Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc) Order 2014 [draft]
Under item 2, the committee will take evidence from the Deputy First Minister on the draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc) Order 2014.
The order has been laid under the affirmative procedure, which means that the Parliament must approve the draft before the provisions may come into force. The order is also subject to the affirmative procedure in both houses of the United Kingdom Parliament.
Following the evidence session with the Deputy First Minister, the committee will be invited to consider the motion to recommend approval of the order under item 3, which is the formal debate on the order. The officials who are accompanying the Deputy First Minister will be unable to speak to the committee at that point.
I welcome to the meeting the Deputy First Minister, Nicola Sturgeon. She is joined by Owen Griffiths, policy officer, Scottish Government housing support and homelessness unit, and Jackie Pantony—I hope that I said that right—principal legal officer, Scottish Government legal directorate.
I give the Deputy First Minister the opportunity to make a brief opening statement.
Thanks, convener.
I thank the committee for its assistance in applying pressure on the Department for Work and Pensions in respect of the cap on discretionary housing payments and for agreeing to consider the section 63 order so quickly. I certainly hope that we can see the order complete its stages in the Scottish Parliament swiftly so that we have ensured that we have played our part in having it agreed to timeously.
It is also appropriate for me to record my thanks to the Scotland Office and to David Mundell in particular for their assistance and co-operation in ensuring that we are working to an ambitious timetable that is designed to ensure that the transfer of power takes effect and the subsequent order that the Scottish Government requires to lay can take effect in this financial year.
The section 63 order transfers the power that is found in section 70(3)(a) of the Child Support, Pensions and Social Security Act 2000 to set the cap on the amount that local authorities can spend on DHP in a financial year. The committee is well aware of the history of the order. The Scottish ministers have previously explained that we believe that DHP is the best way of mitigating the bedroom tax, because it is the only way of making regular, on-going payments directly to tenants who are affected by the bedroom tax.
As the committee is aware, the Scottish Government initially asked the DWP to lift the cap for Scotland. That move would have required a simple negative instrument in Westminster. The UK Government decided to transfer the power to the Scottish Government to allow us to lift the cap. Although that is not the process that we initially recommended, we nevertheless welcome it. The process will place the power to lift or vary the cap in the hands of the Scottish ministers. Only that order-making power is being transferred via the section 63 order; no further powers will pass to the Scottish Government in respect of DHP.
The Scotland Office has agreed to the timetable, which I know has been shared with the committee. The aim of the timetable is for the order to be made at the November meeting of the Privy Council. At this time, everything is on schedule from the perspective of both the Scottish Government and the Scotland Office.
I am keen to hear the views of the committee and to answer any questions, of course.
Do members have questions?
Before we all agreed on the route that we are taking by lifting the cap on discretionary housing payments, some people—including me—suggested during the discussion that took place before that decision was made that other routes may have produced greater flexibility and that, by choosing to direct all the resource available through discretionary housing payments, we may make it difficult to get the breadth of cover that the money could achieve. In your view, are there any areas where taking the DHP route limits your capacity to act in other ways?
Obviously, there are eligibility criteria for DHP, and the policy direction continues to be set by Westminster. Therefore, somebody who is in receipt of DHP has to be in receipt of housing benefit. It has always been and continues to be my view that DHP is the best way of mitigating the bedroom tax. As I have set out today and previously, that is because it is the only way in which the Scottish Government, via local authorities, can get directly into the hands of individuals regular and on-going payments that effectively compensate them for the amount of housing benefit that they are losing as a result of the bedroom tax. Within the powers that we currently have, there is no other way in which we could do that.
I am perfectly comfortable that that method allows us to do what we have set out the intention to do, which is to take away the impact of the bedroom tax. It will not surprise you to hear that I wish that we could just abolish the bedroom tax rather than have to mitigate it, but in the absence of the power to do that, I have not a shadow of doubt in my mind that mitigating the bedroom tax by using DHP is the best way of proceeding.
The subordinate legislation before us is an affirmative instrument, but the actual measure that you are going to introduce—the power to lift the cap—will be a negative instrument. Why is one affirmative and the other negative?
