Item 3, on passported benefits and the social fund, is our first substantive item of business. The Cabinet Secretary for Infrastructure, Investment and Cities and her officials are in place and are very welcome to the committee. Would the cabinet secretary like to make a brief opening statement before I open up the discussion to questions?
Thank you very much, cabinet secretary. I apologise to you and the committee for any discourtesy that you may have felt because I was not here when the meeting kicked off—a combination of fog and broken down cars on the M8 prevented me from getting here on time.
I want to explore further what is happening with the DWP’s timescale for producing the awards notification. The last time the cabinet secretary was here, it was the same scenario of continuing uncertainty from the UK Government via the DWP. Is there any indication of when we may get the final picture from the UK Government in order that we can make our consequential arrangements?
It is fair to say that we do not yet have absolute certainty—or even any certainty—about when we will get that information. I will be as diplomatic as possible, but I have to say that that is extremely frustrating. Obviously, we are working to tight timescales to ensure that we have arrangements in place so that people who are currently entitled to passported benefits continue to be eligible.
Clearly, it would be helpful if the award letter from the DWP listed the claimant’s previous benefits. With the DWP having signalled that that was its intention, presumably a degree of planning was done on that basis. Has the DWP said why that will no longer be the case?
For reasons best known to itself, the DWP has changed its mind on that. I am not aware that we know of any rationale for the change. The original proposal still seems to me to be a sensible way forward and the most efficient way of making the transition from the current scenario to universal credit so that those who are currently entitled to access passported benefits keep that entitlement. The DWP has changed its mind on that and we need to work with that. The sooner we get clarity on the form of the award letters and the order in which particular groups of claimants will be migrated on to the new system, the sooner we will be able to inform our own thinking.
The DWP seems to be very good at changing its mind but not so good at communication.
Indeed.
That is a very appropriate place for me to ask my supplementary question, which is on channels of communication. At a much earlier stage in the process, the minister made it clear that channels of communication with London were open and were working quite well. More recently, that appears not necessarily to have been the case. Does the minister believe that the channels of communication have been weakened as a result of the Cabinet reshuffle? Is there a continuing good relationship, or does the relationship require further work in order to achieve the current objectives.
I think that I said—I do not have the Official Report in front of me, so forgive me if I get this wrong in any way—that the problem was not the channels of communication but what was being said, or not being said, through those channels of communication. If you are talking about the Scottish Government reshuffle, that has not had a bearing on this, because I was responsible for this before the reshuffle and I am still responsible for it now—
I should say that I was referring to the reshuffle in the Westminster Government, where there has been a significant change of personnel within the ministry.
My apologies. As far as I am concerned, the reshuffle has not had a bearing on this. The lines of communication with the people in the DWP are there and we try very hard—as, I am sure, do they—to ensure that the lines of communication are open. However, the problem is the lack of information that is coming down those channels of communication. That has been the frustration all along and it remains the frustration.
Do you believe that the lines of communication are functional at the moment, with the qualification that you are not satisfied with the information that you are receiving?
When you are dealing with a situation in which a UK Government department is implementing massive policy changes that have a massive impact on devolved responsibilities, I guess that there will always be a need to ensure that channels of communication are as good as they can be. I know that the problem is not that my officials and ministers are not trying—believe me, we are—to get the information.
You told Annabelle Ewing a few minutes ago that you feel that your process of development is being held back by the lack of information. Can you put a timescale on that? How much delay is already in the system?
I had hoped that we would have regulations in place by 1 April next year that would give clarity about how existing claimants of passported benefits will continue to access them. I am no longer able to say that, because I do not have the kind of information that we have been talking about. We now have to have the regulations in place by October next year—we have to do that if we are to fulfil our policy objective of maintaining access and eligibility. Presumably, the DWP has to have that detail in place by that time, too, because that is the starting point for the roll-out of universal credit.
Just to complete the questions on timescale, given that you have to develop your regulations to conform with regulations that have developed in the south, how quickly do you need them and how far behind will you be with their development?
We will lodge regulations as soon as we have the information to enable us to put them together and lodge them. We had intended to introduce regulations in February for April but now, in order to get them in place for October, we need to introduce them by June next year. That is the broad timescale that we are now working to.
I want to comment on the communication side of what has been said. Obviously, while we are talking in high-falutin’ terms with regard to when the regulations will come into being, those folks who are currently in receipt of passported benefits are probably quite worried about the fact that we are not able to deal with regulations and they might fear that benefits could be withdrawn. Can we have an assurance that the delays that have been caused by the DWP will not lead to anyone losing their passported benefits?
