Partial Business and Regulatory Impact Assessment
Title of Proposal 1. Social Security Assistance (Investigation of Offences) (Scotland) Regulations 2020 and Code of Practice for Investigations
Purpose and intended effect
Objective 2. Social Security Assistance (Investigation of Offences)(Scotland) Regulations 2020 ensure that in circumstances where government funds may have been paid out as a result of intentional misrepresentation or omission, Social Security Scotland has necessary and proportionate powers to gather information relevant to an investigation. They set out who is permitted to use these powers and the circumstances under which they can be used. 3. The Code of Practice for Investigations sets out how Social Security Scotland will use its regulatory powers to conduct investigations and provides information on how it will ensure people are treated fairly and with dignity and respect during that process.
Background 4. The Social Security (Scotland) Act 2018 1 (the Act) was brought forward as a result of the changes to the devolution settlement enacted in the Scotland Act 2016. 5. Social Security Scotland began administering social security benefits in September 2018, and has since started paying Carer’s Allowance Supplement, Pregnancy and Baby, Early Learning and School Age Payments, Best Start Foods, Funeral Support Payments and the Young Carer Grant. 6. As well as paying out benefits from public funds, in accordance with the Scottish Public Finance Manual, Social Security Scotland is also responsible for investigating allegations or suspicions of offences. It will be important to do this effectively in a way that is consistent with the principles of the Act, our Charter and in a way that is fair, objective, and presumes innocence. 7. To provide the tools necessary to do this effectively, Section 75 of the Act allows Scottish Ministers to confer powers for the Investigation of Offences through regulations and to create offences in connection with investigations. Section 76 requires that a Code of Practice for Investigations regarding the use of these regulatory powers must be consulted on, published and laid in Parliament. 8. The regulations made under the 2018 Act and the Code of Practice for Investigations are intended to be used by a specialist division of Social Security Scotland. The Fraud and Error Resolution Division (FERD) will investigate reports or suspicions of offences. In using these powers FERD officers will adhere to the Code of Practice for Investigations which will also set out standards of conduct to
1 http://www.legislation.gov.uk/asp/2018/9/contents/enacted
be employed during investigations, and how people will be treated with dignity and respect.
Rationale for Government intervention
9. The Scottish Public Finance Manual sets out that Scottish Government business areas undertaking expenditure must satisfy themselves that there is statutory authority for the activity giving rise to the expenditure, and that the expenditure is wholly in line with the relevant enabling statute. Therefore Social Security Scotland has a responsibility to ensure that its resources are used economically, efficiently and effectively. Social security benefits are an investment in the people of Scotland and should be paid out only where they have been legally obtained, consistent with government policy. 10. While the vast majority of applications for benefit made to Social Security Scotland will be genuine, we know that where public money is being paid out there will be attempts to defraud. Where there is a suspicion that this has occurred, it is incumbent upon the agency to investigate, take appropriate action where necessary to recover the funds and take enforcement action, if it believes an offence has been committed. As Specialist Reporting Agency it will be crucial that Social Security Scotland has the ability to gather relevant evidence from businesses and organisations to meet the burden of proof required by the Crown Office and Procurator Fiscal Service (COPFS).
Within Government
11. The development of these regulations began with consideration of the existing UK system’s investigatory powers and Code of Practice. This legislation informed the development of the proposed regulations and Code of Practice with input and advice from the Crown Office and Procurator Fiscal Service, NHS Scotland, the Student Award Agency for Scotland, the Department for Work and Pensions, Marine Scotland, Food Safety Scotland, Police Scotland, the Scottish Environment Protection Agency, the Scottish Public Pensions Agency and the Department of Communities Northern Ireland. Consultation Process
12. In July 2016, in advance of detailed policy formulation, a full public consultation was undertaken in relation to the creation of Social Security in Scotland. A scoping workshop was also held several stakeholders including Citizen Advice Scotland, HIV Scotland and Scottish Council on Voluntary Organisations in March 2018 to discuss in more detail the content of Investigation of Offences regulations and associated Code of Practice. 13. A further public consultation ran from 6 August until 29 October 2018 seeking views from over 200 organisations including third sector, charities and businesses that may be impacted, a further stakeholder workshop took place during that consultation period. This was attended by Govanhill Housing Association, Money Matters, One Parent Families Scotland, Citizens Advice Scotland, and Citizens Advice Bureau Musselburgh.
