencing forthcoming legislation and its implementation in Scotland.”

Some of the emerging themes in evidence have been that:

  • changes to the benefits system will remove lifeline benefits from large numbers of vulnerable people;
  • the means of applying for new benefits is complex – with more online applications required and with stressful capacity assessments finding those with long term disabilities as able to work;
  • 330.000 people are caught within an appeals system that overturns two thirds of these assessment results and time taken by medical professionals on the appeals process is impacting on frontline NHS services;
  • there will be major impacts on the independence of disabled people, and on child poverty and homelessness levels;
  • the likelihood of individuals and families getting into serious debt, including rent arrears, due to the new arrangements for allocating income support and benefit is increased;
  • the Department of Work and Pensions, which proposed these reforms, has done limited work to assess the impacts on different groups in society and therefore working out where to target support is not possible.

Within its report, the Committee has commented on the contents of the bill, the issues that the Scottish Government should take into account when developing regulations stemming from this bill (Subordinate Legislation), and issues that the Committee intends to pursue once the Bill is passed that have been highlighted to it.

Deputy Convener Jamie Hepburn MSP added:

“Stakeholders are unanimous that this Bill should be passed swiftly, so that the secondary legislation stemming from it can be in place well before the start of the new welfare system in April 2013. This is to ensure that individuals and families continue to receive what can be lifeline benefits.

“That said, we all appreciate the necessary time constraints that the Scottish Government faces here. Understandably, within these parameters, stakeholders want the fullest involvement in the development of regulations and the opportunity for comment.”

The Committee’s report includes a suite of recommendations aimed at supporting the Scottish Government, local authorities and the third sector in supporting those in need, including ensuring the limited number of benefits that can be controlled at a Scottish level continue to be delivered to those in need. The report therefore covers:

  • Universal Credit including housing benefits
  • Personal Independence Payments
  • Passported benefits

Universal credit including housing benefits

The Committee supports the powers in regard to Universal Credit that the Scottish Government is proposing.

The Committee believes there is a responsibility on the Department of Work and Pensions to provide full and proper advice services to help claimants make the adjustments to the new benefits systems. However, it would also be appropriate for the Scottish Government to examine whether it requires to support bodies whom claimants are likely to turn to for independent advice and assistance.

The Committee has concerns about, amongst other things, the impact in Scotland of changes proposed to housing benefit, which will be subsumed in the new Universal Credit in the UK legislation. It anticipates significant problems for local authorities and housing associations both in transition and through reduced income and increased costs of borrowing. The Committee plans to look at this further as part of its on-going scrutiny.

Personal Independence Payments

The Committee supports the powers in regard to personal independence payments that the Scottish Government is proposing.

The Committee believes that it is necessary to undertake extensive modelling to understand the impacts of welfare reform in Scotland and the policy responses to it, e.g. in establishing criteria for passported benefits. The Committee considers that it is primarily the responsibility of the DWP to undertake this work and provide the Scottish Government with full access to this information. The Committee supports the work that the Scottish Government is undertaking and urges it to make the results public. 

Regulations

Stakeholders appreciate the necessary time constraints that the Scottish Government faces in developing regulations stemming from the Bill and want to ensure that there is no delay in the process of enacting the legislation as a whole, including the regulations. Understandably, within these time constraints, stakeholders want the fullest involvement in the development of regulations and the opportunity for comment.

Passported benefits

Passported benefits are additional benefits that a person is eligible for where they already receive a ‘core’ benefit. There is a huge range of these passported benefits, including free schools meals, concessionary travel, blue badge permits, free NHS dental treatment, optical vouchers, educational maintenance allowances, legal aid and individual learning accounts.

The Committee believes that the main aim of the Scottish Government in implementing the new welfare system should be in so far as is possible to maintain eligibility to passported benefits as they are at present.

The Scottish Government can ensure that continuity in eligibility for passported benefits is achieved for the transitional phase by making those who were eligible under the old system eligible under the new interim arrangements.

Background

To note –  Alex Johnstone MSP dissents from the grave concerns statement.

The Bill was introduced on 22 March 2012. The newly established Welfare Reform Committee was allocated the Bill by the Parliamentary Bureau for Stage 1 scrutiny. Stage 1 usually involves analysis of the general principles of the Bill and an assessment of the alternative approaches to those policies proposed in a bill. Bills are generally introduced by the Scottish Government and are based on Government policy. 

Stage 1 recommendations focus on how the Government could strengthen the proposals in a bill, or a committee recommends that the bill should not be taken forward because it does not agree with the policy upon which a bill is based. 

The committee report is then considered by Parliament and informs the Parliament’s decision on whether or not to vote in favour of the general principles of the bill. The current Parliamentary schedules states that the Stage 1 report for this bill will have taken place before 25 May 2012.

Should Parliament agree to the general principles a bill then it moves to the amendment stages, with Stage 2 taking place in committee and Stage 3 being the consideration of proposed amendments by Parliament as a whole. 

The Welfare Reform Committee’s scrutiny of this Bill, and therefore the contents of this report, is distinct from the norm in a number of ways:

  • This Committee already has a very clear indication from the Scottish Parliament that it approves of this Bill, as the Parliament has already agreed a legislative consent memorandum that requires it.
  • This Bill is not based on Scottish Government policy, rather it is being introduced by the Scottish Government to enact (and to seek to mitigate, as far as is possible, the impacts of) the UK Government’s Welfare Reform Act 2012.
  • The Bill has very little detail in it, as it is a short enabling Bill and therefore there are few policy intentions on the face of the Bill to be scrutinised.
  • Stakeholders are unanimous that this Bill should be passed swiftly, so that the secondary legislation stemming from it can be in place well before the start of the new welfare system in April 2013, ensuring that individuals and families continue to receive what can be lifeline benefits.
  • A large amount of the evidence received by the Committee has related to the UK Government’s actions thus far in welfare reform, as opposed to the contents of this Scottish Government bill.
  • There is virtually no information on the financial implications of the Bill beyond the current costs of passported benefits and the knowledge that the UK Government is reducing the Scottish budgetary allocation on the basis of its welfare reform by £2.5 billion.