Welfare Reform Committee

Meeting date: Tuesday, November 13, 2012

Official Report 462KB pdf

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Social Fund

Agenda item 3 is on the successor arrangements for the social fund.

There are two elements to the committee’s consideration of this item, and I propose to address each in turn. The first element is on the arrangements that the Scottish Government and COSLA have agreed for the introduction of an interim scheme for the administration of the fund from April next year. The second is to ask any initial questions that we might have on the statutory instrument that will devolve responsibility for certain parts of the social fund. Looking at the first element, members will note the submissions that have been provided by the Scottish Government and COSLA.

Do any members of the panel want to make any introductory comments? No. In that case, I will open up the discussion to questions from colleagues.

I have come to this issue a little later than some of my colleagues—this is only my second meeting as a member of the committee—so I might be going over ground that has been covered before. However, I am interested in hearing about the decision to replace a system that was part grant and part crisis loans with a single system of grants. I appreciate that most, although not all, respondents to the consultation preferred such an arrangement, but I am interested in hearing about the thinking behind that.

There are two points to make in response to that.

The first point is on a matter of practicality. Under the current arrangements, the Department for Work and Pensions has the option of recovering the loans through the benefits system, whereas, certainly under the current devolution arrangements, that option would not be available to the Scottish Government. The administrative overheads involved in recovering what are in effect very small amounts of money—the average crisis loan for living expenses is around £52 or £55 per person—without the ability to deduct the money at source from social security benefits is very expensive. Therefore, our ministers took the decision that, from a practical point of view, we would not do that, certainly for the interim scheme.

A second broader point is that, given that we are dealing with vulnerable people on low income, it is questionable whether it would be a good thing to give them a loan when they find themselves in a crisis rather than a grant to help them out of that situation. That is the rationale behind the position that we have proposed.

Both those points make a great deal of sense, but I just wonder what impact that will have on the resource that is available. When we took evidence from the cabinet secretary, we had some discussion of the issue, and of course the Scottish Government has made additional funding available. The Scottish Government has provided a table that details previous expenditure on community care grants and crisis loans as well as the proposed funding for the interim scheme. However, one difference is that any money provided in crisis loans is, in theory at least, recyclable because the money will come back in. For example, the table suggests that £6.8 million was spent in crisis loans in 2011-12. Was that the expenditure figure, or was that the figure of what was made available to those who accessed crisis loans?

That is what was made available to those who accessed crisis loans.

So the figure may include money that came back by being repaid.

I am not quite sure how the DWP organises its finances, but in theory yes. However, my understanding is that, even for the DWP, the recovery rate for crisis loans is quite low. There is not a 100 per cent recovery rate.

Thank you.

I have a more general question. I know that everything has been very rushed, and I can see from the submissions from the Scottish Government and COSLA that a lot of work has gone on to meet the deadlines. What is your relationship with the DWP like on these issues?

At official level, we have a fairly constructive discussion and relationship with the DWP. We try to engage at three levels.

First, in the core team within the Scottish Government we have a relationship with the officials in the DWP at the centre, who are looking to localise—that is what they call it—welfare provision. Secondly, through my colleagues in COSLA, we have a working relationship with the DWP’s operational managers in Scotland. Thirdly, at the level of individual local authorities, we are encouraging closer partnership working with local DWP offices because we are conscious that, from the point of view of the applicants, there will be a need for dialogue between DWP benefits and the new successor arrangements.

We are conscious that there are three levels of engagements, and we are working to ensure that the relationship is constructive at all those levels.

I would echo that. Last week, I gave a presentation to the DWP Scotland team on welfare reform change and there were a lot of operational managers around the table. It was heartening to be able to make that presentation to them and to listen to the questions that they asked.

There was a lot of recognition around the table that the operational managers need to do a lot of work at local level to make things happen and that they cannot wash their hands and move away. They recognised the need to ensure that they get their stuff in place in a timely manner and communicate effectively with us both in rolling out the new arrangements and through the transition period and beyond.