If Westminster had decided to lift the cap, that would have been done with a negative instrument—that is the current way of varying the cap. The instrument before the committee is an affirmative instrument because it involves the formal transfer of the power to vary the cap. However, I think that it is appropriate to stick to the method that would have been used by Westminster, under which the Scottish Government would have two options: we could change the cap from its present level to raise it to a higher level; or we could remove the cap altogether. Our intention is to remove the cap altogether.
There have been reports about how some local authorities are using the DHP money that is given to them. For example, Falkirk Council has suspended DHP for some groups of people who are unaffected by the bedroom tax. I know that you have said that that should not happen, but I raise the issue because I have a constituent who has been denied a payment. He fears that that has been done because payments have been displaced by the focus on the bedroom tax. You do not want that to happen, but is there anything that you can do to ensure that it does not happen?
The responsibility for administering discretionary housing payments lies with local authorities. I made the point earlier that we are getting only the power to vary the cap, not the power to change any of the policy context of DHP. Two issues to do with local authorities have arisen, and I will touch on both of them—I think that you have touched on the second of those in particular.
Local authorities were obviously concerned that, until the cap is formally lifted, which will not happen until later in this financial year, they might run into legal difficulties if they got to the point at which they had to breach the cap. I think that we have managed to give local authorities assurance and comfort on that through the joint letter that has been issued by the UK and Scottish Governments. I have been very clear that local authorities should plan on the basis of spending up to the limit of the money that they have available.
I have been equally clear—I put it on the record again today—that the money that the Scottish Government is providing for discretionary housing payments is expressly intended to mitigate the bedroom tax. That means that anybody affected by the bedroom tax who applies for a discretionary housing payment should get that payment without any other means testing being applied.
You asked whether, given the focus on mitigating the bedroom tax through DHP, other uses are being constrained or curtailed. I should say at the outset that, although I know that money is tight in local authorities, once we lift the cap there will be nothing to prevent local authorities from adding more to discretionary housing payments from within their own resources, if they so choose.
However, even within the amount that has been allocated so far, local authorities have a ballpark figure of £50 million this year—£35 million from the Scottish Government and £15 million from the UK Government—and our current estimate of the cost of mitigating the bedroom tax is in the region of £40 million. Therefore, additional resources are available through discretionary housing payments for other purposes.
The £15 million from the UK Government is split into a core amount and amounts for the bedroom tax, the bedroom tax in rural areas, the benefit cap and the local housing allowance.
We take the view that the bedroom tax can be mitigated within that £50 million without touching any of the resource for non-bedroom-tax purposes. Resources are in place to deal with other claims in relation to discretionary housing payments. Of course, it is down to individual local authorities to assess those claims in the normal way.
That is very helpful and in line with my understanding of the Scottish Government’s position on the matter.
Are you monitoring to see whether there is any evidence that the tax is having a displacement effect and that some discretionary housing payments that would normally be expected are not being made? Are you actively intervening in any way?
We are monitoring the use of discretionary housing payments and we will continue to do so. We will continue to discuss with councils their practical experience of the situation.
I have said openly that, with the best will in the world, the Scottish Government cannot, through discretionary housing payments or any other means, compensate for the full impact of benefit cuts, which are taking £6 billion out of the Scottish economy. We are doing as much as we can—indeed, everything that we reasonably can—and we will continue to look at the issues with an open mind.
However, nobody should be under the illusion that somehow we have a bottomless pit of money from which to put back all the money that the UK Government is taking out of people’s pockets. The only way for us to be able to stop the full impact of the cuts is to have the power to stop those changes at source.
The Scottish Government, the Westminster Government and local authorities have made money available to help with the impact of the welfare cuts, but it has not all been taken up. I was reading some analysis of the situation, which noted that the amount of money that was made available in rural areas may have been overestimated. What are your thoughts on why there has not been full take-up of that money? Is it because there is a very hard-to-reach group out there? Is it because there is an overallowance for rural areas? Are there any other explanations?
