Scottish Government to have allocated almost £3 billion in cost of living mitigation by end of March 2023

The Scottish Government will have allocated almost £3 billion in measures to mitigate the cost of living crisis on households by the end of March 2023, according to its 2022/23 Programme for Government, as set out in an analytical report published on 2 November 2022¹.

The report states that the package spans support for energy bills, childcare, health and travel, as well as social security payments that it says are either not available elsewhere in the UK or are more generous¹. Among the measures, the Scottish Child Payment will increase to £25 per week per eligible child from November¹. The Fuel Insecurity Fund will be doubled to £20 million to help households at risk of self-disconnection or self-rationing of energy use, and local authorities will receive additional Discretionary Housing Payment funding¹.

Emergency legislation is also providing help for tenants by freezing rents and imposing a moratorium on evictions until at least 31 March 2023¹.

The report gives context for the pressure on household budgets. It says the latest UK Consumer Price Index shows inflation running at 10.1%, the highest level since 1982, and that the Bank of England was forecasting the UK would enter recession later in 2022 and remain in recession for much of 2023¹. Scottish Government modelling estimates around 860,000 (35%) fuel-poor households in Scotland, of which 600,000 (24%) will be in extreme fuel poverty¹.

The report identifies the households it expects to be most negatively affected: larger families; households in receipt of means-tested benefits, and those narrowly ineligible for them; households who rent their homes; disabled households; households with an unpaid carer; gypsy/travellers; rural and island households; single person households and single parent households¹. It adds that minority ethnic groups and women are over-represented in these households¹.

Why it matters for households

The £3 billion figure is a cumulative allocation across the 2022/23 financial year, not new money announced on one day, and it covers spending that runs until the end of March 2023¹. For families with eligible children, the Scottish Child Payment rate rises to £25 per week per child from November 2022¹. For private and social tenants, the rent freeze and eviction moratorium are stated to run until at least 31 March 2023¹. Households at risk of having their energy supply disconnected, or of rationing their own use, are the stated focus of the £20 million Fuel Insecurity Fund¹.

The report also notes that the crisis will affect households differently, with low income households most at risk, and that rising mortgage interest rates mean homeowners on variable rates, or whose fixed deals are expiring, may face large increases in payments¹. It says the UK Government's response is insufficient to fully address the harms caused by the crisis, and that further targeted action will be required¹.

What happens next

The measures described run to the end of March 2023, the point at which the Scottish Government says the almost £3 billion will have been allocated¹. The rent freeze and eviction moratorium are stated to last until at least 31 March 2023¹. The report says further analysis will be required over the coming months to understand the emerging consequences of the crisis¹. No decisions beyond those dates are set out in the report.