Social Justice and Social Security Committee

Meeting date: Thursday, September 21, 2023

Official Report 636KB pdf

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Pre-Budget Scrutiny 2024-25

Welcome back. Our next item is an evidence session as part of our pre-budget scrutiny. I refer members to papers 3 and 4. We will discuss budget priorities in general terms and explore the context for decision making on the Scottish budget.

I welcome Chris Birt, deputy director for Scotland at the Joseph Rowntree Foundation; Emma Congreve, deputy director and senior knowledge exchange fellow at the Fraser of Allander Institute; Dr Alison Hosie, researcher at the Scottish Human Rights Commission; and Bill Scott, chair of the Poverty and Inequality Commission. Thank you for joining us.

We move to questions, the first of which comes from me. In what ways should the impact of the cost of living crisis influence the Scottish Government’s budget decisions? I put that question to Emma Congreve, to begin with.

Thank you for inviting us here today. With regard to how the current cost of living crisis should impact on budget decisions, our approach is around ensuring that a process is in place to understand the Government’s priorities and how the cost of living crisis has impacted on priority groups. The most obvious example is child poverty, given that we have the child poverty targets and the many affirmations of how important that is to the new First Minister and others in the Cabinet. We are looking for a clear articulation of that through the announcements, with supporting analysis that shows why decisions have been taken and why more money has been put into some areas—that could be additional cost of living payments or increases to benefits—as well as an explanation of what impact the Government expects that to have on the people whom it is trying to target. That is a really key priority for us during the budget process. Given that there are such challenges in the fiscal outlook, there has to be a really clear approach to justifying and prioritising spend, be that for cost of living payments or any other new policies that come through the budget.

The flipside of that is where money needs to be moved around in the budget. Some money may need to be taken out of some areas. It is understandable that the Government may need to do that at this time because of the pressure on finances. However, again, we need to have a clear articulation and understanding of what the impact of that will be, in order to ensure that there are no unintended consequences for those priority groups on which the Government needs to focus.

Thank you very much, Emma. Would anyone else like to come in?

Thank you, convener and members. During the past year, the Poverty and Inequality Commission and our experts by experience panel, which is made up of people with lived experience of poverty, have visited local front-line organisations that work directly with people in poverty. We visited 20 organisations across 10 local authority areas—everywhere from Shetland down to the Borders. We heard from them that they have never been under so much pressure. There is demand particularly for advice services, food co-ops and anywhere that people can get help with the cost of living and the way that it is impacting on them.

10:00  

One of the things to emphasise is that the cost of living crisis is not over for those on the lowest incomes—far from it. Energy prices are still nearly twice as high as they were two years ago, but the amount of help from the UK Government is far less than it was last winter. Those families face an extremely difficult winter, and the front-line services on which they rely, which are often provided by the third sector, are under huge pressure. To quote a front-line advice co-ordinator:

“Never before have we had this volume of people who have felt that there is no way out.”

Some of the people who phone up or go to those organisations are suicidal with worry about what they face and about being unable to pay bills, put food on the table for their children or keep their home warm.

We need to see in the budget exactly what Emma Congreve talked about: the prioritisation of help for those families who need it most and, if needed, the reprioritisation of money for that to be done. The Government needs to set out why that is being done, where the money is being moved from and to, and what the consequences of that might be, because we know that it will have impacts on other services.

The programme for government was relatively quiet on what other support might be forthcoming. That is why we are looking to see how exactly the prioritisation of child poverty reduction will be addressed in the budget. Some very welcome announcements have been made in the programme for government about raising disability benefits and the Scottish child payment in line with inflation, but we need to see more, and some of that will have to be crisis management for those families. The Scottish child payment has been a lifeline for many of those families, but there are other groups of people outwith some of the priorities for the commission who have not received as much support. Young single people, young couples without children, disabled people and older people have been left out of the help, to an extent, because it has been concentrated on families with children. Some of those individuals and couples are in real difficulty and they need help as well.

Good morning, panel. I want to follow on from that exchange on prioritisation in the budget. At last week’s committee meeting, Neil Gray said that the parental transition fund could not be delivered as intended, so the £15 million that was earmarked for that fund has been redirected to the fuel insecurity fund. What does that reprioritisation say about the Government’s priorities? Is that the direction of travel that we want to see? I ask Chris Birt to respond first, if possible.

That decision gives me two worries. First, the parental transition fund and the extension of employability services that were announced in “Best Start, Bright Futures” have apparently been canned. In that delivery plan, supporting parents into employment was seen as a good medium to long-term goal to help to drive down levels of child poverty. We would agree with that and encourage it, so it is deeply concerning to see those two areas being put to the side by the Scottish Government.