What about at the next level? How ready do you think local authorities are?

As we said in our submission, the arrangements are being made within an enormously challenging timeline. However, I am certainly impressed by the ways in which local authorities are implementing the arrangements.

We have established a number of different forums at practitioner level to collaborate meaningfully and share the workload, to communicate good practice with one another, and to move things forward. It would be fair to say that different authorities are at different stages. COSLA and Scottish Government colleagues are trying to make sure that no one falls behind and that everyone at least gets good information.

There are democratic and other processes to go through within individual authorities. Some authorities are at the stage of formally determining where things are going to sit from a decision-making and back-office perspective, and some are still wrestling with that problem. Some have in mind how they are going to implement the arrangements but they still have to formalise the situation. We have a spread of readiness.

For the project at a national level, we have established a practitioners network meeting. It meets monthly and is so well attended that it is becoming difficult to manage, so we have to address that. We have established a knowledge hub with the Scottish Government and the Improvement Service, and we have populated it with a lot of library documentation to ensure that people have good information at their fingertips. Hearteningly, we are starting to see individual local authority representatives putting up their own reports, job descriptions, project plans, customer maps and so on, so that instead of things being done 32 times they can be done once and then shared. It will not be one size fits all by any means, but at least people will be able to use a template to move things forward. We are sharing the burden of implementation as much as we possibly can across the board.

You might only be able to respond to this point anecdotally. What level of engagement are local authorities having with their partners such as advice agencies, citizens advice bureaux and others who will be involved at the front line?

I have been to about a dozen local authorities in recent weeks. Some of them invited me to their local project boards, which were well attended by a cross section of sectors, such as the voluntary sector, health boards and the DWP, as well as individual departmental representatives who work on customer services, housing, homelessness, and revenues and benefits.

In the majority of cases, the authorities have been looking at verification and decision making in relation to the national scheme and eligibility criteria. There have been some very good examples, although some local authorities might not be quite there; they are still wrestling with processing and the staff and resources that they will need.

It is generally recognised that we are talking about not just processing a payment but joining up activities. If we are going to work better than currently—and practitioners firmly believe they can—we have to support accessibility to the scheme and be creative and innovative about delivery. Even if we say no to some applicants, they will still be our customers and we need to make sure that they receive the right package of support and advice at the very least. It might well be that the majority of people need to receive a rounded package of support.

Thank you.

My question has been partly answered. I was thinking about looking at things in the round. Mr Proudfoot said that there is no universality and—let us be honest—there never is in local government. How many councils are looking at aligning their teams with welfare rights and other advice services, and allowing contact with other agencies, and how many are looking at doing something different?

From my perspective, the ideal situation would be a one-stop shop for those services, so that folk would not have to keep coming back for a crisis loan and could be helped in other ways. That is the great hope, but we are probably about to see a situation in which huge numbers of folk are given benefit sanctions and have to rely more and more on crisis loans.

Can Mr Proudfoot and Mr Gupta tell me what local authorities are doing as part of the joined-up approach?

11:30

I will respond with regard to the longer term rather than the immediate situation, because there is a lot of discussion under way among the local authority associations throughout Britain and the DWP in that regard.

We have lobbied considerably to say that the additional pressures on communities, individuals and families that we are anticipating need to be sized up. Further discussion is needed on the establishment of proper face-to-face services—which are resourced through the DWP—as part of the burdens that are effectively transferring. It is only in the past two or three weeks that we have entered the territory in which task forces are being put together. Those involve the different local authority associations, some of those who are doing pilot work with universal credit delivery, and others.

Can I stop you there, Mr Gupta? You say that those task forces have been put together only in the past two or three weeks. Some folk outwith this room will think, “Why has that only just happened?” Can you explain why it has taken so long to get to that stage? Is it because of a lack of information from the DWP, or the fact that the amount of cash that local authorities are receiving from elsewhere in the Scottish Government has been known only very recently? Is it the DWP’s delay that has caused the task forces to be formed only very recently?