With regard to the initial allocation of money, we are right now in a situation in which 12 local authorities, even before the final tranche of money from the Scottish Government for DHPs has been allocated, are already funded adequately to fully mitigate the bedroom tax. In allocating the remainder of the money, which must be done in agreement with the Convention of Scottish Local Authorities, we need to get that money to the local authorities that need it.
The cap applies to individual local authorities as well as to the global sum of money, so we wanted the cap lifted not just so that we could increase the global sum but so that we could flex that money in terms of where it is getting to, in order to ensure that there are not overallocations in some areas and underallocations in others. That is what we hope to be able to do with the remaining tranche of money.
Without labouring the point—well, I will labour the point, because it is important—the bedroom tax has not been abolished. It is still in existence, and people still have a legal liability if they lose some housing benefit to meet the rent that is not covered by the benefit.
When I made my statement on the matter in Parliament, I was very clear—I think that you asked a question about this—that local authorities, housing associations and the Government have to get the message across that people have to apply for help.
You know as well as I do that the message is easier to get across to some groups than others. We still have an on-going job of work to do to ensure that people are aware of the help that is available.
I know that you are talking about discretionary housing payments and, in other aspects of our welfare mitigation work, such as the welfare fund, the underspends that we saw last year were, generally speaking, a feature of a new fund bedding in. I do not think that we will have too much difficulty getting that money out the door.
Those are issues that we have to keep at. We cannot just assume—particularly when we are talking about the bedroom tax—that everybody who is entitled to help will apply for it. Local authorities, housing associations and landlords have a particular responsibility to get that message across.
10:15
Thank you for that reply.
Can I ask another question on the same point, convener?
One more.
There is huge variation among local authorities in relation to the proportion of DHP funding spent. North Lanarkshire Council has spent more than 100 per cent, whereas Moray Council and Perth and Kinross Council have spent less than 30 per cent. That is quite a variation. I just want to understand the key reason behind that huge variation. It cannot just be about hard-to-reach people.
No. Some of it will be down to the differing impacts of the bedroom tax and an initial situation in which the allocation of the funding did not necessarily mirror where the greatest demand was, which is what we are trying to fix now with the flexibility of not having the cap. I repeat my earlier point: the cap had a double effect—or has a double effect, rather, because it is still in place—in that it limits what can be spent in a global sense but it also limits what can be spent in individual areas. Some local authorities, with their maximum allocation under the cap, still did not have enough to mitigate all the impact of the bedroom tax, whereas other local authorities perhaps had too much for that purpose, given the lesser demand for it. Getting rid of the cap helps us sort the allocation as well as ensure that there is enough money overall.
My question is not so much about the policy objective of the order, which I think the whole committee agrees with. We will find out in a minute. It is more a procedural question about the role of the Westminster Parliament after we, as I presume we will, agree the instrument today. How does the process work, exactly? What is the timescale and what is the procedure? Do both houses of the Westminster Parliament have to consider the instrument? Are we expecting a straightforward process?
I hope so, but obviously that part of the process is not entirely within my control. The order is expected to pass through both the House of Commons and the House of Lords in October. The relevant House of Commons committee is scheduled to meet on 14 October and the House of Lords grand committee is scheduled to meet on 23 October. It is anticipated that there will be a motion to approve the order in the House of Lords on 27 October. All that is on track at the moment, but as you would expect we continue to monitor progress and to contribute where we can in order to ensure that the process remains on track. Responsibility for the Westminster side of the process obviously lies with the Scotland Office. David Mundell and I are in contact when we need to be to ensure that the process keeps going at pace.
I presume that the timescale is contingent on this Parliament dealing with our side of it on time as well.
Indeed.
I have one final quick question about the procedure. I think there was a bit of frustration—I am sure that you were frustrated as well—at the delay because you had to wait for the Privy Council to produce the order. Is its role now finished? The order will not go back to the Privy Council, will it?
Yes. The Privy Council has to approve the order. Assuming that everything stays on track, the expectation is that that will happen at the November meeting of the Privy Council. The fallback is that it could happen in December, but the preference is for it to happen at the November meeting.
Again, we are hoping that that is a straightforward process.
I am not familiar with the inner workings of the Privy Council, but I hope that it will be straightforward.
The committee is joined by Jackie Baillie, who will ask the next question.
