Good morning, everyone, and welcome to the 11th meeting in 2015 of the Welfare Reform Committee. I ask everyone to make sure that their mobile phones and electronic devices are in silent mode or switched to airplane mode.
Today’s meeting might be slightly shorter than we originally intended when we planned the agenda, because we hoped to invite Atos and Salus to appear before us but we could not arrange that in time. We now plan to take evidence from them on 23 June.
Agenda item 1 is a discussion with the Cabinet Secretary for Social Justice, Communities and Pensioners’ Rights, who I am glad to say is always willing to appear before us. I welcome the cabinet secretary, Alex Neil; Jamie MacDougall, head of the social security policy and delivery division; and Edward Orr, senior policy officer in the social security policy and delivery division.
I invite the cabinet secretary to make some opening comments, after which we will have a discussion.
I will keep my comments brief so that we can have a wide discussion. Thank you very much for giving me the opportunity to come in front of the committee. Since my last appearance at the committee, a lot has happened regarding the welfare powers that are to be transferred to the Scottish Parliament.
I say at the outset—I emphasised this the last time I was here—that we are about to begin a consultation process on what we should do with the new powers and how they fit in with our existing powers. I am keen to ensure that the committee is a key participant in the consultation and that we work together on that. If we can get a consensus in the Parliament on the way forward once the powers are transferred and on how they fit in with our existing powers, that will beneficial, not least to the people who are reliant on the benefits in question for their wellbeing and their standard of living.
As we are all aware, there are real challenges ahead in taking forward the powers that the Smith commission proposed that we get. There are also challenges associated with austerity and dealing with the consequences of the United Kingdom Government’s welfare reforms. In particular, there is an emergency budget scheduled for 8 July, when the detail of at least some of the £12 billion of additional reductions in the welfare budget that the UK Government is proposing to make and the impact that there will be on the powers that are to be transferred to the Scottish Parliament will become clear. We do not know the details of those cuts, because we have not been consulted on that. I hope that we will be consulted, but I suspect that that will not be the case. We are particularly concerned about the impact of the cuts on women, children and people with a disability. Those are the three categories of people whom we believe have been particularly adversely affected by the reforms up until now. We will be interested to hear what the committee has to say about the additional reforms/cuts and what impact they will have.
As you know, recent research by Inclusion Scotland and the Scottish Government shows the real fears that people have about welfare reform. Last week, I wrote to the UK Government to set out our concerns about the £12 billion cuts and the future of the joint ministerial committee on the transfer of welfare powers. I am happy to update the committee on progress on those matters.
Prior to the general election, a couple of meetings were held with the UK Government to discuss the transfer of the powers, but progress has been a bit slow since the general election. I have a conversation with the Secretary of State for Scotland planned for this afternoon, in which we will try to agree to reconvene the joint ministerial committee on the transfer of powers. There has been a change of personnel in the UK Government. The secretary of state was the minister of state but I believe that he will continue to co-chair the committee with me. However, there have been changes in personnel at the Department for Work and Pensions and the Treasury, so who will represent the UK Government needs to be sorted out. I hope that the joint ministerial committee will reconvene fairly soon after that and get on with the job.
Since the general election, the Prime Minister and the secretary of state have both said that the Scotland Bill will implement the Smith commission recommendations in full. However, we believe that the Scotland Bill, which was published on 28 May, falls short in a number of key areas. Apart from modest changes to the welfare provisions, the policy that is reflected in the bill is pretty much identical to that which was published in January. However, the unanimous report of the Scottish Parliament’s Devolution (Further Powers) Committee concluded that, in some critical areas, the UK Government’s draft clauses fell short of the Smith recommendations.
It is extremely disappointing that so little progress has been made in the four months since the draft clauses were published, despite a range of constructive suggestions having been made and despite engagement by the Scottish Government. We have drafted and shared with the UK Government a full set of alternative clauses on welfare, which would have implemented the relevant Smith commission recommendations, but those have not been included in the Scotland Bill. The Scottish Government will continue to press the UK Government to amend the bill to ensure that it reflects the substance and spirit of the all-party Smith commission.
Our greatest priority at the moment is to ensure that people have the opportunity to have their say on the new social security powers—as we prefer to call them. I value the work that is being taken forward by several organisations, including the Welfare Reform Committee and non-governmental organisations, in relation to that. We can discuss the consultation process either here or offline to ensure that we are being inclusive and that the committee is satisfied that we are including all the key stakeholders, particularly those who are or could be recipients of benefits. How those people are affected matters more than anything else.
