SCOTS taxpayers could face hundreds of millions of fresh cuts to frontline services if Nats ministers refuse to follow the crackdown on benefits spending by the UK Government.
Work and pensions secretary Liz Kendall has outlined £5billion in planned cuts as she set out Labour’s proposals to make it harder to get disability benefits, with the biggest savings coming from tightening rules about who is eligible for Personal Independence Payment.
As much as £570million could be cut from the Scottish Government’s funding from the UK Government if the £5billion in savings all come from the changes to PIP – with the final figure likely to be lower.
But it could mean Nats chiefs may be forced to find extra savings within their budget to plug the gap if they keep a more generous benefits system in place.
Beatrice Boileau, a researcher at the Institute for Fiscal Studies, said: “Every £1billion of cuts to PIP spending in 2029–30 would represent a cut of around £114 million to the associated Block Grant Adjustment in Scotland.”
And Casey Smith, a researcher at think-tank IPPR Scotland researcher, added: “If today’s decision by the UK government filters through as a reduction in the Scottish budget, the Scottish government will face pressure either to follow suit and tighten eligibility, or make cuts elsewhere.
“The ball is in the Scottish government’s court as to how it chooses to respond.”
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SNP social security secretary Shirley-Anne Somerville said the impact on the Scottish budget could be “severe”.
She said: “We do not know what the implications for the Scottish Government will be.
“I do fear that they will be really really quite severe and if we’re looking at changes to personal independence payment then that will inevitably have a big impact on the Scottish Government budget as well.”
Nats chiefs are already set to spend £314million more on disability handouts next financial year compared to the amount Holyrood gets from Westminster as part of the block grant.
And in Scotland, 14 per cent of the working population receive ADP or another disability benefit compared to nine per cent in England and Wales with both the population and funding gap set to grow under the new plans.
It could mean major cuts to other areas of public sector spending to maintain the higher benefits spending.
PIP is being phased out in Scotland after ministers launched the Adult Disability Payment in 2022 as a replacement with those on PIP having either already moved to ADP or in the process of doing so.
Ministers are already expected to spend £1.5billion more on benefits than they receive in the block grant by the end of the decade – a figure which is also likely to significantly increase.
The UK Government yesterday defended their plans, saying it would create a “pro-work” system as they faced claims the changes were “immoral and devastating”.
Ms Kendall said the current social security system is “failing the very people it is supposed to help and holding our country back”, while Prime Minister Sir Keir Starmer said it would be “morally bankrupt” to leave people “trapped out of work and abandoned by the system”.
She also said benefits claimants will be given the “right to try”, which allow those on disability handouts avoid penalties if they attempt to return to work in the hope of boosting the numbers returning to work.
Scottish Secretary Ian Murray later said the changes would not impact the Scottish budget for 2025/26 – and insisted the SNP should work with the UK Government on the changes.
He said: “The Scottish Government should be working very closely with us to try and resolve some of these big problems in the Scottish economy and the waste of Scottish talent that we have by people languishing on the benefit system and trapped within it.”
