Published:

UK Budget

Day(s) after reaction #3 – How will the “Back to Work Plan” impact Scottish benefit recipients??

It became clear on Wednesday that the proposals in the UK Government’s Back to Work Plan contain a confusing mixture of devolved and reserved responsibilities, which leave us slightly mystified as to exactly how this is all going to work in practice.

In his speech, the Chancellor said:

“… last week I announced our Back to Work Plan. We will reform the Fit Note process so that treatment rather than time off work becomes the default. We will reform the Work Capability Assessment to reflect greater flexibility and availability of home working after the pandemic. And we will spend £1.3 billion over the next five years to help nearly 700,000 people with health conditions find jobs. Over 180,000 more people will be helped through the Universal Support Programme and nearly 500,000 more people will be offered treatment for mental health conditions and employment support.

Over the forecast period, the OBR judge these measures will more than halve the net flow of people who are signed off work with no work search requirements. At the same time, we will provide a further £1.3 billion of funding to offer extra help to the 300,000 people who have been unemployed for over a year without having sickness or a disability.

But we will ask for something in return. If after 18 months of intensive support jobseekers have not found a job, we will roll out a programme requiring them to take part in a mandatory work placement to increase their skills and improve their employability. And if they choose not to engage with the work search process for six months, we will close their case and stop their benefits.”

These changes have the potential to impact recipients of Universal Credit. The complication is that UC is reserved, while many elements of employment support – the “extra help” that the Chancellor talks about – is, on the whole, devolved.

Because of this, many of the support mechanisms to help people avoid sanctions in England (& Wales in most cases) generated Barnett consequentials, including:

  • Restart: expand eligibility and extend the scheme for two years
  • Mandatory Work Placements: phased rollout
  • Universal Support: increase to 100,000 starts per year
  • Talking Therapies: expand access and increase provision
  • Individual Placement and Support (IPS): expand access
  • Sanctions: closing claims for disengaged claimants & end of scheme review
  • Fit Note Reform trial

So, in summary, it looks like the sanctions could be applied in a reserved benefit, following support that may or may not be provided by the Scottish devolved employability system as the Scottish Government could choose to spend the money on something else.

We wait for more details from both the UK & Scottish Governments about how this is going to work in practice.

Authors

Mairi is the Director of the Fraser of Allander Institute. Previously, she was the Deputy Chief Executive of the Scottish Fiscal Commission and the Head of National Accounts at the Scottish Government and has over a decade of experience working in different areas of statistics and analysis.