A lot of work is going on behind the scenes to prepare for the new powers. Scottish Government officials have met a range of people and organisations from the UK Government in devolved areas and in the wider field, but much more remains to be done. However, I hope that, by the end of the year, we will have a much clearer picture of what we want to do with those powers—I hope that there will be consensus on that—not just in isolation but in the context of all the powers that the Scottish Government will then have in relation to social security, to maximise the impact of those powers and their budgets to benefit the people that we are here to serve.
Thank you, cabinet secretary. One of the reasons why we invited you here today is that, as you know, we committed to holding an inquiry in the autumn into how the additional welfare powers that were promised under the Smith agreement might be used in practice—for example, how the new personal independence payment would operate. At the time, you thought that that was a good idea, but you have just made clear how fast things are moving and how quickly we might see some change taking place. Do you still think that our holding an inquiry in the autumn will serve a purpose?
I do, convener. A number of issues need to be fleshed out, and that will not necessarily have been done by the end of the calendar year. Once the powers have been transferred, there will, in effect, be two welfare or social security systems operating in Scotland: the social security system that is being operated by the Scottish Government and the social security system that is being operated by the UK Government. The interaction between those systems will be extremely important. For example, I am very keen that we try to get one delivery mechanism for both systems so that people are not forced to shop around and will find it much easier to find out what they are entitled to, whether through a Scottish Government programme or through a UK Government programme.
The decisions and policy of one system will have an impact on the other. An example of that involves the carers allowance. We are keen to increase the level of the carers allowance so that it equates to the jobseekers allowance, but a consequence of that would be that any additional money that we gave to carers would be treated as income under the DWP’s universal credit system. That is one small example of how decisions in one system can impact on what happens in the other system. It is the net effect—in that instance, for carers—that we need to look at, and there needs to be a degree of co-ordination between the two Administrations on an on-going basis.
Those are the kind of issues that the Welfare Reform Committee could look at in considering how the new ways of doing things are being implemented and what their impact will be, probably over several years. There is a watchdog role for the committee in monitoring—in addition to the policy issues—how the two systems are operating, the impact of each on the other and, in particular, the impact on the end users of the services.
We have asked for two things in relation to PIP, which the convener has mentioned. First, we think that it would be sensible to stop the roll-out of PIP throughout Scotland, because we do not want to roll it out and then replace it very shortly thereafter with something else that we agree would be better in Scotland. If that happened, the beneficiaries—the disabled people—would have to deal with three different systems in the space of about three or four years. I do not think that that would be very clever, and it would be very expensive.
Secondly, given that, under the current plans, the budget for PIP is likely to be reduced by 20 per cent, we have been arguing that PIP should be transferred before the budget cut to allow us to decide whether we want to continue with the current planned levels of benefit for PIP or whether some of that could be better targeted at, say, more disabled people.
Those are the kind of issues in which the committee needs to be heavily involved. I therefore think that there is still merit in your holding an inquiry, although its remit might be slightly different from what was originally envisaged.
That is helpful, cabinet secretary. I know that you watch the committee’s work closely. You will have seen in the evidence that we received last week, for our inquiry on the impact of the social security changes on women, the example of the impact on universal credit of any increase in the carers allowance. Importantly, some of last week’s witnesses also talked about what they want to happen with the powers and how those powers would interact with current powers and policies. Have you given any thought to anything that you heard last week about how the current system of support for women through the services that are currently provided could be enhanced or progressed using the new powers that you expect us to get?
There is no doubt that women, children and, in particular, the disabled have been especially impacted by the welfare reforms and cuts, and I think that addressing that situation is a top priority. However, I am determined not to pre-empt the consultation that we are going to launch before the summer recess. It would be wrong of me to do so, because we want to listen to what people are saying before we start to comment on whether one option is better than another.
Whatever we do, we must give priority to trying to improve the situation for women, children and the disabled, given that they have been particularly adversely affected. That said, if I started to provide a running commentary on every new idea that came forward during the consultation process, that would be unfair to the people who were making contributions. Once we get all the feedback, my job will be to go through it all with my officials and produce a set of proposals that will, I hope, gain consensus. We are monitoring very carefully what is being said, including what was said by the people who gave evidence last week, and the ideas that are coming forward.
As well as taking into account extremely important issues such as the targeting and level of benefits, the regularity with which they are paid and, in the case of housing benefit, the person to whom the benefit is paid, we need to examine how the benefits system delivers its services. There is no doubt in my mind that one of the major problems for people is the sheer number of benefit centres that they have to deal with. As I think I mentioned the last time I was here, I had a case in which I sat with a constituent and dialled six different benefit centres only to be referred back to the first one before we could get a solution to the problem. That cost me about £7 or £8 on my mobile phone. I got that back in expenses, but someone who is on, say, jobseekers allowance and is getting barely over £70 a week cannot afford to spend £6 or £7 on their mobile phone to shop around benefit centres. If we can take that kind of aggro out of the system, we will do everyone a big favour.
