Axing child benefit cap in Scotland ‘will cost £50m more than announced’

The decision to scrap the child benefit cap in Scotland is estimated to cost at least £150 million, significantly higher than the initially announced figure of £100 million. Social justice secretary Shirley-Anne Somerville revealed to the Sunday Mail that the cost could rise annually. The SNP’s plan to mitigate the two-child benefit cap set by Westminster and allocate £3 million towards its implementation took Holyrood by surprise during finance secretary Shona Robison’s budget announcement.

The miscalculation in cost arose from using estimates from the Child Poverty Action Group without providing sufficient time for the Scottish Fiscal Commission to provide accurate official estimates. Somerville emphasised that the budget analysis is based on the Fiscal Commission’s estimate of around £150 million for the first year, with expected increases as more families and children fall below the poverty line due to the two-child cap. The additional payments for families with more than two children are scheduled to commence no earlier than 2026, coinciding with the Holyrood elections.

Introduced by the Tories in 2017, the UK’s two-child benefit cap has faced criticism for pushing families into poverty. Campaigners stress the need for further support for the estimated 240,000 children in poverty in Scotland, a number that far exceeds the 15,000 children targeted by the benefit cap plans. Despite claims of the announcement aiming to embarrass Scottish Labour, Somerville underscored the primary focus on aiding children in need and called for cross-party support to safeguard these families.

While campaigners initially estimated the cost of mitigating the policy at £100 million, the government relied on the Child Poverty Action Group’s data for budget proposals instead of official estimates. The situation mirrors past incidents like Liz Truss sidelining the Office for Budget Responsibility in a budget announcement. John Dickie from the Child Poverty Action Group in Scotland reiterated confidence in their figures amidst the budget discrepancy.

In conclusion, the recalculated cost for scrapping the child benefit cap in Scotland highlights the complexities of social welfare budgeting and the challenges in accurately assessing the financial implications of policy decisions. It underscores the critical importance of thorough research and consultation to ensure effective and sustainable implementation of initiatives aimed at addressing child poverty and supporting vulnerable families.