Official Report 457KB pdf
09:00
Our next item of business is an evidence session with the Cabinet Secretary for Social Justice on the Scottish Government’s budget for 2026-27. I welcome Shirley-Anne Somerville, Cabinet Secretary for Social Justice, who is accompanied from the Scottish Government by Julie Humphreys, director for tackling child poverty and social justice; Stephen Kerr, director for social security; and Adele Corner, finance lead for social justice. I thank them all for joining us and invite the cabinet secretary to make brief opening remarks.
Good morning. The 2026-27 budget invests funding of almost £68 billion to secure a fair, healthy, safe, prosperous and green society, to tackle the cost of living crisis and to deliver on the priorities of the people of Scotland. Thanks directly to the decisions that we have taken, 55 per cent of Scottish taxpayers are now expected to pay less income tax than they would if they lived in England and, unlike taxpayers in England, they will continue to benefit from free university tuition, free prescriptions, no peak-time rail fares and expanded childcare provision.
We are, of course, having to operate in a highly challenging financial environment, exacerbated by a United Kingdom budget that failed to deliver for Scotland—a budget that will not move the dial on the cost of living for squeezed households and which has left us with resource funding that is expected to grow by an average of only 1.1 per cent in real terms during each year of the forecast period, which is not enough to change the difficult fiscal position that we face.
Despite those constraints, we have again put child poverty at the heart of the budget, with a package of co-ordinated investment that includes £61.5 million for our tackling child poverty fund to supercharge action on child poverty across the life of the next Parliament, with the detail to be set out in our forthcoming tackling child poverty delivery plan, and more than £100 million over three years to support the delivery of a universal breakfast club offer for primary school-aged children by August 2027.
Meanwhile, the budget provides for an increase to £28.20 per week in 2026-27 in our transformational Scottish child payment, which has been increased by more than 180 per cent since its launch. Additionally, we will increase the value of the Scottish child payment to £40 per week for children under the age of one from 2027-28 onwards to provide increased support in the critical first year of a child’s life. The budget also sets out how the £141 million that would have been spent on our payment to tackle the two-child benefits limit will be reinvested next year to tackle child poverty, in keeping with the commitment to do so given by both the First Minister and me.
Overall, we are investing around £7.2 billion in social security assistance in 2026-27. That fully funded investment will support around 2 million people. Not only will children be kept out of poverty, but there will be support for disabled people and their carers and essential help for pensioners and others via winter heating payments.
As I set out in my letter to the committee last month, there have been a number of significant developments since the committee’s pre-budget scrutiny was carried out. Most importantly, updated Scottish Fiscal Commission forecasts reflect a number of key changes, the most notable of which is the UK Government’s welcome, but belated, reversal of the wholly unacceptable cut to personal independence payment that was announced in July last year. As a result, our overall additional investment in Scotland’s social security system is expected to fall from £1.8 billion to £1 billion by 2029-30, which is a 45 per cent reduction when compared with the June 2025 forecast.
Meanwhile, the proportion of the overall resource budget that the Scottish Government has chosen to invest in Scotland’s social security system, over and above the funding that we receive from the UK Government through the block grant adjustment, will be around 1.7 per cent each year from 2026-27 to 2029-30. Compared with the position that was set out in the medium-term financial strategy in June last year, that is a reduction of 0.8 percentage points in 2026-27 and of 1.4 percentage points by 2029-30. The updated position as set out in the SFC forecast demonstrates very clearly, in my view, that our social security investment is sustainable and that we in the Government produce costed financial programmes that deliver real benefits for the people of Scotland.
On adult disability payment, I must say that the proposals that were put forward last week by the Scottish Conservatives to overturn the eligibility criteria, which were unanimously approved by the Parliament, and to remove assistance from people with mental health conditions are wholly unacceptable, abhorrent and barbaric. I am also deeply concerned by the stigmatising rhetoric that we have heard about mental health, which completely ignores the fact that adult disability payment supports disabled people with the everyday tasks that many of us take for granted.
Importantly, the latest Scottish Fiscal Commission forecast now shows a 70 per cent reduction in the additional investment that will be required for adult disability payment in 2029-30, over and above what is received in block grant adjustments. That means that the £770 million that was originally forecast by the Scottish Fiscal Commission in June 2025 is now reduced to £287 million.
The causes of increased demand for disability benefits are analysed in a detailed report that was published last Thursday by the chief social policy adviser. The report sets out that the evidence that is currently available does not indicate that the conscious policy decisions that we have taken in Scotland to deliver a better system of disability benefits are the primary driver of increased spending. Instead, the report sets out that the two main contributors are rising ill health and the UK Government’s raising of the state pension age, which means that more people can get adult disability payment for longer in an ageing population.
