Audit Scotland: Plan needed to bridge benefits funding gap

In a new report published yesterday, Audit Scotland highlighted that the Adult Disability Payment (ADP) is the largest of the devolved benefits and the replacement for the UK’s Personal Independence Payments (PIP). Eligibility and payments for ADP and PIP are similar, but the ADP application and review processes are designed to be less onerous. Around 500,000 people now receive the benefit. Of those, over 318,000 have been transferred from PIP to ADP, and nearly 160,000 are new ADP applicants.

In 2023/24, the Scottish Government spent £2.6 billion on ADP - £141 million more than the funding available to it through the UK block grant. According to Audit Scotland, the Scottish Government has not set out how it will manage this ADP funding gap, which is forecast to grow to £770m by 2029/30. Ministers also lack a clear strategy to manage any impact on the Scottish budget from UK decisions in devolved areas, such as PIP, the report added.

Audit Scotland said the Scottish Government’s approach to ADP has created additional costs, but it described performance data as “limited”. The report warned that it is difficult to see which parts of the ADP application and review process make the biggest difference to people, and how much they cost. The government’s understanding of how ADP helps improve disabled people’s lives is also underdeveloped, it added. Without all this information, the report suggests that ministers will find it difficult to decide how best to allocate spending to ensure value for money.

Stephen Boyle, Auditor General for Scotland, said: “Adult Disability Payment is a lifeline for thousands of people in Scotland. It is also the clearest example of how the Scottish Government’s commitment to making the social security process less onerous has come at a cost.

“Given that the gap between available funding and ADP spending is forecast to grow significantly, the Scottish Government needs to set out how the gap will be managed over the medium-term, and how this will impact on the lives of disabled people.

“To ensure money is well spent, ministers need to be much clearer on what parts of the ADP application and review process are making the biggest difference to disabled people, and what the costs are compared to PIP.”