We have heard warm words about the remaining part of the Government’s priorities. That is as it should be, but it strikes me that the Government is a wee bit stuck in this space. It keeps asking organisations such as ours where the solutions are, but those solutions have now been binned. There should be no suggestion that tackling fuel insecurity is not a priority. Going back to the convener’s first question, I note that, as Bill Scott rightly highlighted, the cost of living crisis is not over. In fact, it is raging. I therefore have no problem whatsoever with additional funds being put into the fuel insecurity fund. However, do we need to look at those things as two competing priorities? I would say not.

Secondly, I have a more general worry that does not apply only to the Scottish Government. There appears to have been an impassable divide between reserved and devolved powers. The Scottish Government has approached the UK Government about a particular thing, and the UK Government has said, “This will impact on people’s ability to access reserved benefits.” That may well be true, but we have a fiscal framework for dealing with how devolved areas will impact on reserved areas.

I know that they were talking about doing things through local government payments, so maybe that could happen. However, it strikes me that we cannot have a situation in which the line between reserved and devolved areas means that Governments are unable to make decisions on behalf of people who desperately need support, such as parents for whom we believe there is a sustainable route out of poverty and into employment. We cannot have Governments being unable to make decisions on behalf of those people in an effective way. Those are my two main worries.

Dr Hosie wants to comment, and I saw Emma Congreve nodding. I am keen to understand your views on the prioritisation. Following on from Chris Birt’s point about whether the challenges are surmountable, I would also like to know whether we can do more in the reserved/devolved space.

Thank you for the invitation to speak to the committee today. On the point about prioritisation, I note that we are about to introduce the human rights bill, and one aspect that comes with that is about looking at and meeting minimum essential needs. It provides a framework for looking at how we prioritise. In the current cost of living crisis, it is important that we are flexible and that we constantly look at what we are prioritising, but it has to be done around that framework. We have to meet essential needs. That is not our starting point at the moment.

It is not the commission’s position to say that, in those decisions, X per cent more should be spent on this or that and, further down the line, that will not be the court’s decision, either. Our position is that what is being done in the area is not sufficient and we need to look to do more. In that regard, we have a commitment to maximise our available resources. We have to use our current resources efficiently and effectively, but we also have to commit to looking at all the alternatives, which includes looking at taxation and how we generate resources. There was nothing in the preparation questions for today about whether we generate enough resources or whether we are looking at taxation as another option, as well as prioritisation.

On prioritisation and the movement of funds, I agree with Chris Birt’s submission that this is the second year in which we have seen late movements of money when it has become clear that, for whatever reason, policies cannot be delivered as envisaged or other priorities have taken over. My concern is that policies are being put into budget documents and action plans without the work being put in to find out whether the things can actually be done. That relates to the point in my submission on how often we see money being allocated to funds without much detail being given at the time of the announcement on what the fund will do or the details underneath it.

I am not against funds being allocated?there are some very good funds out there?but the lack of detail means that an announcement can be made without all the workings being gone through, and that is a concern when policies cannot be delivered. It may look like something has been done but, in fact, nothing is happening at that moment—and sometimes, as we have seen, the policies cannot be followed through. In thinking ahead to the next budget, my main worry is that, if we have the same undetailed announcements about funds to do things, it will be hard to have a lot of confidence about what will be achieved.

We have seen the uncertainty about reserved and devolved benefits and the scope of powers in a number of areas over the past few years. There are a lot of grey areas in the implications if the Scottish Government was to go ahead with a policy that might infringe on reserved matters. That is concerning, although it is understandable, particularly around employability, employment and social security, where there are both reserved and devolved powers. That usually means that no one can say with full confidence exactly what will happen. The UK Government will not say whether it will try to rein money back, but there is always a threat of that, which slows down the policy-making process and makes lots of decisions harder to take with certainty.

We need a much better way of resolving those issues quickly with the UK Government so that the implications are understood up front and a proportionate view can be taken of what should happen as a result. We are not in that position at the moment, which is concerning.

I believe that Bill Scott wants to comment. We will then move on, because I am conscious of the time.

I have two quick points. First, I fully agree with everything that has been said, but particularly with Chris Birt’s point that a balanced approach is needed to tackle child poverty. We cannot rely totally on social security. Employability is also a key strand because, if we move people into well-paid work, they can escape poverty in the long term instead of dealing with being on a low income because they are unemployed or underemployed.

On the point about moving money from one pot to another, I agree that tackling fuel insecurity is very important at the moment, but so is employability. That solution was very much favoured by the people at the sharp end. The idea of a parental transition fund came from parents themselves, and abandoning it involves abandoning one of the solutions that they came up with.

A similar fund operates in Northern Ireland, which brings me back to the disagreement about how social security operates. Northern Ireland has almost complete control over its devolved benefits. We do not have that because of the overlaps with reserved benefits. We need to resolve that so that we can develop genuine solutions that will work. People know what support they need and they very much favour the aforementioned means of delivering that support, so it is a real shame that it has been dropped.