Equally significant, in my view, is the “Delivering dignity?” report that was published by the Resolution Foundation in December, which explicitly stated:
“the introduction of ADP shows that improving the claimant experience is not at odds with keeping caseloads and costs under control”,
and, contrary to much of the ill-informed commentary of the previous week, that
“there is no evidence that ADP is a more leniently-awarded benefit than PIP”.
A value-for-money Scottish social security safety net, which all of us might need at some point in our lives, is something that, in my view, the Parliament should be enormously proud of—I certainly am.
I thank the convener again for the opportunity to take questions from the committee this morning.
Thank you very much, cabinet secretary. We will move straight to questions.
Good morning. Audit Scotland recommends that the Scottish Government should have a clear strategy to manage risks to the Scottish budget that arise from UK Government decisions on benefit spending. Given the last-minute U-turns that have been made, I am not clear about how you strategise for that. In evidence, Audit Scotland did not seem to be clear on that either. Can I have your thoughts on that point, please?
There is no denying that the Scottish Government’s budget choices are impacted by our exposure to UK Government decisions. In my area, that is particularly relevant to benefit expenditure. There is continued uncertainty in many areas of UK benefit expenditure. There is the on-going Timms review of universal credit, which, although fully reserved, has an impact on people in Scotland.
There is a real challenge in terms of the impact on both the budget and our people. In the Scottish Government, we need to deal with that by attempting to work with the UK Government and by asking it to give us as much notice as possible of changes, to allow us to make planning assumptions as best we can. That is challenging, and we have seen examples—I am sure that I do not need to rehearse them to the committee—of where that has not happened.
We must also look at aspects that are within our gift, including the fiscal sustainability delivery plan and the medium-term financial strategy, to ensure that we are challenging ourselves on the funding. We must look at the Scottish Government budget in the round to ensure that we are always content that we have a balanced budget. That is exactly what we are providing to the committee today.
We have robust in-year financial mechanisms and management practices. It is a challenge, though, when we have a system in which the vast majority of benefits are still reserved to Westminster. It would be fair to say that the Scottish Government’s view of social security being a human right does not appear to be shared by the previous or current UK Governments.
It is challenging, but we are still managing to set a balanced budget every year. The U-turn on PIP gave us the Timms review. What influence are we having on that review? Is it alive to the impact that it could have on devolved benefits?
I welcome my on-going discussions with Stephen Timms; indeed, I spoke to him just yesterday about the work that the review is undertaking. It would be fair to say that he, as a minister, has endeavoured to keep this Parliament as up to date as possible. However, the challenge, when the review is reaching its completion and decisions are starting to be made, is how much prioritisation and importance will be given to the impact on Scotland.
I welcome the fact that Stephen Timms is accessible to me for discussions. However, if I put his personal work to one side, I am concerned overall that we have not had good working relationships with the UK Government on other benefits and other changes that have had a significant impact on Scottish Government budgets.
Good morning. The Scottish budget increases Social Security Scotland’s fiscal resource budget by around £40 million. In addition, a response to a recent parliamentary question indicated that 187 staff are moving from the Scottish Government to the agency. We have previously discussed that in the committee. What else is included in the £40 million resource budget increase?
I will bring in Stephen Kerr in a minute, because that issue has a direct impact on what has been happening in his directorate, with staff moving to the agency.
This is a process that the committee would expect to happen. The evolution of social security will continue, but the devolution of it under the programme is coming to an end. We would expect the ways of working in the Government to change; some work that was previously in the Government now needs to move to the agency. Stephen Kerr can give examples of that.
Carol Mochan is right to say that the £40 million concerns more than just people. If you think about it as assets—
That is what I was trying to get at.
We have a number of contracts in place. For example, our testing contract is worth around £10 million. When we are making changes and introducing new benefits or system upgrades, that allows us to test all of that.
We will be launching the final suite of benefits in March, and there are support arrangements in place for what we call hypercare, which is to ensure that, after those benefits go live, they are operating correctly.
We have other systems that talk to the main operating system. Agents raise tickets in Social Security Scotland on another software platform, for which there are licence costs. The cost of all those assets has been held in my programme. With the programme coming to an end, that will move over to the agency.
That is helpful. You touched on the live running and digital development functions. The policy and delivery function within the Scottish Government has a budget of £32 million in 2026-27. Can you explain that? Does that also involve your department?
09:15
Yes. That is essentially the budget that I am left with at the end of the programme. Around half of that goes on core elements of the social security system that the Government maintains responsibility for, including funding for the Scottish Courts and Tribunals Service and the independent advocacy service. We also have new burdens and obligations to local government. Those arrangements do not transfer to the agency; they stay with me and I have to fund them, plus we retain the policy-making function in Government. When all those things are put together with a number of other recharges within the Government, I am left with a budget of around £32 million.
