- Scotland spent almost a sixth – £1 billion – more on welfare than the funding provided by the UK government in 2024/25
- Scotland has the highest proportion of children in long-term workless households in Great Britain with child poverty targets missed
- Jobless couple with three children can receive combined benefits worth £45,500 a year in Glasgow, equivalent to a salary of £69,000
- New plan ahead of Holyrood elections sets out reforms to save almost £1 billion a year and refocus support on work and mental health treatment
The Scottish Government has poured billions of pounds of taxpayer cash into the country’s welfare state “with abandon”, according to a new report.
The research, entitled Benefitting Scotland?, finds that nearly a decade after major welfare powers were devolved, Scotland is spending significantly more than the rest of the UK on a “smorgasbord” of conflicting benefits and entitlements.
There is “minimal” evidence that the system is succeeding even on its own terms, warns the Centre for Social Justice. Persistent child poverty is running at 23 per cent, more than double the Scottish government’s eight per cent target.
At the same time, Scotland has the highest proportion of children living in long-term workless households in Great Britain at 11.3 per cent, and its rate of economic inactivity has gone from below England’s before 2016 to persistently above it.
The £28 billion annual welfare budget – almost a quarter of which is administered by the Scottish government – has ballooned out of control.
Last year Scottish ministers spent above and beyond the “block grant adjustment” – a grant allocated by the UK government to match non-devolved benefit spending – by almost £1 billion.
The cross-party think tank argues that Scotland could save hundreds of millions of pounds while achieving better outcomes.
Restricting eligibility to disability benefits for those with less severe mental health conditions and frontloading the Scottish Child Payment would save at least £800 million for the Scottish government to re-invest in treating the root causes of mental illness and supporting families directly through Whole Family Wellbeing Funding.
The report also highlights the scale of work disincentives in the system.
A couple with three children living in Glasgow can receive almost £45,500 per year by combining benefits. To match that income from work alone would require a salary of roughly £69,000 before tax from a single earner.
Even when parents move into employment, they can lose up to 79p of every additional pound earned once benefit tapers, income tax, national insurance and pension contributions are combined.
They also risk losing access to the myriad supplements layered on by the Scottish government, including the Scottish Child Payment, several Best Start Grants, a Carer’s Allowance Supplement, new Winter Heating Payments, and a plethora of one-off grants.
Ben Gregg, Head of Welfare at the Centre for Social Justice, said:
The Scottish government has missed its own child poverty targets, while pushing economic inactivity in Scotland from below to above England.
The welfare system is over budget, overly complex, and failing on its own terms. With Holyrood elections this year, there is a real opportunity to create a much leaner, far more effective system, focused on changing lives and tackling the root causes of poverty.
Notes to editors
The full report, Benefitting Scotland?, is available here.
The example of a workless couple with three children in Glasgow receiving around £45,500 a year in benefits combines reserved and devolved payments, including Universal Credit, average rates of health and housing support plus Scottish top ups. The gross salary equivalent of roughly £69,000 is calculated by comparing this net income to post tax earnings under current Scottish income tax and National Insurance rates.