We need the Scottish Government to tell us how it has come to such decisions, because it is not clear to the commission how one thing is prioritised over another. What other options were considered and why were they then discounted? At the end of the day, it is important for people to know that when setting their budgets. We need to be able to look at the decision-making process and say, “The Government looked at whether this could be moved over there, but unfortunately it couldn’t be,” or whatever. We would then have a clearer understanding of why the Government felt that the money had to go into a fuel insecurity fund rather than into employability in another form.

We move to questions from Jeremy Balfour.

Good morning. We are looking at the coming budget, but we also have to look beyond it. The Scottish Fiscal Commission tells us that, by 2027-28, we are going to have a deficit of £1.3 billion. I will start by putting a question to Emma Congreve, and then other witnesses can jump in. Should we start to tackle that deficit now or should we just leave it and push it down the track? Moreover, if we should start tackling it now, how should we do that? You have two minutes. [Laughter.]

10:15  

Thank you. It would be very risky to push it down the road and hope that more beneficial economic news will come out down the track that will help to close some of the gap. The Scottish Government is very aware that it needs to be thinking carefully now about whether it has the right processes and contingencies in place. Obviously, there is no choice. The Government has to be able to close the gap and to know how it is going to do that.

The point for those of us who are outside Government and for the Parliament is that, as Bill Scott and I have mentioned, we need to understand how the decisions are arrived at. We fully expect that really difficult decisions will have to be made on how to close the gap. There may have to be a change in direction on some policies on things that are currently offered universally, and changes may need to be made to allocations to certain services. We expect that those decisions will need to be made.

The Fraser of Allander Institute does not have a view on what the rights or wrongs of this are. The point is more that we are keen for a transparent process to be in place to ensure that the pros and cons have been thought through and that it is clear to the country what decisions have been made and why. That is the best way to make the difficult decisions. If people, perhaps from better-off households, are to see a service being taken away from them, there has to be an understanding that that had to happen because the money needed to be better targeted. A long lead-in time is needed for people to understand the situation, rather than things being done at the last minute. We hope to see that kind of grown-up conversation being part of the process from the forthcoming budget onwards, in the light of the fiscal gap.

Transparency is critical to that. It helps to ensure that there is a fair process and that people can understand decisions even if they are not enjoyed.

We need to start by asking what we are trying to achieve. What outcomes do we want? How are we going to achieve them? How much will it cost? How do we generate the necessary resources? We need to start from that point and work backwards, and we need to be grown-up about the decisions that we will have to make. Going back to a point that I made earlier, I note that it is also about how we generate resources. That is part of the difficult discussion when we look at things such as the council tax or a wealth tax. There are areas where we are not doing enough, and they need to be explored.

I presume that, in broad terms, we take money from another budget, cut the social security budget or raise more revenue.

I do not know why you would include the social security budget as one of the binary choices in that. This is a debate that the whole Parliament needs to stand up to. If the deficit is in 2027-28, there will be an election between now and then, so every party in the Parliament, whether or not they are in government now, will have to face up to that. We face a debate as a Parliament and as a society.

There are lots of things that the Scottish Government spends money on now. Could public services be more efficient? Are there little budget lines that we could all quibble about? Definitely. Do most people in the Parliament think that we need a better social care system? Yes. Do most people in the Parliament think that we need a better childcare system? Yes. Do most people in the Parliament think that we need to support people’s mental health better? Yes.

There is a debate to have in Scotland—and, frankly, the same debate needs to happen in the United Kingdom—about the level of public services that people expect and how we contribute towards those. General taxation is one solution to that, but it does not need to be. We can look at contributions to different services, or there can be universal provision of a service, but different people will contribute to that in some way.

We need to get into those issues. There are pesky economists such as Emma Congreve who will pull me up on such things, but we spend an awful lot of money on treating the symptoms of poverty. For example, earlier this year, we did cost of living polling that showed that 30 per cent of the parents who reported a decline in their mental health because of the cost of living crisis said that that was because they were worrying about providing for their children. Families do not have enough money. If those families had enough money, we could bear down on the cost of the mental health support that those families need.

Ultimately, if we want to start to close those gaps, we need to have an honest debate about the level of provision that people expect. We need to significantly reduce poverty or we will drive demand into all those public services, which are already struggling.

We have got into a really unhealthy debate about whether social security is the right thing to be spending money on. Our social security system in the UK is currently fundamentally inadequate: people are hungry in this country because of it. The UK Government bears enormous responsibility for that. The Scottish Parliament has stepped into some of that space with things such as the Scottish child payment, and that is a good thing.

I very much echo what Chris Birt has just said. It has to be borne in mind that the statutory targets that exist for reducing child poverty were not set just by the Scottish Government; they were set unanimously by the Parliament. Every single party and every single member in the Parliament supported the child poverty reduction target. If we are to stand a realistic chance of meeting those targets, the Scottish Government will need to raise additional revenue, because there is no way that it can even meet its current service commitments with the budget that it has. Revenue will have to be raised. That is essential going forward. We want good public services.