That is helpful—thank you.
I have one final question at this point. The spending review sets out cumulative savings and efficiencies for Social Security Scotland of £27 million across the spending review period. Is that proportionate? Are you content with that within the large scale of the social security budget?
Public service reform and the savings that are set out in the spending review are important. The savings that are set across the spending review period apply to the whole social justice portfolio, not just to Social Security Scotland. However, given the size of Social Security Scotland, we expect it to play a major role in making those savings.
It is important that we continue to look at how social security will evolve. We are looking at a number of areas in which that will mean a better service for clients and a more efficient way of running government. For example—it is probably easiest if I give examples of what we have done in the past—automation of payments means that people do not have to apply for best start grants and best start foods separately, because they do that as part of getting their Scottish child payment.
The savings fit in with our ability to look at social security in the round now that the benefits have been devolved and to make sure that we continue to challenge ourselves to improve the system for the benefit of clients and by running a more efficient and effective system. I am sure that ministers will—I certainly will—continue to challenge themselves to see how much further we can go than what has been set out, because there is a dual benefit to making such changes. We have been set a reasonable and proportionate savings challenge and it is important that we address that because, through that, we will deliver a better service for clients at the same time.
At our meeting on 22 January, David Wallace told the committee that Social Security Scotland can drive public service reform and efficiencies. He referred to its new payment platform and to data sharing, for example. How will you evaluate whether that happens and whether it contributes to efficiencies across the whole of the public sector?
I will give some examples of how it has happened in the past. Some of it will be obvious and demonstrable, such as a change to automation of payments, for example, rather than separate applications. Much of it will be to do with changing Social Security Scotland processes to ensure that cases are dealt with automatically rather than requiring manual input at some point. It is important that we look at all the changes that are being made.
Ministers and officials within Government, and particularly within the agency now that the programme is coming to an end, have complete oversight of that. We are alive to the changes and the releases that are being put into the social security system that will drive those changes. Through the Government’s investment in major releases that impact the running of the live social security system, we will see some of the changes coming through.
How we use data sharing is really important. An example that demonstrates the potential in that regard is how Scottish child payment information can be used for free school meals. That is an example of how information that the national Government holds, through Social Security Scotland, can assist a local authority in ensuring that those who are eligible for free school meals get those free school meals. It is an example of how we can tie in our work on tackling child poverty with our data-sharing work to ensure a more efficient and effective system and to help those who are eligible for benefits to get what they are entitled to.
I have a couple of quick follow-up questions. First, you talked about free school meals, but could information be shared with local authorities in relation to other benefits, such as school uniform grants? We have had conversations about data sharing on numerous occasions. We are a fairly small country, and it can put people off if they have to keep reapplying for different benefits and grants. How far can we take data sharing?
Secondly, if I may say so, you gave a very good political answer, but I am still not quite sure how we will measure the impact. What process is there to ensure that we know whether, in three years’ time, the system is working better than it is now?
On the first point, we are in the foothills of how we can and should use data sharing in the future. A lot of work is going on in that area, not just in relation to child poverty. I have been doing important work with my officials and the agency to see how we can make the lives of disabled people and carers easier. We can work with clients in the social security system to take away barriers. Many of those barriers do not relate only to Social Security Scotland; we require local authorities to work with us. In the main, they are eager to do so, because they see the real benefits for them.
I am sorry if what I said sounded like a cynical politician’s answer—I usually try not to give them, particularly to you, Mr Balfour—so let me try again. It is important that we consider the impact on people. We should look at whether we have made things easier by taking away a barrier. Does someone need to apply for another benefit, or have we taken away that barrier?
That ties into how we evaluate the system. For example, how can we build in our evaluation on tackling child poverty? Perhaps Julie Humphreys can assist me in that regard.
It is important that we evaluate the impact of different policies across the tackling child poverty programme. As I have said to the committee previously, we ensure that we have the data and information for each element, and we use that to cumulatively assess the overall impact across the piece. We also have an evaluation strategy built into the public sector reform programme.
Alongside the third tackling child poverty delivery plan, which we will publish before the end of the parliamentary session, we will publish a renewed evaluation and measurement framework in order to be transparent about how we will evaluate the impacts and to determine what we think good impacts might look like from our interventions across the piece.
That is helpful.
I want to cover another area quickly. When do you intend to introduce regulations that will enable Social Security Scotland to estimate the levels of fraud and error in the devolved benefits system?
That is an area that the committee discussed in great detail when it considered the Social Security (Amendment) (Scotland) Bill. From memory, the committee was keen for us to consult before implementing such regulations, because it had a degree of concern about how the audit function would work. I committed to undertaking a statutory consultation before the provisions in the Social Security (Amendment) (Scotland) Act 2020 are implemented. That process is well advanced. I am keen for the consultation to begin before the Scottish Parliament elections, to allow stakeholders to have their say so that we do not lose time in the purdah period and the election period.