I am happy to give an assurance—as I have done in the chamber and, I think, in a previous meeting of this committee—that the clear intention of the Scottish Government is to continue the eligibility of people who currently receive passported benefits, and their access to those benefits. That is our duty and obligation to those people, many of whom will be among the most vulnerable people in Scotland.
I thank the cabinet secretary for that answer. Although it is a reiteration, I think that it is vital that we keep making that point on the record.
We told the DWP that our estimate was that the set-up costs would be in the region of £5 million. As you can see, we have been offered a fraction of that. Obviously, we have had further discussions with the department to consider how we can reduce our costs by working as efficiently and cost effectively as possible, and the DWP has agreed to reconsider the issue once we have reduced our estimate. I am hopeful, therefore, that we will get to a better position than the one that we are in just now. Where we will end up remains to be seen, but we are working hard to get to a more realistic agreement from the DWP about the amount that it will transfer for the set-up costs.
In terms of set-up costs, it may well be that the committee should write to the minister as well to say that if we are to implement those things here, we require the funding to do so. The committee could perhaps back up the Scottish Government in that regard to see whether we can get more of the cash that is required for set up.
We will take that on board, Kevin, and discuss what we will do.
I want to ask about the guidance on the Scottish welfare fund—the successor to the social fund.
I appreciate that Iain Gray is new to the committee. We have discussed this in the past. The scheme that we are putting in place from April next year is deliberately intended to be a transitional scheme. We decided to go down that road partly because of some of the issues that we have talked about in terms of timescales and our getting information and being able to translate that into policy.
I wonder to what degree you have been able to explore two dangers in that. One danger is that, in the transitional period, those who are seeking support from the fund have a lesser entitlement than they have at the moment. I do not think that that is the intention of the Scottish Government, but there is now a greater degree of discretion for local authorities and therefore less entitlement. The other danger relates to whatever scheme the Scottish Government might plan in the long run, because there is already case law. For example, “high priority” is defined as an item that has
We are not operating in a perfect world.
No.
That is my general comment. We are being driven to a much greater extent than I would want us to be by policy decisions that are being taken elsewhere. In place of what has gone before in the Westminster scenario we are making every effort to put in place arrangements that are fit for purpose, which deliver our policy objectives and which deliver continuity for people—particularly in relation to passported benefits but also in terms of the social fund successor arrangements.
One of the biggest imperfections in an imperfect world is surely that there is a demand-led need but a cash-limited fund. I appreciate that you have extended the fund and provided additional funding that has been devolved. Nonetheless, it is still a finite resource, and one of the criteria for rejecting an application is that there are no funds left. That is not new, because it is true of the social fund at the moment. However, it is also true that, at the moment, anyone whose application to the social fund is rejected can ask for a review and then, indeed, an independent review.
The guidance is not finalised, so I am happy to consider the points that you make in that regard. It is a cash-limited fund. That has always been the case and it will continue to be the case. It is less cash limited than it would be if we were just taking the transferred fund. I have figures here that go back only to 2005-06, but they show that, with the additional resources that the Scottish Government is committing, the fund will be bigger than it was in any of the years since 2005-06. We recognise that, given the times we live in, demand for such a fund is likely to rise. The extra resources will allow us to double the award.
Still on the Scottish welfare fund, I am aware that April 2013 is not that far away now. Given that there have been issues about getting information that is at the root of all this and that must feed through, how ready do you think local authorities are to take on the additional responsibility?
We have been working very closely with local authorities. The design and implementation group to which I referred has brought together Government, COSLA and local authority representatives. We have worked on the agreement between us and COSLA on the transfer of the funding, the guidance and so on, and we will continue to do that. COSLA and the local authorities have worked with us very constructively. There is a shared desire to get the arrangements up and running and working properly. We will continue to work with the local authorities to ensure that they are ready to do that when they need to, which is by April next year.
I am aware, too, that not all local authorities have their own money advice service. Like Iain Gray, I am fairly new to the committee, so a lot of this ground may have been covered before, but I wonder whether there is a feeling in Government that there has been good communication between local authorities and other organisations in their areas that deal with these issues, such as citizens advice bureaux.
That is a good point. Communication like that needs to continue. I mentioned this briefly in response to Iain Gray’s point, but one of the big advantages of having the Scottish welfare fund devolved and putting local authorities in the lead in administering the fund is the ability that it gives them to join it up with other forms of advice. For example, somebody who comes for a crisis grant is not just given the grant but offered help with budgeting, money advice or resolving some of the underlying problems that may have led them to seek a crisis grant. The welfare fund can be put into the bigger package of support that councils can offer. That will necessitate councils learning from each other and working with other organisations, particularly third sector organisations that provide advice.