Thank you, convener. Although the Deputy First Minister and I would probably argue over whether there are other ways of doing this, I very much welcome the fact that the order is before us today. The letter of comfort that has been signed by both Governments is also welcome. Is she aware that there is continuing reticence on the part of some local authorities to provide full DHP now?
There should not be reticence. If anybody wants to bring to me evidence of particular reticence in any local authorities, I will endeavour to discuss that with those local authorities. DHPs are their responsibility to administer. I do not have power of direction over local authorities in this, but there is no reason why local authorities should be reticent about mitigating the bedroom tax through DHPs.
Okay. That is very helpful. You mentioned the question of additional money being available because the estimate for the cost of the bedroom tax is now at £40 million. There are cases of people being threatened with eviction—one of them is a constituent of mine—in a local authority area that failed to spend the money fully last year. They are being threatened with eviction as a result of not quite non-payment, but an inability to afford the bedroom tax from last year. Given the additional available resources that you referred to, would you consider backdating payments in such circumstances?
To talk about additional resources is slightly misleading because—to go back to Ken Macintosh’s point—there are other calls on DHPs; people have recourse to DHPs for reasons other than the bedroom tax. Speaking on behalf of Scottish National Party councils, I say that SNP councils were always very clear that there would be no evictions of people who were trying to pay but could not because of the bedroom tax. I encourage all local authorities to take that position.
There were underspends of the money last year in some local authorities, and it is open to local authorities to backdate DHP support. However, that is a matter for them—I cannot instruct them to do that. I therefore encourage you to liaise and engage with the local authority in your area, which I believe you know well, on that or on any other particular case.
I have two local authorities in my area, Deputy First Minister.
I am interested in what you said about backdating. I take it that local authorities can backdate beyond one financial year. Also, it is not just about councils. The case that I mentioned involved a housing association because, of course, Argyll and Bute Council did a full stock transfer.
I do not know the details of the constituency case that you are referring to, obviously. I am pretty sure that you will pursue the case vigorously and rigorously in the best way that you can. There is discretion available to local authorities to backdate across financial years; that discretion rests with them. That is why I encourage you to discuss the matter with them.
On the basis of what you said earlier, I will not call it additional money, but there is money available in the budget because it is estimated now that the bedroom tax will cost £40 million rather than £50 million, as was previously thought. Would you encourage local authorities to use their discretion to backdate for people who are threatened with eviction as a consequence of the tax?
That would depend on the circumstances. The money in this financial year is there to mitigate the bedroom tax in this financial year. Local authorities have discretion, but they have to be mindful of the other calls on DHPs. I have every confidence that local authorities are perfectly able to exercise that judgment. If there are particular cases that merit that approach, I encourage local authorities to look at them sympathetically, but the decision rests with them.
I suppose what I am asking you is whether you would favour an approach that actually—
I am not going to sit here and endorse or encourage a blanket approach because I think that the approach should depend on particular circumstances. The money that we have made available to local authorities for this financial year is to mitigate the bedroom tax in this financial year.
So, on that basis, if the money is for mitigation in this financial year, you are ruling out—
I suspect that Jackie Baillie is deliberately trying not to understand what I am saying.
No, no. I am absolutely not doing that.
If people speak one at a time, we will get a clearer perspective.
I genuinely just want clarity on what you are saying, because there are people being threatened with eviction because of bedroom tax arrears for last year.
Let me try to explain it in simple terms, for the benefit of Jackie Baillie. Local authorities have the discretion to backdate support, and it is entirely up to them whether they choose to exercise that discretion in any individual case.
Thank you.
Good morning, Deputy First Minister. I want to raise two brief points. The first one—to go back to Ms Baillie’s comments on mitigation—is that, obviously, this is a policy area over which Westminster has control, and what our Scottish Government is doing is mitigating the harmful impacts of a Westminster policy.
That leads me to my second point, which is important. It is on something that you mentioned earlier. The order that we are discussing will not abolish the bedroom tax in Scotland but will, rather, mitigate its impact. That leads me to the point that it is surely this Parliament and not the Westminster Parliament that should have control over such matters and, further, that the only way to guarantee that this Parliament can control them is for people to vote yes on 18 September.