I now open up the discussion to questions from committee members.
10:15
Last week, we had representatives around the table from a number of organisations who said that they would like the sanctions regime to be devolved to the Scottish Parliament. In particular, a number of folk highlighted the disconnect between devolving employability programmes but not the conditionality and sanctions regime. Would you support that view?
Absolutely. As it is currently administered, the sanctions regime is harsh and inhumane. It is causing enormous poverty and is causing people to get into debt that could be avoided.
The purpose of the sanctions regime is to punish—if I can use that word—people who are not genuinely looking for a job. Let me say right away that I have no truck with people who try to defraud or manipulate the system and do not play by the rules. I have no sympathy for them. They bring the whole system into disrepute, and that is not beneficial to anybody. That said, the number of people in that category is small. The vast number of people who are on benefits cannot find a job or are not fit to work.
In my experience, some of the reasons for sanctions are absurd. I have seen people sanctioned because they were a few minutes late for an appointment. People who are on universal credit have to spend 35 hours a week looking for a job, or 17.5 hours looking for a job and 17.5 hours volunteering. I spoke to people in Inverness who are on universal credit and I was also told that somebody was threatened with sanctions for volunteering more than 17.5 hours. That is an absurdity. Other examples included someone being sanctioned because they missed an appointment at the jobcentre when a babysitter cancelled at the last minute, even though they phoned up to explain the circumstances.
When people are sanctioned, their money is cut off for an indefinite period—in most cases, they are not told that the money has been cut off; they find out only when they go to the bank. Like everyone else in this room, I am sure, I have had a lot of people coming to my constituency surgeries who have got into enormous debt and have even gone to moneylenders in order to make ends meet.
I think that the sanctions regime needs to be completely scrapped. I am absolutely in favour of taking action to ensure that people who refuse to look for a job for no good reason do so. However, the extremities of the sanctions regime are extremely damaging. Ironically, the sanctions regime costs the public purse more money than it saves, because we end up with people who are destitute and who then require the provision of local services such as housing, social work, welfare and a range of others. If you did an exercise, you would find that that is the case, certainly in a number of instances.
Yesterday, I visited Aberdeen Council for Voluntary Organisations. Its cash in your pocket team gave examples of difficulties resulting from the sanctions regime. You are right that it probably costs more to deal with people in the way that we are dealing with them just now, and that the state has to pay the additional costs.
I was also told that, although some folks’ sanctions are overturned, by the time that happens, the damage is done, because another debt has been accrued. Folks will get the money that they are due, but they will not get any interest on that money. If we get the powers over sanctioning as well, which I hope we do, how do we ensure that we create a fairer system?
At this stage, I am not optimistic that we will get the powers over sanctions. As things stand, the indications are that we will not.
We should start from the basic. The policy of the Department for Work and Pensions—I have spoken to the head guy about this—is that the people who are sanctioned are people who are genuinely not looking for work, not people who genuinely missed an appointment because the babysitter could not make it, people who were genuinely late or people who could not turn up for very good reasons.
The first thing that I would do would be to abolish the targets that the DWP officials have for sanctioning people, as they drive a lot of the inhumanity in the system.
Secondly, I would enforce the rule that the only people who are sanctioned in any way are those who are genuinely not looking for work. However, they should be given the opportunity to correct their behaviour. I would not sanction them by immediately withdrawing their money and not telling them that it has been withdrawn, because we have to consider the consequences of that. As I have said, the consequences could be far more damaging.
Previously, people were warned, as it were. They got a warning or sometimes two or three warnings. At the end of that period, if they absolutely refused to do anything, action was taken. That would be a much more humane system that would ensure that people genuinely look for work. It is fair for society to say that, if a person who is fit to work is not going to look for work and is just going to abuse the system, it will not allow that to happen. However, we cannot punish that person’s kids or spouse because of that. We have to be very careful. We have to be humane and proportionate, and the approach has to be effective. The regime that we had before the current regime of sanctions was introduced was a better system.
You talk about having no targets. I think that the committee would agree with that. The DWP denies that there are any targets, of course, but we have plenty of anecdotal evidence that there are. You also talk about a more personalised service that is tailored to the individual and what is going on in their life.
Absolutely.
How can we have that personalised service if we do not have control over the sanctions part as well and there is a disconnect between that and employability services, which we are likely to get with the transfer of powers?