The findings of the consultation will determine the timetable for the secondary legislation. Obviously, that will be for the next Administration to opine on, but, for my part, I am aiming for—and we are on track for—the statutory consultation to be launched before the purdah period begins, to allow that work to continue.
Thank you.
As we know, the Westminster Parliament debated the bill to remove the two-child limit from universal credit. It took a while to get to that stage, but we got there, which is welcome.
However, because the UK Government did not remove the benefit cap, many families with more than two children will still be denied that support. I am pleased that it is the Scottish Government’s policy to mitigate the benefit cap, but how is that reflected in the budget? As I understand it, the policy will cost more in discretionary housing payments, as more families’ benefits will be capped.
There will be an impact on the Scottish Government’s budget, because we will continue to mitigate, as far as we possibly can, the benefit cap in full. It is welcome that the UK Government finally said that it would scrap the two-child limit. That is an important policy that needed to be put in place, but, because it has kept the benefit cap in place, that means that there will be children out there who will not benefit from the lifting of the two-child limit.
That is not a situation that we want to be in in Scotland. As a result, we will have to increase the amount that we spend on mitigating the benefit cap, to ensure that everyone benefits from the lifting of the two-child limit.
It is really important for DHPs to get to families who are impacted. Access to DHPs used to be through housing benefit, which meant that councils were clear about who needed it, but now that the cap is applied to UC awards, there is a need for effective data. We have already spoken about how important it is that data is shared. Do you have a sense of how that process is working? How could things be improved?
It is a challenge. That is one of the reasons why, rather than the Scottish Government mitigating the effects of the benefit cap, it would be more effective and efficient for everybody for the benefit cap to be scrapped at source. That way, we would not be in the situation that we are in at the moment.
As I said, we are putting more money into mitigating the benefit cap—I think that the figure is about £8 million. The challenge is to ensure that everybody who should benefit from that mitigation does so. We need to work closely with local authorities as we go through that process. Clearly, discretionary housing payments are made through local authorities, and we will continue to work closely with them on that.
We have received suggestions about how the money that is no longer needed for mitigation of the two-child limit should be spent. What are your thoughts on that? People such as John Dickie have advocated increasing the Scottish child payment.
As is to be expected with any Scottish Government budget, there are myriad opinions about how the money could be spent. I appreciate and understand the views of those who feel that we should have spent all that money on further increasing the Scottish child payment. We are, of course, increasing that payment to £40 a week for children under one, so there will be a Scottish child payment premium coming in.
The Government must look at what else we can do, not only in social security but in other areas, to tackle poverty and to assist families. That is why, for example, money is going into whole family support and the tackling child poverty fund to ensure that we are looking at some of the other drivers of poverty reduction in addition to income from social security. There are different policy proposals in the budget, further details of which will be given in the tackling child poverty delivery plan that we will launch in March.
Whole family support is an exceptionally important way of assisting families and providing support not only with income or income maximisation but in whatever way a family needs and at the time and in the place that they need it. That is coming across strongly from a lot of work that we are already doing in the fairer futures partnerships and we are seeing a real difference in the changes that we can make. That is also an important way of tackling poverty, in addition to the work that we are already doing on social security.
That is most welcome.
Good morning, cabinet secretary. I will reflect on some of the evidence that we have heard during our budget scrutiny. We heard from a variety of anti-poverty and child poverty groups. When those groups come to Parliament, they say really positive things about the Scottish Government’s investment in tackling child poverty and they commend direct action that is making a real difference, but they also talk about the statutory child poverty targets and they want clarity about what a credible pathway to delivery on those targets would look like. Will you say a little more about where there is strong success and where we are falling a little short of those targets? What big ideas are under way to drive us towards meeting those targets?
Campaigners are absolutely correct to continue to push the Government to go further in that area. We are conscious of the 2030 targets and are determined to meet them. The work that we are doing as we draft the tackling child poverty delivery plan that will be published in March is based on that credible path.
I go back to the point that income from social security is an exceptionally important policy driver within the delivery plan, but it is not the only such driver. It is important to look at whole family support, employability and transport, and at the areas in which people are telling us about the difficulties that they are having or the barriers that they face in getting into employment or being able to access support services in the public sector.
There will be further detail in the tackling child poverty delivery plan regarding whole family support and how we use the tackling child poverty fund to deliver further on that.
My next question was going to be about where not only social security payments but a range of other services and supports sit in the context of the Scottish Government’s spending review. Are you confident that the spending review will take account of our ambitions to meet our 2030 targets?
