Scottish Government Resilience Committee convened on cost of living

The First Minister convened the Scottish Government Resilience Committee on 11 August 2022 to discuss urgent steps to mitigate the cost of living crisis¹. The committee sat within a wider analytical structure: a cross Scottish Government group of analysts was set up in May 2022 to bring together evidence on the emerging crisis and use it to appraise policy options and support cross government decision making¹.

The crisis was driven by a rapid and sustained rise in inflation. UK CPI inflation rose from under 0.5% in February 2021 to a peak of 11.1% in October 2022, the highest rate for 41 years¹. From October 2022 CPI gradually reduced to reach the Bank of England's target rate of 2% by June 2024¹. The Bank of England raised interest rates 14 consecutive times from 0.1% in December 2021 to 5.25% in August 2023, then reduced them twice in 2024, in August and November, from 5.25% to 4.75%¹.

The pressures moved through distinct phases. Energy prices rose sharply first, then food: annual food price inflation reached 19.2% in March 2023, the highest rate of increase in food prices since 1977¹. Producers' input costs rose rapidly in 2022, hitting a peak of 24.1% in June 2022, and fell by 1.5% in the year to December 2024¹. For comparison, inflation in the US and Euro Area peaked at 9% and 10.6% respectively¹.

The Scottish Government's response included legislation and a budget revision. The Cost of Living (Tenant Protection) (Scotland) Act 2022, passed by the Scottish Parliament in early October 2022, imposed a temporary in-tenancy rent cap and moratorium on the enforcement of evictions¹. Following the expiry of measures on 31 March 2024, the rent adjudication process in the private rented sector has been modified for a period of one year¹. On 2 November 2022 the Scottish Government published an Emergency Budget Review¹. The Finance Minister estimated the Scottish Budget "was worth around £1.7 billion less than it was worth in December 2021"¹.

Why it matters for households

The committee met as household costs were rising faster than incomes. From early 2022 to mid-2023 the rate of inflation outpaced median wage growth in Scotland, and inflation also rose faster than benefits were uprated, meaning costs increased more quickly than average household incomes¹. The fuel poverty rate in Scotland increased from 24.6% in 2019 to 31.0% in 2022¹.

The effects were uneven. Low income households were more financially vulnerable entering the crisis, faced higher rates of inflation than better off households in the earlier acute phase, and often pay more for essential goods and services¹. Women, disabled people, ethnic minorities, rural households, larger households, young people, students and carers, lone parents and single person households, households in receipt of income related benefits, people narrowly ineligible for benefits and people with no recourse to public funds were particularly adversely affected, and some households have several of these characteristics, potentially compounding disadvantage¹. The report also notes that lower inflation does not mean prices are falling, only that they are rising less quickly, and that the large increases of the last three years have effectively been locked in¹.

What happens next

The report states that the longer term effects of the cost of living crisis continue to present serious economic and social challenges for Scotland and may negatively affect people's health, wellbeing and future resilience for years to come¹. It expands on a more detailed report published by the group in November 2022¹. No further committee meetings or measures are set out in the material available.