14. A total of 18 written responses to the consultation were received, 6 from individuals and 12 from organisations. The independent analysis of the responses was undertaken by KSO Research. Respondents represented a range of individuals and organisations with knowledge and experience of, or an interest in, social security matters. These included: • Eight third sector organisations; o Inclusion Scotland o Scottish Independent Advocacy Alliance o Shelter Scotland o Citizens Advice Scotland o Child Poverty Action Group in Scotland o Scottish Women’s Aid o Poverty Alliance o One Parent Family Scotland • Local authorities (Aberdeenshire and Aberdeen City); • Six individuals; • NHS National Services Scotland; and • The Information Commissioner’s Office
15. The Scottish Parliament’s Social Security Committee sought written views on 27 September 2018 and received a response from Inclusion Scotland.
Business
16. The Scottish Government engaged with a number of third sector groups with direct involvement in social security matters and brought the public consultation to the attention of a list of around 200 stakeholders including the financial sector and utilities. No commercial enterprises have been identified as being particularly affected by the proposed regulations nor did any respond to the consultation.
Options
17. When developing the regulations and Code of Practice the Scottish Government gave consideration to the following: Option 1 – Create regulations that replicate the UK fraud investigation powers and a Code that mirrors the DWP Code of Practice for Obtaining Information
Option 2 – Create new regulations and a Code of Practice for Investigations for specific to the needs of the Scottish social security system
Option 3 – Do nothing
Option 2 has been chosen to create bespoke regulations to meet the requirement to investigate a range of benefits, known and unknown at this time.
Sectors and groups affected
18. The DWP retains its existing powers to investigate UK reserved benefits. As devolved benefits will in the main replace their DWP equivalent, or be predicated on receipt of a reserved benefit e.g. Scottish Child Payment, the regulations and Code of Practice the Scottish Government has no reason to believe devolved Social Security will result in any significant change in behaviour of applicants or overall demand for supporting services. 19. Levels of commission of offences will be measured and monitored as the Scottish social security benefits roll out. 20. It is expected that the introduction of devolved social security in Scotland will incur costs generally for welfare rights organizations who advise people on their entitlement(s) to benefits. While it is not possible to quantify these costs at this time, it is expected they would be in relation to upskilling staff in the new Scottish social security system and associated benefits. There may be an expectation that a proportion of these costs may be related to the law and operational procedures surrounding investigations. 21. Where devolved benefits are similar to those delivered by DWP, it is likely that the organisations that FERD will request information from, are also likely to be similar. However, the Scottish Government is engaged in a rolling programme of benefit implementation where the detailed eligibility criteria of some of the benefits have yet to be defined. As a result, it not possible to anticipate all of the organisation who may in future be required to provide information relevant to an investigation. 22. Organisations that fall within the scope of the regulations will be expected to comply with a request for information. In the Scottish system, a refusal to comply without a reasonable excuse may be an offence.
Benefits • Meets the requirements of the Scottish Public Finance Manual and is in line with the wider Scottish public sector. • Ensures only those entitled to assistance receive it. • The regulations make provision for an effective fraud investigation service, within Social Security Scotland. • Ensures Social Security Scotland investigators follow best practice. It is designed to give assurances about training and accountability of staff carrying out investigations and the processes that they will be required to follow.
Costs • Advice organisations may incur some costs initially. As new benefits bed in staff will require familiarisation with the new regulations and processes of the devolved social security system. • There may be some administrative costs incurred by businesses or other organisations in responding to requests for specified information as part of an investigation.
Scottish Firms Impact Test
23. During the consultation process, no concerns were raised beyond the third sector and as a result, the Scottish Government has no reason to suspect that that the regulations or Code of Practice for Investigations are likely to significantly affect commercial organisations. Competition Assessment
24. The Scottish Government does not believe that the regulations or Code of Practice will have an adverse impact on the competitiveness of Scottish companies or the third sector within the UK, Scotland or elsewhere in Europe or the rest of the world. Additionally the Scottish Government does not expect there to be any significant impact on the operational business of local authorities or health boards as a result of introducing this provision. 25. This statutory power to require information is broadly similar to that of the Department for Work and Pensions, who currently investigate fraud for existing reserved benefits. Social Security Scotland will take over the administration of several of those benefits and therefore would not anticipate a significant increase in requests for information overall.
