Scrapping the two-child benefit cap will cost the SNP Government nearly £200 million a year by the end of the decade, experts say. The Scottish Fiscal Commission said the policy comes with a £155 million price tag in 2026-27 before rising to £198 million in 2029-30.
Payments will be made for about 50,000 children in Scotland by 2030 and about 43,000 could benefit from the measure in 2026.
Finance Secretary Shona Robison announced the decision to mitigate the UK Government policy during her budget on December 4. But the policy will not kick in until 2026 – the year of the Holyrood election – with the Government saying it needs time to set up the system.
Around £3 million was allocated in the draft budget to begin setting up that system.
The cap, introduced by the Tories in 2017, prevents parents from claiming in and out-of-work benefits for more than two children, with some exemptions.
The SFC warned that the decision to mitigate the policy marked a further divergence between Holyrood’s block grant from the Treasury and the amount it spends on social security. In December, it was reported that the gap between social security spending and the block grant adjustment (BGA) would be £1.5 billion in 2026-27.
This will rise to £1.6 billion after the two-child cap mitigation is taken into account. However, the move has been warmly welcomed by anti-poverty groups such as Save the Children.
First Minister John Swinney has also said the mitigation will help lift thousands of Scottish children out of poverty. He has continued to urge Prime Minister Sir Keir Starmer to scrap the policy across the UK.
The Labour leader said that, while he was opposed to the measure, the UK Government could not afford to end it right now. Scottish Labour leader Anas Sarwar has also voiced his opposition to the policy.
On Tuesday, he said his party would abstain from the Scottish budget vote – but added that he could vote it through if it committed to ending the two-child cap this year. The Scottish Government has been approached for comment.
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