We have made things very clear. Let us leave aside my position on the constitution. From a practical point of view, it seems to me that the current suite of powers that is being transferred is wholly inadequate. Either the whole suite of relevant powers is transferred or we are in danger of ending up with the kind of mess that you can get with two systems that contradict and undermine each other. Sanctions provide a very good example of that.
My view is that all the welfare powers should be transferred to the Scottish Parliament. If it is good enough to have the ones that are being transferred, the same logic should be applied to the other powers and they should be transferred. That would avoid a lot of the problems that will arise under the current proposals, which I have already mentioned a number of. It would also allow us to tailor the social security system in the way that we want to meet the needs of people in Scotland. It is fair to say that we would do things very differently.
Let me give the committee three practical problems that people who are genuinely looking for work have. One problem is finding access to a computer for 35 hours a week. Many people in low-income groups simply do not have access to a computer, and it is very difficult to get access to one in many areas, particularly in rural communities, for 35 hours a week.
Secondly, as I said earlier, people who are genuinely looking for work deal with people whom they cannot see eye to eye. They deal with call centres all the time. There is no substitute for eye-to-eye contact when people have problems with their benefits. I am not saying that there has to be such contact every week to pay out the benefit, but people who have problems should be able to see and talk to someone.
Thirdly, the system at present is divorced between the people who are responsible for administering benefits and the people who advise clients on which benefits they are entitled to. I personally think that we should consider the co-location of the people who administer the benefits and the welfare rights organisations. We would then have a much more rounded service, and people would not need to shop around. We could get a bigger bang for the buck we spend on welfare rights, and we could assist more people. Co-location would prevent a lot of claims from going to appeal, for example, and problems could be nipped in the bud much more quickly.
I am not saying that the two services should be provided by the same people—they have to be administered by two separate organisations—but if they were co-located, so that people could check there and then with the welfare rights service that what they have just been told is right and that they are getting everything to which they are entitled, that would act as a preventive measure to ensure that problems did not occur. Co-location of those services is an issue that I personally want to look at.
I want to turn to the impact of welfare reform on children. We had a one-off evidence session on the effect on children’s services budgets, and what came through was that the sanctions regime and low-paid work were putting incredible pressure on families and leading to an increase in mental ill health.
We took evidence from a representative of Barnardo’s Scotland last week, who said that, instead of working with children within the GIRFEC—getting it right for every child—context of early intervention, the charity is much more likely at present to be intervening when there is a crisis. That is all to do with the impact of the savings in the DWP being pushed out to organisations in the third sector and social services.
Personally, I think that it is morally reprehensible that we are sanctioning anyone who has a child to look after. Are you, and the Scottish Government, considering doing any substantive work on the more general cost to society of welfare reform, given the effects of services not being able to carry out early intervention work with young people and the effect that poverty will have in the long term in Scotland?
In various parts of the Government we are constantly doing impact assessments and evaluations. We also rely on outside organisations that do their own work, provided that they are reliable and respectable. I will ask Jamie MacDougall to give you an indication of some of the work that we are doing, will be doing and have done in undertaking impact assessments of policy changes.
As the cabinet secretary said, we have various studies on the impact of the current welfare reforms. I think that the committee has seen recent reports on those. Those studies will be updated when we know more about the scale of the coming cuts, and where the further £12 billion of cuts will fall. Those are long-term, longitudinal studies, and it is not immediately clear what the impacts are, as some of them are much longer term. The impact of cuts such as the limiting of uprating may not be apparent immediately but, in the long term, the more that uprating is kept down and limited against inflation and everything else, the worse the impact increasingly becomes.
I would be happy to send the committee a list of the studies that are being undertaken both by us and by other parts of the Scottish Government that are affected by this policy area.
Thank you, cabinet secretary.
Good morning. I want to pick up on the point that my colleague Clare Adamson has just made and extend it a wee bit.
A number of organisations have fed into the debate, either directly to the committee or outwith the Parliament. They include organisations such as close the gap, the Fawcett Society and Engender. People from those organisations have talked about the gendered barriers in the current system. Cabinet secretary, you and I have fought a long and tiresome battle in Lanarkshire for equal pay for some of the people who work in our local authorities, most of whom are women. What cognisance has the Scottish Government taken of gendered barriers? Is it taking any action to try to break down those barriers?
10:30
That is very much at the forefront of all our thinking. The First Minister has heavily emphasised the need to ensure gender fairness, balance and equality. We will apply those principles rigorously in any policy development that we undertake in relation to this matter.
