Cold weather payments responsibility transferred to the Scottish Government

Responsibility for cold weather payments for people in Scotland transferred to the Scottish Government at the start of the 2022-23 financial year, according to the Office for Budget Responsibility¹. The transfer is recorded in the OBR's Welfare trends report, published in May 2022, which sets out how devolved welfare responsibilities have moved to Scotland in stages¹.

The same report notes that carer's allowance and several disability benefits were transferred to Scotland in the 2018-19 and 2020-21 fiscal years respectively¹. Cold weather payments are the most recent of these transfers, taking effect from the start of 2022-23¹.

The OBR is the UK's independent fiscal watchdog, created in 2010 to provide analysis of the public finances¹. It was asked by the Government in December 2013 to take on additional responsibilities relating to the welfare cap, and Parliament formally included those requirements in the October 2015 edition of the Charter for Budget Responsibility¹. The January 2022 update to the Charter reduced how often the Welfare trends report must be published, from once a year to once every two years¹.

The report's main focus is on how non-pensioner welfare spending changed during and after recessions, comparing the pandemic with the three previous UK recessions of the past four decades¹. It records that economic output fell by 25 per cent between January 2020 and the trough in April 2020, that the unemployment rate peaked at only 5.2 per cent, and that total hours worked fell by 18 per cent between the first and second quarters of 2020¹. The temporary £20-a-week increase in universal credit standard allowances cost £4.2 billion in 2020-21, and an additional one-off payment of £500 to tax credits claimants in April 2021 cost £0.8 billion¹.

The report does not set out the payment rates, eligibility rules or start dates for the Scottish replacement for cold weather payments. Those details have not been reported in this document.

Why it matters for households

Cold weather payments are made to people on certain means-tested benefits during periods of very cold weather. From the start of 2022-23, the body responsible for them for people in Scotland is the Scottish Government rather than the UK Government¹. Households in Scotland receiving these payments are therefore dealt with under Scottish arrangements, while the equivalent payments in England, Wales and Northern Ireland remain with the UK Department for Work and Pensions.

The transfer sits alongside earlier moves of carer's allowance and several disability benefits to Scotland in 2018-19 and 2020-21¹. Taken together, these mean that a growing share of the benefits a Scottish household receives is administered in Scotland, which affects where decisions on rates and eligibility are taken. The OBR report does not state what, if anything, changes for claimants in practice at the point of transfer.

The report also sets out the wider context for benefit values. It says non-pensioner benefit rates are forecast to be 6 to 7 per cent lower in real terms in 2022-23 than in 2019-20, before largely recovering their pre-pandemic real value in 2023-24, reflecting the lag between inflation and annual uprating¹. It describes the 4.5 per cent year-on-year fall in the real value of unemployment-related benefits in 2022-23 as the largest since annual uprating began half a century ago, even excluding the removal of the temporary £20-a-week uplift¹.

What happens next

The OBR's next Welfare trends report is due under the revised Charter timetable of once every two years, following the January 2022 update¹. The report does not give a date for it. No further detail on the operation of cold weather payments in Scotland after the transfer is set out in the document.