Chris Birt made a point about the enormous cost of poverty to the national health service and to local authority support services. As non-economists, we are often asked what we would do differently. That is a question that is better asked of the Scottish Government. It has the resources to say what the impacts will be in terms of reprioritisation, which also needs to take place. Unfortunately, the commission is not best placed to say what a cut in the justice budget will do in terms of increased crime, for example. That is something for the Scottish Government to answer. Our expertise lies in saying, “These are the things that you need to do to reduce poverty. Unless you pay for those things, poverty will not be reduced.” That is what we would reflect back to you. We need to have a serious conversation about the level of taxation that is needed to provide good public services and to address the scourge of poverty in our society.

We have previously provided advice on reprioritisation to the Scottish Government. We have asked whether the Scottish attainment challenge fund would be better spent directly on reducing child poverty rather than indirectly, through allocations to individual schools for various things.

What about a look again at concessionary travel? I have had concessionary travel for seven years. To be honest, I do not need it, given my income levels. There are a lot of people working now who were not working before and do not need it. That money could be reprioritised to help low-income families to get to work. The costs of getting back and forward to work are one of the barriers that people face, particularly part-time workers, who can face £20 or £30 a week just on bus fares to get back and forward to their place of employment. Helping them with that is one of the things that might help them to move into work or to take on more work than they are currently doing.

We need to think hard about reprioritisation, but we also need to think hard about taxation. Local and wealth taxes have to be considered if we are to generate the income that we need for poverty reduction programmes.

I am sorry to labour the point, but we are really tight for time. I am really keen to hear from the panel and to allow members to put questions to it. We have until about 10:55.

I will endeavour to be as concise as possible.

I want to look at the Scottish Government’s policies and budgets, and the impact that they have had on reducing or—dare I say it?—stopping an increase in child poverty. I want to disaggregate those things into policies that are working and the budgets that are around those policies. They interact with each other, but they are not the same thing. Maybe a couple of the witnesses could put something on the record about the impact that the policies and budgets that the Scottish Government is directing towards tackling child poverty are having.

The Scottish child payment is working. It is significantly reducing child poverty. People will give you different numbers, but the figure is probably 4 or 5 per cent at the moment. We do not see that reflected in the numbers yet, because there are other factors that play in, but that will significantly reduce child poverty. That is a really good thing. Child poverty has been going up over the past few years; if that gets it going back down again, that is great.

The part of the budget that is a bit more worrying relates to housing. When Emma Congreve was at the Joseph Rowntree Foundation, she did an excellent report entitled “Poverty in Scotland 2019”, which looked into the effect that investment in social housing in Scotland has had in keeping poverty levels lower than we see elsewhere in the UK.

Those are two areas in which Scottish Government investment has made a significant difference.

Okay. Thank you. Mr Scott is making eye contact with me. I think that he wants to come in.

I echo Chris Birt on that point. The Scottish child payment has made a significant difference, and it will continue to make a significant difference. However, we cannot rely totally on social security to reduce poverty. That has to be emphasised.

That goes back to the employability question. There are questions that have to be asked about whether the employability spend is doing all that it should be doing to move people who are in genuine poverty into work or into better-paid work. We should continue to examine that. It is good spending, and it is good that we are trying to move people into well-paid work, but is that efficient? Are we getting value for the money that we are putting into those programmes in respect of reducing poverty? Those should be the questions. There is a lot of low-hanging fruit in respect of people who are already very close to the employment market and are moved back into work. Those are not the people who need that support. Sometimes it takes longer to work with people who face multiple barriers. We need to look at the programmes through that lens.

Housing is the other big issue. It makes a huge contribution to reducing poverty in Scotland, and we need to continue—

That is a point well made.

—to invest in social housing.

I hate to cut across you, Mr Scott, but the convener will have my guts for garters if I do not try to keep the questions moving. I apologise.

I have another question on this. We know that this is a challenge in the financial context. A change of approach has to be taken by the Scottish Government because we do not have the budget for every airt and pairt of the policy programme that would impact on child poverty. To give an example, one suggestion that I have made is that, if we cannot increase the Scottish child payment significantly above the £25 a week that we are already giving, and given that poverty does not impact uniformly across the year, could a summer supplement to the Scottish child payment make a difference to the lives of young people in families living in poverty? That is one idea. Is there another policy approach that you would like to recommend? You can throw that one out or you can support it, but are there other approaches that the Government could take, within a tight budget, that could have a direct and significant impact, hopefully relatively speedily?

10:30  

There are different ways in which you could structure benefits. It is the cumulative impact of quite a lot of different things that will make the difference to households, and the Scottish Government is getting better at modelling those things. You could start to look at, for example, different payments to go to different types of households or to those that are in severe poverty and destitution. Those are among the areas that you could look at if you want to increase the cost effectiveness of policies.