In my view, it is the fact that the DWP has taken a considerable amount of time to respond to the lobbying from local authority associations that has been on-going for quite some time. The DWP’s view now appears to be that it needs to move forward at some pace. We are involved in meetings that are intended to be held on a weekly cycle, which will be quite difficult for us to resource.

To pick up on what Douglas Proudfoot said, we are anxious to create a permissive environment in which discussions about the longer term and face-to-face services can take place. By that, I mean that we must recognise specifically the peculiarities and the strengths of delivery in Scotland, taking into account the community planning partnership arrangements and the fairly good relationships that we have with DWP district officers, among others.

To follow up on the earlier point, consistency is very important. We are talking about a particularly vulnerable group, and the customer journey is not vastly different between one authority and the next. The national guidance is very important in that respect.

During the consultation period in August, we heard from quite a few local authorities that were looking for more of a steer on how to enable that consistency to develop. The latest version of the draft guidance is more helpful in that respect, and we are working with the Scottish Government to form a decision maker’s toolkit. Its aim will be to give decision makers across all the authorities a flavour of how they can prioritise at a consistent level within the scheme’s confines.

It would be fair to say that, through all those forums that I mentioned, we are trying not to stifle innovation—we recognise that different things work in different areas—but to ensure that there is consistency. I know that I am talking about a contradiction, but we are trying to achieve the local delivery of consistent principles. Practitioners across local authorities have a fairly good grasp of that.

It may sound contradictory, but it makes sense to me.

I have a question on the second element of our consideration.

We have not got to that yet. We will deal with it separately.

The witnesses all identified the need for good connectivity between the different organisations. The changes will affect a number of organisations, such as citizens advice bureaux, carers organisations and issue-specific organisations. What training has been provided to those who will advise and signpost individuals who come for crisis loans to ensure that inquirers are pointed in the direction of the support?

That is one of our next big tasks. We are conscious that we are getting towards the end of the first full iteration of the guidance and that our next task is to work up with COSLA a fully scoped training programme that probably will be delivered in February next year.

We have agreed with COSLA and local authority representatives that a train-the-trainer approach is the best way of approaching the task. We will provide a centralised training scheme for the trainers—at least two people from each local authority—so that they can go back and deliver their own training.

We are putting together a list of topics or modules that we want to address during that training programme, and signposting is on the list. With COSLA and local authority representatives and through the welfare reform scrutiny group, we need to begin to define what that signposting might look like.

Separately, we are also doing some work with the Scottish Council for Voluntary Organisations to map the type of provision that is available for specific groups on a geographical basis. We hope that that work will fit into the broader scope of work that we will do with COSLA and individual local authorities in the training programme.

It is helpful to know that such work is happening.

I have spoken to a couple of organisations about their concerns. Sometimes, those are fears about what might happen, rather than examples of anything that has happened. However, it has been brought to my attention a couple of times that people are concerned that there might be cost shunting—I had never heard the phrase before, but it has become familiar to me; I see Mr Gupta nodding, so there is obviously something to that. There is a fear that people will consider the new fund that is being put in place to be an alternative to the existing provision of social services and will shunt individuals towards a crisis loan, rather than towards aids and adaptations, for example, or social service support.

As Mr Gupta nodded, I ask him to comment on that.

I should not nod.

From a global perspective, the cuts in the level of benefits will result in what we call cost shunting in three main areas: the crisis loans; the obligations on councils to provide funding through their social work functions; and the discretionary housing payments. In essence, as individuals’ budgets tighten up, they will become more vulnerable and might make greater use of existing arrangements, albeit that, in the case of the Scottish welfare fund, they are transferred to different providers.

Part and parcel of the concern is also that, as the DWP starts to try to withdraw from face-to-face services and work primarily with a computerised system, people will go to a variety of other organisations for the services that the DWP currently provides and, therefore, that element of current costs will simply be shunted over to different agencies.