The committee has heard evidence on gender barriers. We are looking at how to break those down, so that we have gender equality. Clearly, there are areas where women are not always treated as fairly as men are treated. In some cases, that might be attitudinal; in other cases, it might be how the benefits are being applied. Whatever the barriers are, we want to break them down. In fact, that would make a useful addition to the inquiry to which the convener referred. We must ensure that any new system that we introduce tackles and takes down the gender barriers, so that we get equality between men and women in terms of how the whole system works.
I appreciate those comments, cabinet secretary. The figure that we have in front of us is that 85 per cent of all welfare reforms are impacting on women, especially women with children and women who are either out of work or in low-paid jobs.
There are two aspects of welfare reform that I want to discuss with you. One is the benefits cap, which I will come back to, and the other is universal credit. A power that we hope to get following the Smith agreement is the devolution of the administration of universal credit. A concern is that, especially in households where the woman is low paid or there are things going on in the household, such as domestic violence, universal credit would be paid to one householder. Would there be any room in a Scottish system, should you have that power, to ensure that that is paid to the key person in the household and not just to the man?
Absolutely. A fundamental principle of applying equality is that universal credit would not automatically be paid to the male householder but would be paid to whoever the appropriate person is. We would need to define “appropriate person”.
A benefit of child benefit as introduced by Barbara Castle all those years ago was that it was paid to the mother. That was positive discrimination in favour of mothers. It was done for good reasons, because the evidence showed that, in a lot of cases where male household members picked up the child benefit, the child and the mother never saw it. There would have to be clear indications of when and to whom universal credit would be paid and under what circumstances.
We have asked for three immediate changes to make to universal credit. The number 1 change is to formally abolish the bedroom tax in Scotland. We are paying for its abolition anyway, so we may as well abolish it.
If an exercise was done, it would probably show that the bedroom tax is costing more public money than it is saving. Depending on the circumstances, it costs around £24,000 to £40,000 to make someone homeless. Therefore, one person becoming homeless because of the bedroom tax amounts to a lot of bedroom tax for a lot of people.
The second change—we have asked for the flexibility to do this sooner rather than later—is to allow people to be paid weekly or fortnightly and not just monthly. I do not think that, because of how the computer systems have been set up, it would be possible to make weekly payments.
That is right, but it could be paid twice monthly.
It could be paid fortnightly. People are finding it difficult to manage with a monthly payment, especially if they have been used to weekly payments.
The third immediate change is to have the flexibility to pay the housing benefit directly to the landlord. Under the old system, 96 per cent of housing benefits were paid directly to the landlord. The number of people who got into debt because of non-payment of their housing benefit was tiny. I think that everyone agrees that that was a far more sensible system than the one that we have now. I think that the DWP is beginning to roll back on its policy.
I know that the system has been put in place for a good reason, which is to make people responsible for their own actions. That sounds great in theory but, in practice, a lot of people are getting into debt because they are using their housing benefit payment to pay for other things, such as feeding the family, buying school shoes for the kids or whatever. We should return to the system where the payment is made to the landlord, unless the beneficiary explicitly exercises their right to be paid directly, as 4 per cent did under the old system. Returning to the old system would be beneficial to women, too.
Absolutely—I agree.
Last week, I asked about the proposal to reduce the benefits cap even further and how that would impact on low-paid women—women who are in minimum-wage jobs, who have to work around the school day and who get top-up benefits in order to survive. I noted last week that Lord Kerr, in the Supreme Court, has ordered that a judicial review should proceed of the benefits cap and its impact on children in respect of
“adequate food, clothing, warmth and housing”
Would you welcome such a judicial review?
My addendum to that question last week was about the United Nations Convention on the Rights of the Child, a possible withdrawal from the European convention on human rights, the repeal of the Human Rights Act 1998 and the ability of anybody to challenge the system in that respect. When we reach a point at which the fundamental needs of children are not being met, how can we remedy that? We cannot continue to mitigate a bad system. How can we ensure that the system supports young people?
That is my point. It is very difficult for us to remedy the system because we do not have the resources to do that, nor the powers to override the decisions of the UK Government in these matters. That is another reason why I would like all those powers to be transferred here. I think that we would have a much more humane approach to these matters than the approach that is perhaps being taken at the moment.
I can understand the rationale for a cap, but a cap is a very crude instrument, which I think has unintended consequences—or maybe intended consequences—that are damaging to the most vulnerable sections of our society. I would not apply the kind of crude cap that we have at present.
A much better system, which we used to have in this country, is earnings-related benefit, where the amount that you are paid in unemployment benefit or sickness benefit is earnings related. There is a cap on it, because if you are earning 200 grand you are not going to get the same share of 200 grand as the share that you will get of 20 grand if you are earning 20 grand. However, the earnings-related benefit system that we used to have in this country, and which is fairly common on the continent, is a far better approach to dealing with these issues than crude instruments such as caps, which satisfy a lot of headlines but have many hidden consequences that are very damaging, particularly to children, to the disabled and to women.