I will make a quick point on looking at what has had an impact over time. We still lack a lot of the robust evaluation evidence that would allow us to really assess the effectiveness of policies in areas such as childcare and employability. There is very little evidence that links that directly to child poverty, and we need that to be able to work out what to do next.

My question is for Emma Congreve. In your submission, in relation to child poverty, you state:

“we need to see much more focus on delivery of policies that have an evidenced route towards realising the targets, rather small allocations in different pockets which will not make a demonstrable difference.”

Will you explain in more detail how the Scottish Government should do this? Is there a danger that that approach might focus on policies that are easy to measure rather than on potentially more impactful policies that are difficult to measure?

I will answer that last question first. As I said in my previous answer, it is the cumulative impact of different policies that will have that overall impact of getting people with quite complex circumstances above the poverty line. The policies will not, on their own, get people over the poverty line, but you can model the contribution of different elements: a bit more on the council tax reduction scheme and the Scottish child payment, and a targeted childcare offer, for example. They are difficult to do, but it is about bringing together complex policies in order to understand their impact.

My issue with allocations of small packets of money is that none of that modelling has happened in those circumstances. The detail has not been worked through in order to examine how effective the money that is spent through the fund will be at getting people over the poverty line or at the cumulative effect that that will have along with all the other policies that are already in place.

Some funds are very good—the Scottish welfare fund is well directed. My issue is more to do with those types of funds in which £10 million goes here and £20 million goes there. That looks good on paper, but there is not always the follow-through that considers what the impacts will be. We should not do only things that are easy to measure, but we can be a lot better at measuring some of the things that we do.

Will you say more on the first part of the question, about focusing more on an “evidenced route”? What does that mean for the Scottish Government?

It means the Government expanding the approach that it took with “Best Start, Bright Futures” by doing the modelling exercise that it started and that the Fraser of Allander Institute also did in collaboration with the Poverty and Inequality Commission. It is about looking at cost effectiveness: the number of children brought out of poverty per £1 spent. You have to add all the policies into the pot. You have to look at different options and scenarios and do the options appraisal, which is built into the training of all Government economists, to find the best, most cost-effective route forward.

The time for that direct and focused exercise has come, because we are really close to having to meet the 2030-31 targets. Pilots and experimentation are great and give us lots of evidence, but we need to start spending money at scale if the targets are to be reached.

Thank you.

The next question is for Alison Hosie. Given the constrained fiscal framework, to what extent would you prioritise making further above-inflation increases to the Scottish child payment?

That question perhaps falls more into the realm of the economist sat to my right, Emma Congreve. However, from a rights perspective, the system requires and is built on inequality. Inequality and extreme poverty in society demonstrate the fact that we have human rights violations. Poverty is inherently linked to poor housing, poor health determinants and poor educational outcomes. All those aspects must be viewed as potential human rights violations; they are human rights issues. The Scottish Government has an obligation to deal with that. Again, I would challenge the approach of prioritisation at the expense of also looking at the difficult question of resource generation.

Poverty is multidimensional. To what degree does the evidence demonstrate that the Scottish child payment is sufficient as a route to adequately and effectively tackle and dramatically reduce poverty? As colleagues have said, there is evidence that it has had an impact, but is it the silver bullet? That is, for me, where the lack of evidence about other approaches comes in. We need more information. We know that school meals, for example, are impacting on children. You could argue that more nutritious school meals could have even more impact. We know about the impact of the quality of school provision, of the availability of school materials and of learning support in schools. There are lots of aspects, and they all need to be measured coherently.

I cannot give you an answer on the impact of just increasing the amount of payment without also addressing all the other issues. I need to see more of the evidence, as Emma Congreve described it, from looking at all the different ways and what will contribute to the outcome that we want.

Providing direct payments is known to be one of the most dignified ways of providing support, but, in and of itself, that will not solve child poverty, because the structural deficits in children’s lives are much deeper and wider than can be solved by just financial support. Chris Birt mentioned the state of public services. After 15 years of austerity, they are no longer able to provide the support to deal with those wider inequalities. All of that is important.

Thanks very much.

Good morning to the witnesses, and thanks for your time. The programme for government committed to inflation-linked uprating for some benefits and referred to

“increasing the Scottish Child Payment, Funeral Support Payment and all disability and carers benefits in line with inflation.”

Do you expect all devolved social security benefits to be uprated in line with inflation? For completeness, do you expect the UK Government to uprate all reserved social security benefits in line with inflation? I put that question to Bill Scott.

Yes. The people who are living at the sharp end need, at the very least, an uprating of benefits in line with inflation. Actually, the adequacy of universal credit needs to be addressed right now, because, when the £20 uplift that was made during the pandemic was removed, that plunged many families back into deep poverty. As JRF research shows, the numbers and the proportion of children living in households in deep poverty now, where they cannot afford essentials, is growing. Universal credit should at least enable people to have those essentials, such as food, energy and a roof over your head. If it is not doing that, it is failing to provide the security that social security is supposed to provide.