The social justice portfolio budget that I have is an exceptionally important part of the Government’s work to tackle child poverty. The portfolio includes social security and the fairer futures partnerships, and it has important oversight right across Government. I appreciate and understand the focus on how we are spending the money that we were going to use to mitigate the two-child limit. The details of that have been laid out in the budget.
Money elsewhere in the Scottish Government budget—outwith my portfolio—is also an important part of this, whether it is for work on breakfast clubs in the education portfolio, on employability in the Deputy First Minister’s portfolio, or on other things. Our oversight work in the Cabinet sub-committee on child poverty that is chaired by the First Minister is an important way that we challenge ourselves right across Government to look at how not simply my budget but every budget can impact on child poverty. That is how I have the reassurance, when looking at the spending review, that every cabinet secretary—it is not just me—has been looking at the impact that we can have on delivery against the 2030 targets and the role that we can play in drafting the plan that will be published in March.
That is very helpful. Work across Government is important, but so is work between different Governments. I get your frustration that Scottish Government statutory targets can be impacted by decisions that are taken elsewhere in the UK, which can knock strategies off course. One Parent Families Scotland told us that the child maintenance service, which is a UK reserved responsibility, presents a significant issue for a lot of low-income, vulnerable families. One Parent Families Scotland has specifically asked whether the Scottish Government would consider funding advice services. Such services are not necessarily the Scottish Government’s responsibility, but it is an idea about working in partnership or in a complementary way on this.
I put it on the record that I know that we also have a statutory duty to maximise the uptake of devolved benefits. I know that the cabinet secretary is not blinkered to the opportunities to maximise the uptake of benefits, including reserved ones, across the board, even though neither that nor the child maintenance service are Scottish Government responsibilities. What added value can the Scottish Government give to assisting one-parent families to get the money that they need and deserve?
It is disappointing that the UK Government’s child poverty task force did not commit to learning from the project that was taken forward by Fife Gingerbread and One Parent Families Scotland, because a tremendous amount of work went into that. It is a reserved area, so I would have hoped for better shared learning to have come from the UK Government’s child poverty task force when it concluded, including through a discussion with us about what could be learned from the work that was done.
Child maintenance is reserved. Some changes within the UK strategy have been announced, but they fall short of the transformation that stakeholders were looking for. We are still engaging with One Parent Families Scotland and Fife Gingerbread to learn from the action that they have taken to date and to understand whether we can do more.
Within the Scottish Government’s budget, we include provision for advice on welfare, debt, income maximisation and so on, so there are ways in which we can assist people. However, the issue that you raise is an example of how poverty can continue for some families because of a reserved policy decision. Another issue that we heard about only yesterday, when we had a meeting between the Cabinet and disabled people’s organisations, is the failure of the access to work scheme to assist disabled people expeditiously. That has caused disabled people real difficulties in either staying in employment or taking up an employment opportunity. There are examples of where a devolved system may assist people—and we do so as much as we can, and with the best will in the world. However, if the underlying reasons are with the part of the system that is reserved and run elsewhere, it is very difficult to lift particular families out of poverty if changes are not made there.
Notwithstanding any underlying structural issues and criteria for how the child maintenance service and other aspects of the system work, is the Scottish Government and its local authority and third sector partners well placed to offer tailored advice and support, even though that is not their responsibility? If the UK Government were to provide a quantum of £X million—I will let you fill in the blank for what the X would be—for the Scottish Government and its partners to pursue a strategy on advice, is that the kind of innovation that you would happily discuss with it, notwithstanding the fact that you would rather just control everything here in Scotland in the first place?
I will discuss any innovation with the UK Government, but the examples that we have seen so far illustrate that the UK Government makes decisions about issues without any consultation with the Scottish Government. We offered to run pilots up here in Scotland to assist with universal credit and childcare, and we have offered up learning that we have had in Scotland. It takes two people to have such conversations, and we can get only so far by writing letters and submitting evidence, as we did to the task force. There does not appear to be evidence that the UK Government is willing and able to have those conversations.
If the UK Government would like to prove me wrong on that, I would be delighted to take a call from any UK Government minister who wishes to run a pilot or to do such work here in Scotland in a joined-up and collaborative manner. That would be a first, I think.
I may agree with those sentiments, but I am of course scrutinising the Scottish Government. What I am hearing is that the Scottish Government remains open to being constructive in this area, despite the fact that it takes two to tango, as you have said, and we are not getting there, thus far.
I will stay positive in my final question, however. The Child Poverty Action Group suggested that
“there is scope for serious joint working”—[Official Report, Social Justice and Social Security Committee, 15 January 2026; c 25.]
between the Scottish and UK Governments in a range of areas. CPAG gave the examples of housing and childcare. I will not ask you anything specific, but do you wish to reflect on that suggestion? Is there anything that you would like to put on the record in that regard?
