Westminster welfare cuts to slash £1 billion from Scotland’s budget

Disabled and chronically ill Scots are worried about the effect the Westminster government’s cuts to welfare are going to have on them. And the uncertainty Scots face is a direct result of devolution.

The detailed costs have not been finalised yet but economists say it is likely to mean a cut of £1 billion from Scotland’s block grant. That is because Scotland gets a population share of what England decides to spend. 

Under devolution, Scotland gets powers on paper in areas like welfare. But in reality, the Scottish government doesn’t control the levers of power. Holyrood is often held accountable for things they can’t control. 

If Scotland were independent and in control of tax, spending and borrowing it would be able to make and stick to policies in line with what its people vote for.

But as it is, whatever Westminster decides automatically impacts the money Holyrood has to spend. Devolution is becoming an impossible position. 

What are Westminster’s cuts affecting disabled people?

The UK government has said it wants to make £5 billion of savings through welfare reform. The biggest change will be making it harder to claim personal independence payment (PIP) and other changes.

These changes, which will come into effect in April 2026, mean that more than a million disabled and ill people across the UK will lose the PIP and other linked benefits like council tax reductions. 

The Joseph Rowntree Trust made an impact assessment that found the changes would push 250,000 included 50,000 children into deep poverty. 

One disabled carer who stands to lose most of her income told the Guardian: “We live in fear of the whims of successive governments. I can’t sleep at the moment, I’m so scared.”

How do they affect Scotland?

The Scottish government has said it will try not to pass through all of the Westminster changes. But the cuts in England will impact on Scotland’s block grant so it may not be possible to completely make up for that shortfall. 

The UK government has not released detailed costings for the savings it plans to make but back of an envelope calculations suggest that it is likely to mean £1 billion cut from the Scottish block grant. 

Cabinet Secretary for Social Justice Shirley-Anne Somerville said the welfare reforms will be "devastating" for disabled people, Scotland's social justice secretary said and predicted they would have a "severe" effect on Holyrood finances.

But she also said that the Scottish government did not intend to follow Westminster’s approach because that would be exceptionally detrimental to people who receive those payments and are entitled to them.

One of the big problems for disabled people is uncertainty. But the UK government did not consult with the Scottish government before unveiling these changes in a Green Paper. They also have not made it clear how this will impact the Scottish budget. 

Some argue that it is not right to call these cuts to the Scottish budget because they won’t come into force before April 2026. 

Inflation means the grant had to go up just to stay still. And with an aging population and high rates of chronic illness, the number of disabled and ill people is going up. 

But the simple fact is that even if the Scottish Government’s block grant goes up in terms of raw numbers, they will be landed with new rules that mean a cut to people’s payments next year.  

Disabled and ill people are going to be pushed further into poverty

Many people with chronic illness and disability are already struggling. They may be in or out of work - about one in six people receiving PIP is in work, and uses the money to help with the extra costs of life for disabled people. About 40% of them are suffering from a mental health condition.

These groups are already amongst the poorest and most vulnerable in society. According to the Joseph Rowntree Foundation (JRF), around 70% of families where someone has a disability are already going without essentials like food and heating.

The poverty rate for those with a mental health condition is 50% compared with 29% of people with a physical or other type of disability.

These further cuts are going to land squarely on this vulnerable group, adding to the challenges they already face.

Conclusion

Yet again, Scotland is seeing the limits of devolution. It is hard to make policy when your budget goes up and down because it is decided on the basis of a population share of policies set by another government in another country.

The Scottish government has the power on paper to set policy on some aspects of welfare. In practice it doesn’t have the power to do that. Because of this it is unable to reassure the most vulnerable in society.

Meanwhile the privatised energy companies that were handed Scotland’s infrastructure by governments Scotland didn’t vote for post huge profits on the backs of ordinary bill payers. The richest in the UK are getting richer, the wealth of billionaires has doubled in five years. An independent Scoltand could make different choices. Westminster’s values are not Scotland’s values. An independent Scotland could make different choices - and follow through on them.

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