Thanks, Bill.

In the interests of time, I will move on to my next question. Chris Birt, in your written submission, in relation to disability benefit, you say that it

“will clearly have a significant impact on the Scottish Government’s budget if the UK Government fail to commit to a real terms uplift in these payments.”

Will you expand on how that impact will be significant?

Bill Scott set it out. Members of the UK Government were talking yesterday about how they did not want to bankrupt ordinary families: they are already making them hungry through the inadequacy of the social security system.

As Bill has said, our analysis from earlier this year showed that poverty has deepened in the UK since the turn of the millennium. One of the groups worst impacted by that has been disabled people. We need to do a longer-term bit of work on the adequacy of disability assistance. That is supposed to cover the additional costs of disability. There is lots of evidence, at least anecdotally, that it is not doing that. From the budget perspective, it is the biggest line in Scottish social security funding now. If the UK Government fails to uprate in real terms, that will cause a big problem for the Scottish Government, because it is already spending more per head than the UK Government on those payments. I hope that the UK Government will do the right thing, which it should, and the Scottish Government then needs to follow suit.

Thanks, Chris.

Finally, in “Equality, opportunity, community: New leadership—A fresh start”, the First Minister stated that the Scottish Government would have to

“target every pound we spend and invest in order to get the maximum value, ensuring it reaches those that need it the most.”

How should the Scottish Government determine who needs it most? I will put that question to Chris Birt.

As I have said, we rightly focus on child poverty because we know the trauma that that can cause in young people’s lives and that then plays out throughout their life. However, if you look at, say, the people who are having to rely on food banks, it is often working-age single people and, again, disabled people.

Emma Congreve and Dr Hosie have put this more eloquently already: we need to have much better insight into the decisions that we could make, which families would benefit most and whom we will prioritise in the immediate term, and to take it from there. Sadly, there is no right answer. There is no silver bullet, but there is a heck of a lot more that we could do.

I certainly wish that there was, Chris. Does anyone else want to come in before I hand back to the convener? [Interruption.]

Dr Hosie would like to come in. Sorry, Bill, she beat you to it.

It is a tricky question, but, when we ask who needs it most, we should be aware that different categories of vulnerability can come from your lack of access to a right or service. It is not a natural condition of the individual but a condition that you are being subjected to because of a particular situation. You could be vulnerable because you are homeless or because you lack access to food, housing or education. The lack of access to a right puts you in a place of vulnerability. That is one aspect, and we need to understand who those people are so that services can be better targeted.

The second part of that is that people can be vulnerable because of the conditions that they are in. We know that, for example, people who are in care, those deprived of their liberty and women and children who are fleeing domestic violence are all vulnerable because of their circumstances. I go back to evidence: we need more evidence about who those people are. The people who are vulnerable will change over time. There will be some consistency, but there will also be changes. With the cost of living crisis, more and more people are finding themselves in positions of vulnerability, so we need more evidence.

We also need to listen. We have an incredibly strong civic society in Scotland. It is shouting from the rooftops about who is vulnerable and in need of more support. We need to look at the many submissions that your committee and the Government receive telling us that over and again, so that we can help to inform that evidence base.

With many of the decisions that are made with regard to budgetary allocations, it is difficult to disagree, because there are merits with decisions left, right and centre. However, we need a framework for that decision making. To understand who needs support most, we need to have an adequate way of looking at that, which means, as I said before, looking at the minimum core, defining and measuring it, and seeing who is and who is not receiving that minimum level of service provision.

Okay. Thank you, Dr Hosie. I will quickly bring in Bill Scott.

10:45  

It would be remiss of me not to mention the six priority groups of families: lone-parent families; families with a disabled adult or child; larger families, who are those with three or more children; minority ethnic families; families with children aged under one; and families with a mother under the age of 25. Some 90 per cent of all children living in poverty are to be found in one of those families. Therefore, there is a way of prioritising who needs the help most when it comes to child poverty.

However, I echo Chris Birt in saying that some of the people who are suffering the worst impacts of deep poverty just now are young single people and disabled people. They also need to be prioritised to protect those who, at the moment, face not just the choice between heating and eating but difficulty in continuing to live. That is what the calls to helplines are telling us.

We have skirted around this issue already, but I would like to put a bit more detail on it. My question is for Bill Scott, and also for Emma Congreve, if you would not mind making just a wee comment.

In your submission, Bill, you say, on raising revenue, that in addition to prioritising spend, the Scottish Government will need to “raise additional revenue” to make full use of its devolved tax powers. Can you explain your views on how the Government does not currently utilise its tax powers and tell us what your tax working group is considering?

I put it to you that there is a tax structure that could be used and that changing to that structure would be within devolved tax powers. I am interested in whether you think that that is worth looking at.