There are clearly areas where we could have done joint work, and that was demonstrated as we went through the process. There was a UK Government task force on child poverty, and there were a number of areas where we could have worked together. There is an entire list of areas where we asked for the UK Government to take action and to work with Scottish ministers. It is unfortunate that that is not how the set-up works at the current time.
However, our door always remains open, because it is clear that the systems need to work better together to get people out of poverty. We are very willing to work on this, whether with the UK Government, other parts of the public sector or the private sector. There are possibilities, and I hope that the UK Government will take up those opportunities as it moves to implement its child poverty strategy.
I appreciate that tone, cabinet secretary. I have no further questions.
Carol Mochan has a supplementary question.
I am sorry if I missed this, but I have been through my notes and would like some clarity. On scrutinising the budget, I think that I am correct that there is already a statutory duty for the Government to increase benefits in line with inflation and that there is some allocation from the two-child limit funds that the Scottish Government has received. Is that how you allocated money, or did you already have the money to uprate?
09:45
As we laid out in the budget, when we looked at how the two-child limit mitigation money will be spent, it includes money for the new Scottish child payment premium for under-ones, as well as additional spend on devolved benefits in mitigating the benefit cap, which Marie McNair talked about, and the increase in spending on the Scottish child payment with the inflation in case load.
Good morning, cabinet secretary. I want to spend a bit of time exploring the independent review into ADP and the on-going ADP case reviews. In response to the committee’s pre-budget report, the Scottish Government said that it will
“explore how reporting on ADP spending can better reflect its role in supporting disabled people”.
Will you expand on what that work will involve?
It is important that we undertake analysis of the drivers of ADP expenditure. I said in my opening remarks that work on that was recently published. Many of the drivers are reflected across the UK, not just in Scotland. I do not think that it is surprising that the increase in the state pension age was one of the main drivers that was identified.
The agency is doing work on ADP to ensure that we are keeping an eye on case load numbers and the number of awards as a percentage of applications, and so on. Work is also being undertaken by Professor Linda Bauld and others to analyse the drivers of ADP expenditure, which will assist us with the forecasting of case load as we go forward. Again, I hope that that work will inform a greater understanding of why there has been an increase in ADP, so that we can perhaps have a more civilised conversation than we have had in recent weeks about the level of benefits in Scotland.
I agree with you. Finding out that one of the drivers was the increase in state pension age was a bit of a surprise; I had not even considered that. It was interesting to see that in the report.
What is the Scottish Government’s estimate of the cost of implementing the recommendations of the independent review of ADP? To what extent will cost be the deciding factor in the Scottish Government’s response to the review?
We will be able to estimate some of the costs of the recommendations of the ADP review. My officials are currently looking at that because, inevitably, the costs are based on a lot of assumptions. I am keen to be as open as we can about some of those costs so that people have a better understanding of the scale of them when we are discussing them. I have asked officials to see whether there is more that we can do, so that when we respond to the Edel Harris review, we can put some of the information into the public domain. That is useful only if I can assure myself that, in putting out those figures, we can be clear about the assumptions that we have made and the fact that they are forecasts and assumptions and so on. We want to have a sensible conversation about the issue, so I need to look carefully at the estimates to see whether they are robust enough. However, it is important, if at all possible, that we can move ahead with that.
Clearly, when it comes to cost, some of the most expensive aspects of the Edel Harris recommendations come in the section that talks about changes to eligibility. That is one of the key drivers. When we are discussing changes to eligibility, it is sensible to have an eye on costs. Cost would not be the only factor, but the Government is, rightly, always challenged on whether our social security spend is sustainable and whether we have a commitment to what we have in place at the moment, and we would not want to make further commitments to anyone unless we were able to carry those through sustainably.
Those are the types of issues that I am wrestling with as we draw to a conclusion the Government’s response to the Edel Harris review, to see how much detail we can give.
That is helpful. One of the key themes in evidence that the committee received was that ADP does not always reflect some conditions, such as more unusual or fluctuating conditions. You have mentioned the eligibility criteria, one of which is the over 50 per cent rule. The University of the West of Scotland has shared experiences of people with premenstrual dysphoric disorder, which is one of those more unusual conditions. There is evidence that there is limited awareness of that among case managers. Is there money in the budget for training and guidance for case managers to deal with more unusual cases? Is the over 50 per cent rule being looked at in considering Edel Harris’s recommendations?
I appreciate that people want reassurance that our system can deal with fluctuating conditions. We made alterations to our system to make it more person centred in order to allow fluctuating conditions to be better served through the application process and the work that is undertaken in Social Security Scotland when decisions are made. However, I appreciate that there is concern about that area. We are right to continually challenge ourselves about whether the social security system is delivering for everyone as we intended it to do.