Do you support the judicial review? Would you be against any withdrawal from the ECHR?
Yes. Our Government’s policy is very clear on that. We are utterly opposed to any withdrawal from the convention or any backtracking on the Human Rights Act 1998.
You will be aware of reports in The Guardian this week that David Cameron has refused to rule out cuts to disability benefits and has said that he will make no further cuts to child benefit. What implications does that have for Scotland?
The implications are not just for Scotland; there would be huge implications for disabled people throughout the UK. Poverty among disabled people is far higher than it is among the general population. Welfare to work is the key driver of UK Government policy, but disabled people are about half as able to get into employment as the broader population. For people with learning difficulties, the figure is about a quarter. Such people are very disadvantaged in life. We must try to rectify those disadvantages by getting them into appropriate employment that is reasonably well remunerated. However, until we can do that, they should be entitled to a good standard of living under the benefits system. It is not their fault that they are disabled, that they find it extra difficult to get a job or that they have to rely on the state for the entirety of their income.
I suspect that the cuts will be done not by reducing the disability benefit but by taxing the benefit. First of all, if the tax is fair, I do not think that it will raise much revenue, because there are probably very few disabled people who earn enough or who have enough of an income to pay tax in the first place. Secondly, taxing benefit is a very crude approach, because people have those disability benefits based on need. They need more benefits than somebody who is simply unemployed but not disabled, because they have additional expenditure due to additional living costs.
The design of the current benefits system, with higher levels for mobility and care as well as lower levels, recognises that people have different degrees of need. To start to undermine that would be a very regressive step.
I totally agree that people will be affected right across the UK. The tenor of my question was that, given that some disability benefits will be devolved to the Scottish Government and that, as you said, the talk is of taxing disability benefits, what are the implications for us if we mitigate some of that and try to improve benefits for disabled people? Could the UK Government then take that away through tax?
We would need to be very cognisant of that possibility, because there is no point in our paying out money that then lands back in the Treasury in the form of income tax. We would need to try to design a system that avoided that while maintaining the standard of living of the disabled people whom we are trying to help.
How concerned are you that the vetoes that have been highlighted by the Devolution (Further Powers) Committee will prevent you from doing exactly what you have just outlined?
I am very concerned because, frankly, Iain Duncan Smith has fought the changes tooth and nail and if, in law, he has the power to veto, my view is that he will use it. We want the power to veto to be completely removed from the Scotland Bill so that there is no huffing and puffing and there is no dubiety about what the law states. For a devolved responsibility, the UK Government should not have the power to veto, full stop.
We hope that amendments will be carried during the passage of the Scotland Bill to rephrase the clauses and we hope that the relevant clauses will be substituted by the clauses that we have already suggested to the UK Government, which disappointingly were not included in the Scotland Bill that was published last week.
In your introductory remarks, you mentioned that there would be two separate social security systems in Scotland if the transfer of powers went ahead. Will there be an interface where it will all come together or one simplified form so that people do not have to fill in separate forms? We already hear lots of evidence about how difficult the forms are to complete. Has any work been done on that and what is your view on it?
We have agreed in principle in the joint ministerial committee with David Mundell that at no time during the transition or thereafter should anybody who is reliant on benefits lose out in any way or have any period during which they are not paid benefit as a result of the changes that we are making.
It would be common sense for us to have a system whereby, at policy level, we consult each other before finalising policy to look at the impact—negative or otherwise—of any unintended consequences. We would look at the impact that a policy decision by us might have on the social security system that is operated by the UK Government and, vice versa, the UK Government would consult us on any policy changes before it makes them. We would then be absolutely sure that we were not making decisions that might have to be reversed quickly because of unintended consequences.
Similarly, as I said, we need to make life easier for the claimant, not more difficult. Therefore, it seems to me that there should be co-location of not just the benefits administration for the Scottish system and welfare rights advice but of the UK system, the Scottish system and welfare rights advice, so that people can go to a one-stop shop and get whatever benefits, whether they are UK or Scottish benefits, as well as advice on their welfare rights. That would make life a lot easier for people.
10:45
I agree. The point that I was trying to get to was whether there would be two separate computer systems. We have heard in the past about different systems being set up and the computers not talking to each other. Would there still be the same computer system even though the security benefits would be different, so that people would fill in only one form and would not have to fill in another one if they were claiming another benefit that was administered by the UK DWP?