Legal Aid Impact Test
26. The Scottish Government does not anticipate significant impacts on the legal aid budget as a result of the introduction of the Investigation of Offences regulations relating to fraud investigations or the Code of Practice for Investigations. 27. Where there is a fraud investigation by DWP, ‘Legal Advice and Assistance’ is already available to individuals through the statutory scheme of Advice and Assistance and Civil legal aid. This will similarly be available to Social Security Scotland clients. Where an offence is reported to the Crown Office and Procurator Fiscal Service, criminal legal aid would also be available. 28. In order to mitigate the effects of multiple agencies investigating similar, linked or related offences, the Scottish Government has committed to investigating with other government departments where there is a common interest and to joint reporting to the Crown Office and Procurator Fiscal. 29. Demand for legal services in relation to investigations is not anticipated to be significantly higher as a result of devolved social security. Disability benefits are not means tested and legal advice and assistance would remain subject to eligibility testing dependent on the type of assistance sought. 30. If in the fullness of time it becomes apparent that Legal Aid budgets are significantly impacted the Scottish Government will give consideration to how this can be addressed.
Enforcement, sanctions and monitoring
31. The regulations would require organisations to provide information as appropriate or risk committing an offence for which they would be liable on summary conviction to a fine not exceeding level 3 on the standard scale (currently £1000). 32. Monitoring of the fitness for purpose of the regulations will be reported upon by the Scottish Government. 33. The Scottish Information Commissioner can investigate a public authority if they believe that it may be failing to comply with the terms of the Data Protection Act 2018 or the associated Code of Practice. 34. Audit Scotland will monitor and report on the delivery of the social security system, including Social Security Scotland.
Summary and recommendation
35. As part of a wider process, the 2018 Act itself and the implementation of the Act, the regulations and Code of Practice reflect Scottish Ministers vision of a rights- based system founded on the principles of dignity, fairness and respect.
Summary costs and benefits table
36. Beyond the already identified general impacts of the introduction of devolved social security benefits in Scotland, the Scottish Government is unaware of any evidence to suggest that Scottish businesses will be significantly impacted by the introduction of the Social Security Assistance (Investigation of Offences)(Scotland) Regulations 2020 or the accompanying Code of Practice for Investigations.
Option Total benefit per annum: Total cost per annum: Economic, environmental, social, Economic, environmental, social, policy and administrative policy and administrative 1 Limited benefit. Administratively A minimal potential cost to put in place quick option, not fully reflecting the for Scottish Government and minimal overarching policy requirements or changes to existing processes and the rolling nature of the Social procedure for other organisations to Security Programme. adapt to. However, this may result in fraud relating to some devolved benefits not being investigated effectively. 2 Creation of bespoke regulations Time and resource intensive with the and Code of Practice reflects the additional risk of not being ready in overarching policy requirements time for Agency delivering the first and is flexible enough to reflect the wave of benefits. Outside rolling nature of the Social Security organisations may incur additional Programme. costs familiarising themselves with new law and procedures.
3 Administratively quickest and least Minimal cost, not fully reflecting the resource intensive option, existing overarching policy requirements or the statutory powers would be used. specific requirements of the Social Security Programme. Investigation will still be required with an accompanying Code of Practice for the use of existing statutory powers. This may mean fraud cannot be investigated effectively with negative impacts on the public finances.
Declaration and publication
The Cabinet Secretary or Minister responsible for the policy (or the Chief Executive of non- departmental public bodies and other agencies if appropriate) is required to sign off all BRIAs prior to publication.
• Sign-off for Partial BRIAs:
I have read the Business and Regulatory Impact Assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options. I am satisfied that business impact has been assessed with the support of businesses in Scotland.
Signed: Shirley-Anne Somerville
Date: 23rd January 2020
Minister's name: Shirley-Anne Somerville Minister's title: Cabinet Secretary for Social Security and Older People
Scottish Government Contact point: Paul Curt is Social Security Directorate [email protected]