Yes. We will not be abolishing the bedroom tax through the order; we will be mitigating its effects. I do not want people to suffer as the result of an iniquitous policy that has been imposed by a Government that we did not vote for, but that is the position that we are in. I did not come into politics to mitigate the policies of Westminster Governments. I came into politics because I wanted to be able, with others, to take decisions that avoid bad policies and, I hope, implement good policies that make people’s lives better.
It beggars belief—it is beyond my comprehension—that politicians, particularly those who are of a different persuasion to the current Westminster Government, would be happy with mitigation when we could take the powers into our own hands and trust ourselves to use them better. However, I will leave those who are in that rather absurd position to explain it, because I cannot do it.
Thank you. It has to be said that some of those politicians did not bother to turn up to vote in the House of Commons when they could have done something about it, but there we go. That is not really a new thing.
It is important that the point is made that the order will not, sadly, abolish the bedroom tax because as we have heard we do not currently have the power to do that. I hope that we will have that power soon.
I do not know whether there was a question there, but we are going to have a debate on the issues, so maybe we can discuss the point then.
Deputy First Minister, I go back to your point that the DHP route is the only one that is available to address the problem. When the Minister for Housing and Welfare was before us, I asked her a question about discussions that were on-going with local authorities about their preferred options for disbursal of funds to support people who are affected by the bedroom tax. Audit Scotland had approved Renfrewshire Council’s means of doing that, and in my area North Lanarkshire Council was pursuing a route that is being used by some local authorities in England. The housing minister’s officials confirmed that discussions were taking place with North Lanarkshire Council about alternative ways of distributing the money. Have those discussions concluded? Are you going to continue discussing alternatives?
I am not aware that there is any appetite to discuss alternatives. There is no mystery here. When we did not have agreement from the United Kingdom Government either for it to raise the cap or for it to allow us to do that, we said that we would look at other options, but we have always been clear that, in our view, what we are doing is the best option. Unlike other options, it has the ability to get regular on-going payments directly to tenants, to avoid their getting into debt, which is an important part of this. We were prepared to consider other options, but what we are doing is the best way, and now that we have the power to do it in the best way, that is how we are opting to do it. That is absolutely the right thing to do.
Have you ruled out the other options? Are discussions about them continuing with local authorities?
We are routing the money that we have set aside to mitigate the bedroom tax through discretionary housing payments because it is the best option. I am not aware of better options. I do not see why we would have discussions to try to come up with second-best options when we are securing the power to distribute the money in the best way possible.
In the case that I am talking about, I was asked by officials from North Lanarkshire Council to ask that question of the housing minister. They believed that their preferred option, which required the approval of Scottish Government ministers, was better than the DHP option. Do they have discretion to use a different method, or are you saying that DHP is the only method that they can use?
Scottish Government financial support is going to discretionary housing payments. Councils have discretion to do a range of different things; I cannot direct them or stop them doing those things, but in terms of the money—
According to Audit Scotland, you can approve alternative methods.
I am happy to come back to you on the point, but I am not aware of any request for approval. The Scottish Government’s financial support to mitigate the bedroom tax is being routed through discretionary housing payments. If local authorities want to do other things in addition to that, we will always be prepared to discuss that and enter dialogue with them. I am not going to sit here and give guarantees or say where those discussions would end up, but discretionary housing payments are the best route, in our view, to mitigate the bedroom tax, which is why we are routing our financial support through them.
Okay. That appears to be the end of our questions, so we move on to agenda item 3, which is the formal debate on the order. We have scheduled 90 minutes for the debate, but I am not encouraging members to use that. I remind the committee and others that officials may not speak during the formal debate.
I invite the Deputy First Minister to speak to and move motion S4M-10739, in her name.
I move,
That the Welfare Reform Committee recommends that the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc) Order 2014 be approved.
Do members want to make any comments?
Members: No.
Motion agreed to.
That concludes that part of our business. I thank everyone for their contributions.
I will suspend the meeting for a couple of minutes as we have to change the seating arrangements.
10:31 Meeting suspended.