The Scottish Government has highlighted around £3 billion of spending per year on policies that help tackle the cost of living. This blog looks at those policies and how spending on them has changed over three years. It also looks at how people’s views of their own household finances have changed over the last two years.
The Cabinet Secretary for Social Justice, Shirley-Anne Somerville MSP, wrote to the Social Justice and Social Security Committee in February setting out a list of policies that: “help mitigate the impacts of the cost of living crisis on households.” This showed a total of £2,992.3 million in 2022-23 and forecast spend of £2,959.7 million in 2023-24, rising to £3,175.9 million in 2024-25.
The full list is reproduced at the end of this blog.
Long-standing policies
Two years ago this SPICe blog pointed out that many of the policies have been in place for many years – such as spending on council tax reduction and free prescriptions. This blog focuses more on how spending on the listed items has changed and whether they are specifically targeted on low-income households and children.
Largest areas of spending
The first chart shows how funding for Early Learning and Childcare is by far the largest single item of ‘cost of living’ support in each of the three years. This is a largely universal policy. (Provision for two year olds is targeted at low-income households, but only 7% of children participating in 2023 were aged two).
Main changes
The big changes across the three years are:
- an additional £169 million on the Scottish Child Payment – reflecting the increase to £25 (now £26.70 per week) and extension to children under 16
- an additional £100 million on concessionary travel to fund the free bus pass for under 22s
- the £280 million for a Cost-of-Living council tax payment in 2022-23 only and the £144 million for the Council Tax Freeze in 2023-24 only.
Some smaller policies have come and gone, notably the Fuel Insecurity Fund which was available in 2022-23 and 2023-24 only. (See table at end).
Policies targeted at low-income households
Around half of the spending is on policies specifically targeted at low-income households. The largest areas of spend are:
- the Scottish Child Payment
- council tax reduction and water charge reduction
Spending targeted at low-income households has increased by £227 million since 2022-23, almost entirely due to the increase in spending on the Scottish Child Payment.
Policies targeted at children
The scale of early learning and childcare funding means that around half of these ‘cost of living’ policies are targeted on children, and due mainly to the Scottish Child Payment, an increasing proportion is targeted at children in low-income households.
Of course, low-income households and children will benefit from policies not specifically targeted at them if it increases the household’s resources as a whole.
Type of costs
It’s also interesting to categorise the policies by whether they are specifically focused on various essential costs. The next chart looks at which of the policies are targeted on:
- food
- energy
- childcare
- health
- transport
- housing
- other.
Again, we see the focus on mitigating childcare costs and spending on young people’s free bus pass. There is a less consistent approach to housing costs due to the £150 council tax cost of living payment being made in 2022-23 only and the council tax freeze in 2024-25 only. The increase in ‘other’ is almost entirely due to the Scottish Child Payment.
In January 2024, around half of people in Scotland were concerned about some aspect of household spending. The next chart shows that most concerns were around groceries, heating and household repairs.
People are managing less well now than two years ago
Although inflation is now falling, fewer people in Scotland say they are managing well financially now than two years ago. In January 2022, 40% of people said they were managing well financially. This dropped to 27% by August 2022. Since then it has fluctuated between 28% and 35%. Latest figures are for January 2024, which showed that 30% of people were managing well financially.
The full list of policies
The table below lists the ‘cost of living’ policies in full, showing how spending has changed over three years.
Policy | Final 22/23 resource (£m) | Forecast 23/24 resource (£m) | Forecast 24/25 resource (£m) |
Access to free period products | 6.5 | 6.5 | 6.1 |
Baby box | 9 | 9 | 9 |
Best Start Foods | 12.6 | 14 | 18.1 |
Best Start Grant | 20.8 | 21.8 | 21.3 |
Bridging payments (incl administration) | 75 | 0 | 0 |
Carer’s Allowance Supplement | 44 | 47.5 | 55.1 |
Child Winter Heating Payment | 5.7 | 7.1 | 8.7 |
Concessionary Travel | 270.2 | 362.2 | 370 |
Cost of living payment or council tax credit (£150) | 280 | 0 | 0 |
Council Tax Freeze | 0 | 0 | 144 |
Council Tax Reduction | 351 | 351 | 351 |
Discretionary Housing Payments | 84.1 | 83.7 | 90.5 |
Free NHS eye examinations and NHS optical vouchers etc | 111.3 | 123.5 | 123.9 |
Free Prescriptions | 57 | 57 | 57 |
Free dental check ups | 43 | 43 | 62 |
Free school meals (universal to P4/5 and special schools) | 42.2 | 42.2 | 42.2 |
Free school meals – holiday support | 21.8 | 21.8 | 21.8 |
Fuel Insecurity Fund | 20 | 30 | 0 |
Funded early learning and childcare | 1006 | 996.5 | 996.5 |
Funeral Support Payment | 9.8 | 12.9 | 12.2 |
Heat, energy efficiency and fuel poverty measures | 161 | 161 | 178 |
Island cost crisis emergency fund | 1.4 | 1 | 0 |
Job Start Payment | 0.2 | 1.2 | 0.4 |
School clothing grant | 11.8 | 13 | 13.9 |
School meal debt | 0 | 1.5 | 1.5 |
Scottish Child Payment | 213.2 | 426.8 | 457.3 |
Scottish Welfare Fund (incl. admin) | 43.5 | 41 | 41 |
Summer 2022 holiday programme | 10 | 0 | 0 |
Tackling food insecurity | 0.8 | 1.4 | 2 |
Water charge reduction scheme | 58 | 60 | 67 |
Winter funding for food groups | 1.8 | 0 | 0 |
Winter heating payment | 19.8 | 22.1 | 24.4 |
Young carer grant | 0.8 | 1 | 1 |
Total | 2992.3 | 2959.7 | 3175.9 |
Camilla Kidner, SPICe, March 2024