Report claims welfare reforms will cost Scots £3.7 billion by 2020-21

UK Government welfare reforms introduced since the Conservatives came to power in 2010 will result in the loss of £3.7 billion worth of benefits in Scotland by 2020-21, a new report has estimated.

It also warned that without changes, “the impacts of other cuts will continue to grow over the next few years” as more people are transferred on to Universal Credit (UC) – which replaces a number of other welfare payments.

Social Security Secretary Shirley-Anne Somerville said the report from the Scottish Government on the impact of benefit reforms “paints a stark picture of the reality of life for many people in Scotland”.

She has now sent a copy of the report of Esther McVey, the UK Government’s Work and Pensions Secretary, urging her to “immediately end the freeze on benefits”.

Ms Somerville made the call after the report showed the benefit freeze would result in the loss of £367 million to Scots by 2020-21.

“Welfare reforms imposed by successive UK governments since 2010 will have resulted in an overall £3.7 billion reduction in welfare spending in Scotland by 2020-21,” the report stated.

The Scottish Government claimed the “reductions in the generosity of social security” would make it “more difficult” for it to meet targets to cut child poverty.

The reforms with the largest financial impact are the benefit freeze, the reduction of UC work allowances, and the introduction of the two-child limit, with these respectively responsible for the loss of £236 million and £92 million respectively.

Since the benefit cap – which limits how much individuals and families can claim in payments – was introduced in April 2013, almost 11,000 Scottish households have been subjected to it, the report said.

And since the limit was lowed in 2016, an average of 3,500 households north of the border have had their income capped each month.

The introduction of a two-child limit for tax credits and UC has affected 3,800 people receiving benefits in Scotland.

Meanwhile the report said there “appear to be persistent problems” in the eligibility for the Personal Independence Payment, which replaced the Disability Living Allowance.

With Holyrood now having some responsibility for welfare, the report said 45% of those claiming UC had opted to take up changes introduced by Holyrood.

Scottish reforms mean people can choose to receive payments fortnightly instead of monthly, or to have part of the payment go direct to their landlord.

Of the 5,800 people offered these between October 4 2017 and December 31 2017, 1,600 opted to have fortnightly payments, 500 offered to have the housing element of UC paid to their landlord and a further 500 took up both these options.

The Scottish Government has said it will spend an estimated £125 million in 2018-19 on mitigating the impact of Westminster welfare reforms.

Ms Somerville said: “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.”

She added: “These cruel cuts are forcing more people into poverty at the very time the Scottish Government is focused on getting children and families out of poverty.

“More and more families are finding it hard to make ends meet as prices of essentials go up and the levels of their income and benefits go down. The increased reliance on food banks is a damning indictment.

“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.”

The director of the Poverty Alliance, Peter Kelly, backed calls for the benefits freeze to be brought to an end.

He said: “Scotland is a compassionate country where we all believe everyone should have a decent standard of living. The help that people receive through social security is important in helping to make that happen. This report shows that more needs to be done.

“To ensure everyone has a decent standard of living we need to see an end to the freeze in benefit levels. The cost of living hasn’t been frozen, so it’s right that social security payments should keep up with those costs.”