Initially, during the transition, it will be exactly the same computer systems. We have officials talking to each other about that. Clearly if we decide to redesign some of the welfare powers—why get them if we are not going to make them more effective, efficient and targeted at the people who need them?—through time, changes will need to be made. It should not be beyond the wit of us or the Department for Work and Pensions to make changes in such a way that there is no detriment to the claimant, so that we do not make life even more difficult for them. If there is any difficulty with that, it should be dealt with behind the scenes so that the claimant does not have to worry about it.
From our work with the DWP so far, it has become clear that the current social security system is not connected. All the different areas where people claim benefits do not talk to each other. In some situations, people have to phone up to get a form sent to them, which they fill in and is then sent somewhere to be scanned in and then sent back to the same place to be entered manually into a computer system. That is common across different benefits. The current system is not well connected. Taking that as a starting point and then adding in our systems, there is a lot of opportunity to improve how the benefits operate.
I can give a good example. Two weeks ago, I had a constituent in to see me whose husband has developed dementia. She put in a claim for disability living allowance, which is a 40-page application. She got confirmation from the DLA centre that it had received the application form but, because of his age, had passed it to the PIP office. She did not hear any more from the PIP office, so she phoned it. The PIP office said that it had not received the form from the DLA office. She asked if the PIP office could phone the DLA office, but was told that she had to phone the DLA office manager. She phoned the DLA office manager, who told her that it was the PIP office manager who she had to phone. She phoned the PIP office manager and basically ended up having to completely resubmit the application. They were denying her the benefit from the date when she submitted the original application on the ground that they had no proof of it, but they had proof of it, because the DLA had confirmed that. I have ended up writing as an MSP to Iain Duncan Smith saying that this lady, who has been awarded PIP, should have it backdated to the original start date, because their system is a total shambles. In fact, the whole system is shambolic.
That is the kind of evidence that we have been getting in the past few weeks.
On sanctions, if someone is being paid universal credit, that will include housing benefit so, if they are sanctioned, they will lose their housing benefit. Are there any plans to extrapolate housing benefit from universal credit?
We agree with the Labour Party that housing benefit should be kept separate from universal credit. I think that one of the reasons why universal credit is proving so difficult to implement is to do with the complications of including housing benefit in it. At the moment, the UK Government’s position is that housing benefit will remain part of universal credit. There was an article in The Observer on Sunday about a report by the Resolution Foundation that says that universal credit must be redesigned because, as it stands, it is so shambolic that, from an administrative point of view, it is unsustainable.
I do not believe that the housing element of universal credit can be sanctioned. However, the risk is that someone who receives their universal credit as one package will not distinguish between the housing element and the rest of it. If their jobseekers allowance disappears, they will choose how to spend what remains but, technically, the housing element should not be sanctioned.
We will check that out.
People who are sanctioned might not understand that, and they might end up spending their housing benefit on day-to-day living expenses, thereby getting into debt and all sorts of other problems. That is another example of how, as things stand, the universal credit system is unsustainable.
The issue with sanctions is inconsistency. We have had many examples of that, and you will have examples, too. Does the Scottish Government plan to improve the training of people who deal with the public and their claims, particularly in relation to appeals? Lots of different assessments seem to be carried out on people’s health conditions, but the people involved do not seem to be properly trained.
That would be part and parcel of looking at the delivery mechanism that we are going to use. Part of the consultation will be about how we should administer the benefits in question.
At the moment, as you know, local authorities administer housing benefit on behalf of the DWP. They also administer council tax benefit, as well as other benefits such as grants for school uniforms and education maintenance allowance. There are some things that we administer that are not called benefits although, in effect, that is what they are; we do that through organisations such as Skills Development Scotland. On top of that, there are the new powers.
As part of the consultation, we need to agree what is the best way of delivering the benefits. My preference is to have no more than one delivery system, so that we make things as easy as possible for the individual. The training, location and recruitment of staff would be part and parcel of that process.
It is clear that we need to have a discussion with the DWP about staffing. When we take on the new responsibilities, there will be a staff implication for the DWP and issues such as those relating to the Transfer of Undertakings (Protection of Employment) Regulations will come into play. Generally speaking, we want to ensure on an on-going basis that the staff who are responsible for administering benefits are trained to the highest standard.
I will pick up on the comments that you made in response to Margaret McDougall. You will be aware of the Highland Council’s interesting pilot to develop an electronic application, which helps vulnerable tenants by enabling landlords to electronically submit an alternative payment arrangement. That seems to be proving positive. Would you encourage other areas to investigate that?