Can you tell us a bit more about what people who took part in the consultation said and how that will inform any arrangements that are put in place?
Are you talking about the social fund consultation?
Yes—the one that got the 84 responses.
That is the passported benefits consultation. Broadly speaking, as I said in my opening remarks, we will do a full analysis of the consultation and will pass that to the committee as soon as it is available, which we expect to be in December. What I am about to say, as I said in my opening remarks, is unvalidated, so forgive me if the final consultation analysis shows something different. However, generally speaking, we saw a lot of support for the principles that we outlined, which included maintaining access to and budgets for passported benefits. In other words, there was support for our not taking the welfare changes as an opportunity to rationalise or change dramatically the groups of people who would be entitled to passported benefits.
I presume that there will be on-going dialogue with local authorities.
Absolutely.
I also presume that that will be the case for the third sector, too.
Yes. We may come back to this, but the third sector is rightly concerned, as am I and as are all of you, about the impact of the welfare changes and how that will translate into demand for the third sector’s services. We are talking to the third sector about that. I recently met Citizens Advice Scotland to look at and discuss how it will respond and how we can best support it.
With regard to the social fund, in the past the committee has had a conversation about access to DWP data—Kevin Stewart led on that—and I note from the bare bones of the proposals for the new scheme that local authorities are now to have the required access to that data to check applicants’ information. Where are we on that? On the basis of the previous discussion, the committee was not entirely convinced that the system that will shortly be in place would be seamless with regard to DWP developments.
It is fair to say that the principles of that are all in place and have been agreed. Work is still going on with regard to the mechanics of exactly how local authorities will access that data, but at this stage I am not concerned that we have a problem in that respect. If the situation changes, I will let the committee know.
I have a point on which I would like clarification. I, like you, have been talking to third sector organisations. According to statistics that one of the organisations I was talking to this week gave me on changes in funding for community care grants and crisis loans, £38 million was available in 2010-11. The organisation said that because of changes in criteria, including, for example, a limit of three applications in a 12-month period, people can no longer get white goods such as cookers or fridges unless they have been in a disaster situation such as a fire or flood. It also said that the fund itself has been reduced to £25 million. I know that you have made additional funding available but the impression out there is that, even though you have added to the amount of money that the DWP has cut the fund back to, the total funding is still less than was available previously. Is that the reality of the situation?
I have figures going back to 2005-06 that I am happy to share with the committee. In 2010-11—the year that you highlighted—total social fund expenditure was £29.5 million, £20 million of which was for community care grants and the rest for crisis loans. The committee should remember that the UK Government has made an overt attempt to manage back expenditure on this, but the amount that the DWP proposes to transfer to us is £23.7 million, to which we will add £9.2 million. That brings us up to just under £33 million, which is higher than any other expenditure on the social fund. Indeed, the previous high was in 2009-10, when expenditure was just over £30 million.
It would be useful if you could share those figures with us. After all, if concerns exist, it would be better if we were all working from the same figures to prevent a situation in which one group might think that the figure is greater than it actually is and is advising people accordingly. Most organisations will appreciate it if we can bottom out exactly what is available and they can see what the exact changes are.
I see no reason why we cannot share the figures with the committee, so I will get them off to you.
That will be really helpful.
I am aware of that development. The committee should forgive me as I might not have all the fine detail but, as I understand it, the main changes that have been agreed in Northern Ireland are as follows: the housing cost element of universal credit will go directly to landlords rather than the claimant; it will be possible to split payment of universal credit between two parties in a household; and universal credit itself can be paid twice a month. I want Scotland to have the opportunity to implement such changes and we will certainly use the Northern Irish example to strengthen our hand.
The committee will support you in your endeavours to get parity and ensure that the amendments to the Northern Ireland situation are also implemented here. The evidence that we have taken from organisations seems to indicate that they would have looked to such solutions to address concerns about the implementation of the changes. Indeed, the fact that money will now go to landlords is itself a major concession.
I am just reading the summary of what has been agreed and it appears that the Northern Irish minister has said that he will introduce universal credit from April 2014 instead of October. However, one of the key differences between him and me is that he has the ability to say whether or not something will be introduced, whereas we do not. We will nevertheless continue to exert as much influence as we can.
As members have no other questions, I thank you for your evidence. Do you have anything else to add before we conclude this evidence session?
I will ensure that we get these various bits of information to the committee. I should also say that when I first agreed to come to the committee at around this time, I had hoped to be in a more advanced position with passported benefits. When we have the additional information that we seek, I will be happy to come back and flesh out some of the things that we have not been able to talk about today.
Thank you very much. I suspend the meeting for a few minutes for a changeover of witnesses and to give the cabinet secretary a breather.