Basic Income – first steps in Scotland and where are we now?

The idea of Universal Basic Income (UBI) as a feasible and effective welfare system is gaining increasing traction worldwide. Mandy MacEwan, Policy Co-ordinator in Communities & Neighbourhoods at Fife Council, takes us through what is happening with regard to UBI in local authorities in Scotland.

A Basic Income (Citizen’s Income, Citizen’s Basic Income or Universal Grant) is an unconditional, non-withdrawable income for every individual as a right of citizenship.” – Citizen’s Income Trust, 2017

A Universal Basic Income is described as the payment of a fixed sum of money to all citizens (slight variations may exist for pensioners and children) of a country that doesn’t change irrespective of the circumstances of that citizen. This means that irrespective of being an unemployed person, a low paid part-time worker, a middle income earner or a wealthy CEO, each would receive the same basic level of state support. In essence this would mean that every citizen would receive a regular (monthly or weekly) payment that would be paid directly into their bank account without fail. Any additional money that a person earns above the payment would be taxed with either a single flat rate or a series of scaled progressive bands.

In September 2017, Scottish Government announced in its Programme for Government that it would support local authority areas to explore a Citizen’s Basic Income (CBI) scheme by establishing a fund to help areas to develop their proposals further and establish suitable testing. The amount of funding offered is £250,000 over the two financial years 2018/19 and 2019/20. This complements funding already committed by local authority areas.

While plans are at an early stage, it has been agreed that four local authorities will explore the feasibility of a Scottish Basic Income Pilot. These authorities are City of Edinburgh Council, Fife Council, Glasgow City Council and North Ayrshire Council. The four areas are working collaboratively together to prepare and submit a joint bid to the Citizen’s Basic Income Feasibility Fund by 29 March 2018.

Across four local authorities there is a common interest in reducing poverty and tackling inequality, and the role that a basic income might play in this. We are interested in exploring the feasibility of undertaking local pilots of basic income in Scotland and are keen to work together along with NHS Scotland, Scottish Government and other partners to develop feasibility plans for a pilot.  We are also interested in comparing and contrasting models in different areas as well as sharing learning and evaluation.

Evaluation planning will be an integral part of the feasibility work. NHS Health Scotland will support the four local authorities to develop a common evaluation framework within which to assess the expected outcomes of local pilots of Basic Income in Scotland.

Scottish Government have offered support to model the tax and benefit impacts of pilot design options or different levels of a Basic Income on different subgroups of the population.  It is expected that the design phase of the project would take from 12 to 18 months.  It will be important for any pilot to have the necessary support in order to influence the future of national policy and the role of Department of Work and Pensions (DWP), HM Revenue and Customs (HMRC), HM Treasury and the NHS will be vital in the design and implementation of a Basic Income pilot.  The practicalities of undertaking a Basic Income pilot will also be explored, including how it might be funded, and how payments might be made.

The local authorities involved will produce a report for Scottish Government on the findings of the feasibility work by September 2019.  The learning from this preliminary work will be used to inform a decision about whether Scottish Government will support the implementation of local pilots of Basic Income.

Progression beyond the design phase is expected to take the form of a two or three-year pilot programme. The results of the first pilots will be used to inform national social and economic policy.