Concerns raised over growing black hole for devolved disability benefits
The Scottish Government’s “compassionate” benefits system is creating a funding gap – and auditors say ministers must set out a plan to close it.
Adult Disability Payment (ADP) – the largest of the devolved benefits – was created as a replacement for the UK Government’s Personal Independence Payment (Pip).
Paid out to around 500,000 people, the total spent on the benefit is forecast to reach £770m by 2029-30.
Watchdog Audit Scotland has said the government has not set out how it will be able to cover the cost, or provided a clear strategy to manage any impact on the Scottish budget that results from UK Government decisions on areas like Pip.
More than 318,000 people have moved from Pip to ADP, with close to 160,000 others joining ADP as new claimants after campaigns encouraging eligible people to apply.
The benefit is administered by Social Security Scotland, which has dignity, fairness, and respect as statutory principles. Ministers have placed much emphasis on differences in the application and review processes for ADP, with the system described as being “more compassionate” than that operated by the Department for Work and Pensions.
A total of £2.6bn was spent on ADP in 2023-24, which was £141m more than the cash available to Scottish ministers through the UK block grant.
The projected ADP spending gap was worked out by the Scottish Fiscal Commission. Overall, the fiscal gap for devolved social security is expected to hit £2bn by 2029-30.
But performance data on the system is limited, the watchdog found, and it is “difficult to see which parts of the ADP application and review process make the biggest difference to people, and how much they cost”. Government understanding of how ADP improves the lives of disabled people is said to be “under-developed” – with information gaps making it tough for ministers to work out how best to allocate spending to ensure value for the public purse.
Stephen Boyle, Auditor General for Scotland, commented: “Adult Disability Payment is a lifeline for thousands of people in Scotland. It is also the clearest example of how the Scottish Government’s commitment to making the social security process less onerous has come at a cost.”
Social Justice Secretary Shirley-Anne Somerville said the government is taking action to improve public service finance, adding: “Benefit expenditure is the result of our conscious decision to invest in the people of Scotland.
“Here, when somebody is eligible for support, they meet a humane system. Our efforts are possible because we balance our budget every year despite over a decade of austerity and punitive welfare cuts from successive UK governments.”
However, Boyle said: “Given that the gap between available funding and ADP spending is forecast to grow significantly, the Scottish Government needs to set out how the gap will be managed over the medium-term, and how this will impact on the lives of disabled people.
“To ensure money is well spent, ministers need to be much clearer on what parts of the ADP application and review process are making the biggest difference to disabled people, and what the costs are compared to PIP.”
Labour's Michael Marra said the report “lays bare the financial incompetence of this SNP government”, adding: “It is right that we build a social security system that works for people, but those aims are meaningless without a plan to pay for it or a way to monitor success.”
Tory Alexander Stewart commented: “SNP ministers are so wedded to their approach of doing things differently when it comes to the welfare system that they have typically given no thought to the ever-increasing funding gap created by their higher spending on benefits.
“Economic experts have made it clear that if the SNP don’t act on this then hard-pressed Scots will face more tax rises or cuts to public services. The SNP must start taking responsibility for their rising welfare bill. While it must continue to protect the most vulnerable, it also must deliver fairness and value for taxpayers and claimants alike.”
Somerville said: “We will not cut Adult Disability Payment and I urge the UK Government to follow our lead to ensure disabled people have the support they need.
“The Scottish Government will unapologetically continue to prioritise measures to reduce poverty and inequality, including through policies like the Scottish Child Payment and our plans to eradicate the two-child limit next year.”
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