There is a little bit of a mix there, but I would be grateful, Bill and Emma, if you could come back on that.

At the end of last year, the commission established a tax working group made up of members of the commission, experts outwith the commission and members of our experts by experience panel. We called in expert Government witnesses, tax experts from the private and public sectors, et cetera, and we took evidence from them throughout the year to try to come up with some recommendations for the Government of where additional revenue might be secured to feed into child poverty reduction programmes.

We are nearing the end of that process. We will publish next month, but I am able to convey some of the general thoughts and findings of the tax working group. We started by looking at how effective the current arrangements are and whether they are progressive. Our conclusion is that, largely, the Scottish Government’s tax policies are progressive and are making a difference, because the additional revenue that is being raised and the spending choices that have been made have tended to benefit lower-income households. They are therefore redistributive.

There is scope for more, however, and much more needs to be done. The fiscal sustainability challenge has already been pointed out, and the scale of the ambition to reduce child poverty demands that more resources be put into child poverty reduction programmes in order for them to stand any realistic chance of meeting that ambition by 2030. In broad terms, there is limited further scope for tinkering or making small adjustments to things such as council tax bands. The scale of the challenge is much bigger than that.

You are absolutely right that we need to look not just at tweaks to the current system but at a redesign for the short and longer term. Part of that will relate to local taxation, because that is one of the areas in which it is easiest to make changes. We need to get those changes right for the medium and longer terms—a quick fix is not the way in which to go about it.

We favour a revaluation of properties, because none has been carried out since 1991. If we were to go ahead and make changes to local taxation, some people who should pay more would not do so, because we have not revalued, and some people who should not pay more would do so, because of how their properties were valued at that time. Revaluation therefore needs to be carried out urgently so that we can have a proper basis for looking at local taxation in the round and for making plans for the medium and longer terms, to raise proper levels of funding from local taxation in order to meet local service demand.

We also need to see some devolution of further powers, through agreement with the UK Government, focusing on powers that are complementary to those that we already have.

Thank you, Bill. I am sorry to cut in, but I am really interested in hearing what Emma Congreve has to say. I have got the gist of what you are saying, but, if I do not have a chance to hear Emma, we will have to move on.

Could I add something very quickly? We favour devolving powers over savings and dividend income, so that we can close off one of the ways in which people can avoid paying income tax on earnings, which is by putting money into a company rather than paying themselves a salary. I will let Emma come in.

I will not add much. We are involved in the tax advisory group that the Scottish Government set up to look at some of those things.

I will touch on one point. We have talked a lot today about evidence and how we need a lot more of it. One area in which there is a lot of evidence is council tax and the choices that can be made to make it more progressive. That cannot be done without a revaluation, because not having one starts to undermine the whole purpose of the system. We very much echo that that needs to be done.

We will move on. I invite James Dornan, who has joined us remotely, to ask questions. Again, I say that we are really tight for time, so please be as concise as possible.

That’s me told. Thank you, convener.

The committee recently received evidence that highlighted concerns about the transparency of the budget. Have any improvements in transparency been made? What more needs to be improved in the budget process? I will start with Emma Congreve.

Yes, some improvements have been made over time. A number of us are involved in the equality and human rights budget advisory group. A lot of the recommendations that we have made through that group on how to improve the equality and fairer Scotland budget statement and make it more useful have been taken on board. I also mentioned in my submission that we are aware that more is being done to look at modelling and presenting the distributional impact of tax, social security and spend. We look forward to seeing the results of that—hopefully in this budget, and certainly in the future.

There is more that can be done. I refer members to comments made by my colleagues at the Finance and Public Administration Committee for some technical details on that. We have spoken quite a lot about the presentation of data. It can be quite difficult to navigate through the budget documents and understand what is new spending and what is existing spending that is continuing or is simply being reannounced. We would really appreciate a much more concise budget document that concentrates on the new decisions that have been made for that financial year.

Do you think that that is a realistic plan, given the financial and time pressures involved in preparing the budget?

Yes, I do. A lot of the work for the budget is a year-long process. A lot of the decisions that come through in the budget documents will have been through a policy-making process, so a lot of the analyses can be done in advance. Of course, there are time pressures because the UK details for the Scottish budget come through only a few weeks in advance.

A lot of the issues that we have in relation to transparency could be addressed in advance so that, when the final decisions can be taken in the final few weeks, everything is ready to go. From our point of view, the issue is not those time pressures; it is the approach that is taken to writing and preparing the budget.

Okay. Thank you very much for that.

I have a question for Dr Hosie. The Scottish Human Rights Commission has made suggestions about how the committee could practically take a rights-based approach to budget scrutiny. Will you outline the main points that the committee should consider in taking that approach?

I will do, if I could first take the liberty of quickly adding to the response to the last question about transparency, because that is a key area of our work.