I know that there is concern, particularly around rare conditions or disabilities that a case worker might not come across very often. That is why it is important to continually look at the training and knowledge of case workers and to have the support of others in the agency who can be brought in to assist with decisions in difficult cases.
I will bring in Stephen Kerr on that.
Colleagues in Social Security Scotland have spoken to the researchers, and some links are being made, which is good. We have done some awareness sessions for client advisers and we have more planned. We are keen to link in more closely with the stakeholder community to pick up such areas.
For the record, I point out that a lot of activity happens in the agency on things such as keeping abreast of fluctuating conditions and making sure that the right discussions happen internally between the health professionals we employ, the agency’s chief medical officer and front-line client advisers. An on-going conversation happens regularly in the organisation, which allows us to focus on the areas that come to the surface more than others.
That is helpful and very reassuring.
Finally, the fiscal sustainability delivery plan set out measures intended to have a positive impact on public finances, which included consideration of whether ADP reviews are operating as intended. Cabinet secretary, do you expect the review of ADP reviews to identify any potential savings? How will that be balanced with ensuring that the principles set out in the social security legislation will still be applied and adhered to?
The important point is that last point. The review of reviews, if you like, was a test against the principles in the Social Security (Scotland) Act 2018, which, I remind the committee, everyone in the Parliament signed up to. It is very important that the principles in the 2018 act are adhered to. That does, of course, include ensuring that the system is efficient and is delivering value for money, which are also important principles.
The work that has been undertaken wraps up the Edel Harris recommendations with the work that we committed to do as part of fiscal sustainability, to ensure that we look at reviews in the round and test them against the principles that we set out in the 2018 act, which everyone voted for, and to ensure that the system is delivering value for money and efficiency.
I am in the final stages of signing off the response to the Edel Harris review, which will wrap up the thoughts on the review of reviews as well. We are running a number of pieces of work concurrently, and I thought that it made little sense to respond on each one individually; I would rather respond to all of the points together.
Thank you.
I remind members that I am in receipt of ADP.
Cabinet secretary, I fully agree with the comments in your opening statement about the Conservatives. I have written to the Conservative leader to ask why he said what he did, but I am still waiting for a response.
I have a couple of quick questions. You said that you are wrapping up all the reviews in your response. My understanding was that that might happen at the end of January, but we are now into February. When are we likely to see that response?
I have made it clear—and I have said this to Edel Harris—that, because I have asked officials to look at the review of reviews as well as the Edel Harris recommendations, we will continue into around mid-February. I have made her aware of that slight delay. That is to ensure that we have a response from Government that deals not only with her report but with other matters. We anticipate that happening within the next couple of weeks.
That is very helpful.
I have a broader question, although I might be going down a bit of a rabbit hole. If we go all the way back—you are too young, cabinet secretary, but for those of us who are slightly older—
That is very kind, Mr Balfour.
Indeed. If we go all the way back, we see that the predominant reason why the original payment was brought in was to help disabled people into employment. Do you think that is still the main reason for ADP, or do you think that it has evolved and is now simply a benefit for disabled people because they have extra living costs and that it is not necessarily linked to employment?
At the joint meeting between the Cabinet and disabled people’s organisations yesterday, a conversation took place around why PIP was initially brought in. I was not involved at that time, but it was pointed out to me and to the First Minister that the discussions in the House of Commons at the time were around the additional costs of having a disability or a long-term condition.
It is important that we continue to remind people that ADP is available whether they are in work or out of work. Indeed, I heard directly from people yesterday that ADP had helped them to get work or sustain employment. I am keen that nothing should suggest that if you are in work you can get ADP and if you are not in work you cannot get it, or vice versa. That would be unhelpful. This is about recognising additional costs and the fact that ADP might help people to sustain or get into employment.
10:00
We are coming to the end of our questions
In a debate in the chamber, preventative spend was touched on by the Cabinet Secretary for Finance and Local Government. What would the cabinet secretary consider to be the key linkages between health and the levels of spending on social security? How is that reflected in Scottish Government policy?
There are important linkages. It is an ambition of the Government to reduce health inequalities and support people to live longer and healthier lives. There are a number of reasons why health inequalities are present in our communities. There is a challenge around the number of low-income households and those who are finding life particularly challenging financially, where health inequalities are brought to the fore. Poverty is often a driver of ill health. It is important that we tackle poverty, not just because it is the right thing to do, but because it is part of the way in which we can tackle health inequalities.