We have heard how different organisations are preparing themselves for change. Without naming any organisations, I get the impression that different organisations might be in different places with their preparation and readiness. Local authorities are right up there as an example of a group that is genuinely ahead of the game, if that is possible in this process. Are you concerned about any of the organisations that might or might not have been named during this morning’s discussion, and whether they are advancing to where they need to be?

I have in my mind a fairly good idea of where local government is in general, across the piece. We are engaging with specific organisations for certain aspects of the guidance and the new arrangements as they come in. We are also engaging with other sectors in some of the additional supporting work that we are moving on with, such as helping decision makers to interpret the guidance consistently. We will work with Citizens Advice Scotland to identify scenarios and get it involved in the process of communications and roll out.

It is fair to say that a lot of different things are happening with different organisations in different authorities, and that is slightly beyond my reach, although I am aware of what is going on. If there is an opportunity to advise or bring people up to speed, we have offered that opportunity to all practitioners and we will try to facilitate that as much as possible, but the authorities are really the experts within their own areas.

I will explain myself a little more. When the committee takes evidence and talks to people about the welfare reform process, it is sometimes easy to see that some are on the front foot and some are still on the back foot. We are talking to you today, and you are very much on the front foot, but I am concerned that others are still worried or uncertain about how to deal with the process. Are you confident that all the organisations that we have discussed today are on the front foot and interacting appropriately?

It is quite difficult to answer that, partly because the welfare reform process, which is being steered by the DWP, is rolling out in a slightly unpredictable way. It is difficult to know how prepared people should be and for what. For example, the housing benefit changes are coming into play much sooner than the rest of the universal credit-related changes, which means that we will not be able to predict when people who might be anxious about how they will be affected by universal credit will seek advice and support.

We anticipate workloads developing from the point that the greater Manchester pathfinder comes on stream, but, in effect, that will cover only about 5,000 or so families, as far as I am aware. Presumably, people will then come to the advisory agencies and service deliverers in Scotland on the back of a probable high degree of public and media interest in what happens in Manchester.

There are unlikely to be immediate major effects until we get up to the start of the financial year 2014-15. There will be some roll-out from October 2013, but we understand that it will be quite limited in Scotland. I think that there are concerns, and we will want to use part of the time that we have available to develop some of the face-to-face services that will, of necessity, require us to work closely with other people who have an interest in the area but, at the moment, it is difficult to size the task.

11:45

We are conscious that the Scottish welfare fund is discrete and specific, and will start in Scotland from next April. We recognise that we will need to develop an appropriate communications strategy for the fund so that the individuals who might previously have gone to the DWP for a community care grant or a crisis loan will know to go to their own local authority for those things after April.

This Wednesday we are holding the first meeting of a sub-group that was set up with COSLA, local authority representatives and some of my colleagues in the Scottish Government’s communications teams. We will think about the messages that we need to send and the types of channels that we might use to ensure that the people who need to know about that change are fully up to speed by the beginning of April, when the new scheme will begin.

There will probably be a briefing note for MSPs and councillors. We are thinking through the different types and levels of information that we need to put out there, as we need to ensure that information is widely available in the public domain before April. Watch this space: it will probably be some time around the end of January, as we think that that may be the most appropriate time to ramp up some of the public communications regarding that change.

We have been talking about preparedness, but on a couple of important issues it is not yet clear where discussions are at present. One such issue is the distribution of the fund among local authorities.

That has been discussed at the joint settlement and distribution group with COSLA and the Scottish Government. It is proposed that the programme funding and the administration funding will be distributed on the basis of historical spend. We have fairly robust data from the DWP on spend at local authority level for the past two years, so we envisage distributing the funds initially on that basis, with a view to looking at a system that is more needs based in the longer term.

