THE UK Government is reportedly set to introduce a sweeping range of social security reforms that could see the welfare budget slashed by billions.
Work and Pensions Secretary Liz Kendall is expected to set out plans for benefits reform on Tuesday in an apparent effort to get more people back to work and slash the benefits bill described by ministers as “unsustainable”.
Reports that this could include cuts to the personal independence payment (PIP), the main disability benefit, have sparked an outcry from Labour MPs, opposition parties and the charity sector.
But what does it actually mean for Scotland?
Personal Independence Payments
The UK Government wants to make it harder for people to claim Personal Independence Payments (PIP), which is not linked to work.
PIP helps with extra living costs for people with disabilities and comes in two parts: a daily living part, for people who struggle with everyday tasks; and a mobility part, for people who have difficulty getting around.
People in Scotland currently claiming PIP are being transferred to the Scottish Government’s Adult Disability Payment, with the transition set to be complete this spring.
But that isn't to say changes made by the UK Government won't impact Scots.
The Fraser of Allander Institute, for example, notes that a £1bn reduction in PIP spending through reduced caseload would worsen the Scottish Budget by around £115m.
IPPR Scotland echoed similar concerns. Casey Smith, a researcher at the think tank, told the Scotsman this was due to the higher caseload of those receiving disability and incapacity benefits in Scotland.
“There is a significant risk that proposed changes to the UK Government’s spending plans could end up reducing the Scottish Budget,” he said.
“The expected £5bn annual reduction in welfare spending on disability benefits will prove particularly difficult for Scotland. A real-terms freeze in the value of PIP will mean reduced support for people with disabilities.”
Smith added: “Any freeze in PIP in the rest of the UK will lead to reduction in block grant for Scotland. Therefore, if the Scottish Government wishes to continue to provide ADP recipients with inflation proofed income, it will need to find the resources from elsewhere in the Scottish Budget or by raising devolved taxes."
Universal Credit
There are also changes to Universal Credit, which is paid both to people in work and out of work.
The basic rate of Universal Credit (between £311.68 and £617.60 a month) will be increased – but only for those searching for work or in work. People who have been judged unfit for work through a Work Capability Assessment will have their payments cut.
On that front, Smith said: “Scotland already has a higher case load of recipients of disability and incapacity benefits through Universal Credit than the rest of the UK. And, with a more rapidly ageing population, it is likely that demand in Scotland will grow faster than England and Wales at a time when the UK Government is cutting spending on welfare.
"This will mean Scotland needs to dedicate a rising share of its own taxes to maintain benefits at their current value into the future.”
Why is the Government doing this?
There are a number of factors motivating the UK Government to cut benefits.
Their stated priority is to cut the number of people who claim benefits and are not required to work. According to the latest figures from the DWP this is 42% of Universal Credit claimants, a rising proportion, though 37% of people who claim the benefit are in work.
Secondly, the Government will put around £1bn of the money saved through cuts into employment services for people claiming benefits to find work, ITV News reports.
Finally, there is mounting expectation that ministers across the Government will be required to find cuts in their departments to fund increased defence spending in light of the war in Ukraine. Reports say they have all been asked to model funding cuts of as high as 11%.
