Scots hardship fund records third successive underspend

27 Jul 16

The Scottish Welfare Fund, which provides support to individuals and families in financial need, has been underspent for a third successive year, prompting fears about how effective Scotland’s new devolved social security powers may be in reaching the needy.

Independent figures released by the Scottish Government show that the fund, which is administered through the local authorities, was underspent by £1.5m or around 5% in 2015-16. This follows underspends of £2m in 2014-15 and £4.4m in 2013-14, the first year of the fund.

The figures come ahead of new powers being devolved to Holyrood over some 15% of social security spend in Scotland under the 2016 Scotland Act. A new Scottish Social Security Agency is being created to run the devolved benefits regime.

But the Scottish Government’s own independent poverty adviser, Naomi Eisenstadt, warned ministers in a January report of the need to take positive steps to ensure the fullest possible uptake by those entitled to the new benefits, and Labour has now voiced concern at the low uptake of the Scottish Welfare Fund help at a time when many families face financial difficulty.

Any unspent cash from the fund can be carried forward to the following year, but the persistent underspend raises questions about public awareness of its potential to help. The number of applications for help from the fund was down by some 4,500 last year.

The UK government contributes £24m a year to the Fund, which was formed after previous UK-wide benefits were scrapped, and the Scottish Government has topped up the total to around £33 million a year. Angela Constance, Cabinet secretary for social security, said that some 204,000 households have received grants worth £97.9m since the fund was created.

Most grants – some 54% – have gone to single-person claimants without children, with around a third of the awards going to families with children. The payments are made either as community care grants to assist people in meeting the costs of independent living, or as crisis grants, typically helping people in urgent difficulty to pay for food, clothing or heating.

Constance said that changes had been made to the allocation formula this year to help ensure that the money is channelled to where it is most needed. “No-one in Scotland should be living in poverty and it is crucial that we are able to give support to those most in need, when they need it,” she said.

  • Keith Aitken
    Keith Aitken

    covers Scottish affairs for Public Finance from Edinburgh. He was formerly economics editor and chief leader writer on The Scotsman and now has a busy freelance career as a writer, broadcaster and event chair.

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