The population health framework, which was published in 2025, has a focus on prevention. The framework is an important part of our work to galvanise action throughout the system. It talks about
“enabling access to income maximisation for families … achieving consistent delivery pathways, including in universal services”
and
“strengthening the NHS’s contribution to maximising the incomes of service users, with a focus on families at greatest risk of poverty”.
Those are some of the ways in which those aspects are tied together across Government.
You have gone into the details of the pilot for tracking preventative spend. How will the pilot encompass social security spending?
We announced in the spending review that, in early 2026, with a number of partners across the public sector, we will pilot an approach to tracking preventative spend across the Scottish budget. By the summer of 2026, the learning from that will provide the basis for a comprehensive understanding of preventative spend throughout the Scottish budget, with a view to integrating that approach into the on-going annual reporting cycle. The preventative spend pilot is still in development, and I am sure that the Cabinet Secretary for Finance will keep Parliament updated as that work progresses.
Thank you very much.
We will move on to third sector funding, on which we have carried out some budget scrutiny. What do you think has been learned from the multiyear funding pilot for the sector? From the evidence that we took from various witnesses from the sector, it was clear that it was high on their agenda. Secondly, what is the scope for extending it to more organisations? Can you touch on those issues, please?
It is something that we are very keen to look at, to see how it can be further expanded when we are looking at new funding. I would point out that the funding that the First Minister announced for the third sector as part of the whole family support package is a multiyear commitment, and we will look at what more we can do to expand multiyear funding.
Clearly, the fairer funding approach covers a number of areas, one of which is multiyear funding. It is very important; indeed, the feedback that we had from the pilot that we undertook showed that, as we would have expected, it made a difference to the third sector organisations involved by giving them greater certainty.
This financial year, it has been more challenging to look at expanding multiyear funding or other aspects of the fairer funding principles because the UK Government budget was so late, which has, in turn, made the Scottish Government budget late. As a result, it has been exceptionally difficult for the Government to be able to provide certainty to the third sector.
Therefore, a lot of the work that I and officials—not just in my area but across Government—have been doing has been on the timely notification of grants and on ensuring that letters of comfort go out to organisations as soon as possible. Indeed, we did that immediately after the budget was published. It is an on-going process—obviously, it could not be done for every organisation on the day of budget publication—but we are endeavouring to do all that we can to assist with the timely notification of grants. That is, of course, another important aspect, alongside the multiyear funding asks that we have from the third sector.
You have, I think, just answered my next question. We heard from third sector organisations that the proportion of grants, and when they would be notified of them, represented a huge challenge, so it is reassuring to hear about the letters of comfort.
Just to wrap this up, can you tell us how a preventative approach in third sector funding will help to stop people reaching crisis in the first place?
It plays an exceptionally important part in our work not only to tackle child poverty but to assist people, and it is exactly why the First Minister has placed such importance on the whole family support package and the role of the third sector in that. He and I—and, indeed, other cabinet secretaries and ministers—have visited a number of examples of the third sector delivering in our communities what is, in effect, whole family support. If that type of support can be provided to a family before they reach the point of crisis, rather than at the point of crisis, it will be far better for them, and far better when it comes to the effective use of public services.
I hope that all of us will conclude that the best thing that we can do is help people as early as possible, whenever they need it. Whole family support is an integral part of that, and the third sector is an integral part of delivering that support.
Thank you very much. That ends our questioning—[Interruption.] Oh, I think that Jeremy Balfour wants to have the last word.
As always, convener.
I do not want to end on a negative note, but I note that one of the things that was initially cut from this year’s budget was the investing in communities fund. I appreciate that the Government has reversed that cut and that the fund will continue for a year. What discussions did you have with the Cabinet Secretary for Finance and Local Government on that?
You have spoken about giving support at the earliest point. Two or three of the organisations working in my region that have contacted me are trying to do that. There was no warning. If that decision had not been reversed, they would have had to close a number of programmes before the summer.
What input did you have into putting the whole jigsaw together? The funding is being extended for only one year, so how would you suggest that organisations should go about finding that money somewhere else?
Forgive me, Mr Balfour, but that fund does not sit within my portfolio—it sits within the Deputy First Minister’s portfolio—so I do not have the details to hand, but I know that Richard Lochhead recently answered a question about it in Parliament.
That happened yesterday.
He answered a question about those transitional arrangements, which I hope gave some detail.
The Government recognises that it is important to communicate with organisations as much as possible when we are looking at budget decisions. The timing of the budget made that exceptionally challenging, and this is one example of the need to have a solution to present to organisations. I hope that Mr Balfour will be satisfied with a further answer in writing, either from me or from one of the other cabinet secretaries with responsibility for the transitional arrangements that are in place.
Thank you for that.
We will now have a brief suspension to allow for a change of officials. Thank you for your contributions today.
10:11
Meeting suspended.
10:15
On resuming—