Absolutely. We must be innovative in all that we do so that we make it as easy as possible for everyone to administer the system. The more that can be done online, the better—that is particularly true in the case of people who live in the Highlands and other remote areas. In the Highlands, it can sometimes be difficult and expensive even to go to the nearest village, let alone to Inverness. We want to encourage the things that work well. Where that is the case, we would want to roll out the good practice. There is no need to reinvent the wheel 32 times.
On the issue that has been raised by colleagues and in evidence about to whom the universal credit payment is made, do you think that there is merit in the idea of carrying out some kind of social audit or social assessment of the household to determine who the most suitable recipient of the payment would be?
We do not want to make a mountain out of a molehill. An audit in every household would be a very expensive and laborious affair and might be subject to a lot of legal challenge. However, we need to develop a methodology for identifying where the universal credit is paid. For example, where there is domestic abuse, we need to go out of our way to make sure that it goes to the mother or wife rather than the husband. I would want to ensure that the woman gets the payment rather than the man in those circumstances. A lot of thought and more research on how we do that is needed before we get into the nitty-gritty of it, because it is quite difficult to determine and could be open to challenge.
We should not underrate the importance of transience, which is a difficulty for all such systems. Yesterday, I was dealing with a constituency case in which the constituent has had six different addresses in the past seven years. That is not entirely atypical. There is a lot of mobility leading to different addresses among the people involved. There is also transience in the sense that people move into and out of employment. Someone’s employment status this week may be entirely different from their status next week or last week. Whatever the system is, it needs to be very robust to deal with all those possible changes.
I do not have a ready-made answer to the question, other than to say that there will be a need for a robust methodology for doing that.
I was interested in your opinion on an earnings-related benefits system. Has any work been carried out by the Scottish Government to cost that for Scotland?
No. We have not done that in any detail, because clearly such a system is not on the cards at the moment. We would not have the power to implement it, anyway.
Moving on to something that interests me greatly, cabinet secretary, I was encouraged by your opening remarks on co-location when we have a system of devolved and reserved welfare provision. Margaret McDougall pursued the point. I am encouraged by the idea. Am I correct in saying that the Scottish Government would not wish to deploy budget to replicate premises, systems costs or other costs if it could in some way partner more efficiently with existing services?
Absolutely. We are spending more than £100 million a year across the country on welfare rights and mitigation. If we can find ways of spending that money more cost effectively so that the beneficiaries are the claimants, that is all the better.
Prevention is always better than cure. If a claimant can, if they wish, immediately check with somebody who is independent that they are getting the right benefit, that is better than their having to go home and go through a falderal to find out how to get the benefit rectified and appeals and all the rest of it. We want to have as little money in administration as possible and as much money as possible in the pockets of claimants.
Is that important area being explored between the Scottish Government and the UK Government?
It will be, but it has not been explored in detail yet. We are still managing the thing at a more strategic level. Once we have that done, we will go into some of the nitty-gritty issues. Officials have started to talk about some of those issues. At political level, David Mundell and I are still dealing with some of the strategic issues, after which we will get into more of the nitty-gritty.
I have one question for clarification, in relation to an issue that you raised on the bedroom tax. As you know, we took evidence on that and heard from local authorities. Their evidence chimed with the points that you made about additional costs being incurred. You spoke specifically about the danger of increasing the cost for those who are evicted. However, there are additional costs in the administration of the discretionary housing payment system for mitigating the bedroom tax. Have you taken on board the concerns from the local authorities, who have pointed out that the additional administration costs require either finding money from other budgets or transferring staff, which leaves other departments short of staff? Have you given any consideration to that and have there been any discussions with local authorities on how to address the problem?
Margaret Burgess has been in discussion with local authorities about not just DHP but the administration of the Scottish welfare budget overall. We will continue to have those discussions, although our budget this year has just been cut by £107 million in year, which means that we are struggling with the money that is available. We do not have a large secret stash of money that we can use to help everybody, although we recognise that, in some cases, there is a genuine issue.
So there is no secret oilfield somewhere.
The issue that you raise is another good example of how we are administering the Scottish welfare budget here, but housing benefit, council tax benefit, EMA and all the rest of it are administered in other ways. Strategically, in the longer term, I would like to get to a situation in which the administration is much more streamlined, so that people can see every aspect of all the benefits that they get, whether it is DHP, EMA or whatever. That would be far more cost-effective and it would be far better understood by those who claim.
I totally agree with you, cabinet secretary. Abolition of the bedroom tax would remove the administrative costs and would be the best outcome altogether.
Thanks very much for your attendance. I know that you will update us as things move forward.
Absolutely.
We will take forward our inquiry in the autumn. We hope to be able to add to the work that is on-going.
Thank you very much.
I suspend the meeting for a few minutes to allow the cabinet secretary to leave.
11:02 Meeting suspended.Previous
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