That is important, because the guidance mentions quite a bit the obligation on local authorities to budget across the year because the budget can and will run out. The guidance says that there is a review process, but that it does not apply where an application is refused on the ground that the budget has run out. Why is there no review if the decision is taken on that basis?

Dorothy Ogle might want to talk about that.

In producing the latest version of the guidance we have looked at that issue again because it was not clear exactly what was meant. The decision on making an award is made on a priority basis, so there is no right of review based on the level of priority that is set within that month.

At the beginning of each month the local authority will make a judgment for budgeting based on whether it can pay out on high priority, high and medium priority or high, medium and low priority. The guidance now states that there is not a right of review against that budgeting decision at the beginning of the month, but that there is a right of review of the level of priority that has been applied to someone’s application. If a local authority was paying out only on high-priority applications and someone’s application was judged to be medium priority, they could request a review of that, but they could not request a review of the local authority’s decision that it could not afford to pay out on anything more than high priority at that stage.

If there is new guidance, we may be able to look at that again.

The other issue on which clarity is missing is the second-tier review. The potential for social fund decisions to be reviewed by the commissioner has historically been very important. Have you made any progress on replacing that?

That is a very current piece of work, and we recognise completely the value that people place on the independent aspect of a second-tier review. The difficulty is that it has not been possible to find an organisation in Scotland that could carry out that work in addition to its existing duties. Setting up something bespoke was never really possible given the time, and it would have been extremely expensive.

We are talking about small-scale administrative awards of money. If we were to consider the issue from the perspective of never having had an independent review service, it is unlikely that we would put in place the independent review service as it exists. We are having to look at how we balance practicality and cost against independence, and we hope to come up with something that satisfies as many people as possible.

Having referred to the communication or lack thereof between the DWP and the Scottish Government and others, I should be fair and check whether COSLA is happy with the level of information that it is getting from the Scottish Government.

Yes. [Laughter.]

I have to be seen to be fair.

Having finished all the questions on the first element, we will move on to the second element of our discussion, which, as I indicated earlier, is on the statutory instrument. I invite questions from members.

I am pleased that we are slowly but surely working our way through schedule 5 and that reserved matters will no longer be reserved.

Having looked at the section 30 order, I think that the timescale for this work seems quite tight. I imagine that we in the Scottish Parliament will have no difficulty in meeting the timescale, but both houses at Westminster have to approve the order. Have you received any information about what is happening there?

I do not have specific dates but, as you will be aware, the Scotland Office manages the process through the House of Commons and the House of Lords and we have a timetable to which we are working that will ensure that this will be in place by the necessary date. When I last checked with the Scotland Office, which was last week, it did not raise any concerns about meeting the timetable.

By what date does Westminster have to sign this off?

I am sorry, but I do not have a specific date. Our intention is for the order to go to the February meeting of the Privy Council and the introduction date has been set to allow that to happen.

Finally, an issue has been brought to my attention that might seem pretty technical but should be clarified. If you have the information in front of you, that is all well and good, but if you need to get back to me, that, too, would be acceptable.

Article 2(3) of the order sets the points at which two pieces of legislation would be considered to be frozen from the point of view of interpreting the scope of welfare benefits that will remain reserved under the Scotland Act 1998. One of those points is a date in the past, which allows us to be certain of what the Parliament is being asked to agree to. However, the other point is a date in the future, which means that, as the legislation concerned has not been devolved, the Parliament is being asked to agree to an interpretation of something that could be amended between the approval of the order and its coming into effect and over which the Parliament would have no control. Is my understanding of the position correct? If so, how can the Parliament be confident that it knows what it is being asked to agree to?

This is why I brought my colleague Gordon McNicoll with me.

Convener, I will take your hint that you will accept a written reply and get back to you in writing. [Laughter.]

It was well worth having you here, Gordon.

If there are no more questions, I thank the witnesses for their information. I suspend the meeting for a few minutes to allow for a changeover of witnesses.

11:53 Meeting suspended.

11:56 On resuming—