We are currently repeating the open budget survey of the Scottish budget. We did that process four years ago and we will publish our results in May of next year. In their draft form, those results show that some progress has been made on the transparency of the Scottish budget. For me, the positive point is that, this time around, the Scottish Government has committed to engaging with the process and to looking at our recommendations for improving the transparency of, participation in, and accountability of the budget. Last time, the Government did not engage with the process at all, so that shows that there is a willingness to engage and that fiscal transparency is being taken seriously.

On your question about taking a rights-based approach, you have seen my written evidence, in which I tried to set out not the whole framework but the three steps that can be taken on rights-based scrutiny. We look at the commitments that the Government has. We are signed up to a range of international treaties, some of which will be incorporated very soon through the human rights bill. We look at what lies within those rights, the contents of those rights, and the minimum obligations. We ask what it is that we are aspiring to progress over time in relation to rights realisation. What do the treaty bodies that periodically—every four to five years—critique the Government on its progress say we are doing well and what do they say we need to improve on? They highlight a range of areas across all the committees’ work. There is a lot of synergy in what they say, particularly on economic and social rights.

Earlier this year, we presented to the United Nations, and we highlighted a range of areas in which we need to see improvement, particularly in and around poverty and inequality. What is said back to us on what we need to do is a key source of information when it comes to what you need to challenge the Scottish Government on in terms of its human rights record.

It is then about considering the resources that are required to deliver on the commitments, before finally agreeing how the necessary resources will be generated. That goes back to the question of what it is that we are trying to achieve. What are we not doing well that we need to improve on? How do we achieve that? What resources are required, and how do we generate those resources?

We have talked a lot about child poverty. That is a key example. The United Nations Committee on the Rights of the Child reviewed Scotland’s record recently, and child poverty was, yet again, raised as a significant issue. You need to ask the Government what it is doing to reduce the legal duties that it has set itself on child poverty. What is it doing? What is it going to fundamentally change about the way that it is currently budgeting to tackle child poverty and to demonstrate that it will have an impact on that statutory duty? What evidence can it produce to demonstrate the active impact that those obligations have on budgetary decision making? It is about taking that evidence and applying it, with the questions that you ask of the Government.

There is quite a lot that I would like to come back on in normal circumstances, but, given the time restrictions and that I am scared of the convener, I will pass back to her.

Yes—that was the right choice. Thanks, James.

I will bring in Paul O’Kane for the last question.

I will return to the theme that I started with, or that we heard some responses on, which is the engagement of people with lived experience and the public in setting priorities. Bill Scott talked about some of the priorities perhaps being revised. How can we better hear what the public and people with lived experience have to tell us and prioritise their views on the budget?

It is fundamental to the commission’s priorities that people with lived experience of poverty not only are involved in commenting after decisions have been made, which is too late, but are involved right at the start in developing and designing solutions to the poverty that they face. The budget is one of the key areas in which they should be involved. There are real challenges in doing so. As we have said, some of the budget documents are still very opaque and it is difficult even for people with technical experience to understand and to pick out what is changing and what is not changing.

One of the things that we think the Scottish Government could do better is set out, where there are new areas of spend, why that is being done and what that is about. If there are reductions, why are they being made and what are the likely consequences? If the other areas are largely unchanged, we do not really need to hear so much about them, but we need to know where the changes are.

11:00  

The Parliament has a critical role in assisting the Scottish Government in that process. The Citizen Participation and Public Petitions Committee has issued a report on embedding public participation in the work of the Parliament. One of the things that you could do is look at how to involve people with lived experience in pre-budget scrutiny work. Again, what happens in the forthcoming budget is of fundamental importance to their lives. They should have some input into how the Scottish Government is prioritising spending.

May I stop you there, Bill? I am keen to hear from Chris as well.

I was just stopping there anyway. Thanks.

I appreciate that Chris has not come in for a while. Do you want to have your final say on that, Chris?

Bill Scott is right about the direct engagement of people with lived experience. I am sure that you all see in your constituencies and the areas that you represent that there are third sector organisations and local public sector staff who have deep knowledge of what is happening in their communities. Emma Congreve talked about evidence that is available for national decision making. That is a huge untapped resource that we have. Our politicians in the Scottish Parliament are often much better connected to their communities than is the case elsewhere. You will know better than I do that that is hard work. Speaking to third sector organisations that understand their communities better than anyone is another really fruitful way of getting insight that the Parliament can then use.

Thank you very much. That brings us to the end of our scrutiny session today. I thank the witnesses very much for joining us. We have discussed a wide-ranging and important topic, and I am sorry that we were so tight for time. I know that Roz McCall had a question about the concept of the wellbeing economy that she was not able to ask. If the witnesses want to put forward any written submissions after we leave here today, I would be happy to receive them.

Again, I thank the witnesses very much. We will now end the session.

11:02 Meeting continued in private until 11:32.