Chamber and committees

Public debt, which is debt that is owed to public authorities, including local authorities, is a growing issue for struggling households. Unlike private debt, it is not covered by Financial Conduct Authority regulation, which compels lenders to take measures to ensure that debtors are treated fairly, with consideration given to vulnerabilities.

Amendments 22 and 23 provide the committee with two options for addressing gaps in regulation. They would require ministers to provide regulations asking for local authorities that are pursuing debt to engage in a reasonable manner and with due regard to the position of the debtor. In particular, amendment 23 includes a provision that would ensure that debtors would get help to maximise their income through identified income maximisation services, which would help with servicing the debt that is owed to local authorities and would help debtors to get free of debt by ensuring that they fully accessed their potential income.

Amendment 22 is a more detailed version of the pre-action requirements and is based on rent arrears regulations. Amendment 23 offers a more simplified approach that might offer wider flexibility to ministers in that space, and it includes the aforementioned detail on income maximisation.

I believe that it is important that we have this debate about how to support people in this area. I have lodged my two amendments to provide options to the committee for discussion.

We were looking at where the bulk of public debt falls, which is on local authorities, and we found, through some of the work that we have looked at, that there are often variances in how local authorities pursue debt and in the support that they give to people who require to repay that debt. Organisations such as Aberlour Child Care Trust have piloted a number of such schemes across Scotland, including in Dundee, to address how local authorities might interact with people differently in that space. In the light of that work, we were keen to bring forward regulations that ensure that there is a more uniform approach among local authorities.

On Mr Whittle’s point about singling out or targeting local authorities, I do not think that that is the intention. It is about public debt more broadly, but it is also about the fact that the lion’s share of debt that is collected—whether council tax, housing rent or school meal debt—is collected via local authorities. That is why the burden falls so heavily on local authorities.

That said, we recognise that the regulations would come with a potential financial implication for local authorities because of what they seek to do, and we would be keen to push the Government on the support that it offers to local authorities in that regard, as it has done with things such as school meal debt.

As I have said, the policy intent is to provide for regulations on actions that local authorities must take prior to pursuing debt that is owed to them and to require ministers to make provisions so that the debtor is aware of what is going to happen and has full support to maximise their income prior to the debt being collected.

Public debt is a significant and pressing issue in Scotland. As I mentioned, Aberlour has done a huge amount of work on the issue, and it highlighted in 2023 that 55 per cent of low-income families in Scotland that are in receipt of universal credit had at least one deduction from their monthly income to cover debts to public bodies.

Amendments 22 and 23 will begin the process of ensuring that public debt and debtors are treated fairly and with the same consideration that is required in relation to regulations on private lenders. The amendments seek to make the process around public debt collection fairer by creating more space for regulations that ensure that local authorities provide debtors with adequate information on the nature of their debt and the support that is available to them through debt advice packages. Similar actions were taken on rent arrears through Covid legislation, and these amendments are very much based on that.

Particularly important, given the scale of public debt, is that the duty to engage with income maximisation services would greatly help people who are in debt to boost their incomes and start to get out of a cycle of problem debt, and it would help local authorities to create more income for families to service the debts that they owe public creditors.

I move amendment 22.

On the basis of what I have said, I seek to withdraw amendment 18.

Amendment 18, as amended, by agreement, withdrawn.

Amendment 19 not moved.

Following on from the fair funding review that I mentioned earlier, two recommendations have been progressed, including a commitment to notify by the end of March organisations that are going to be in receipt of two-year funding as part of the pilot. Can the minister say anything about the progress on that and whether that target will be met?

I thank Kate Forbes for securing today’s debate. For all of us in the chamber, it is always a pleasure to be able to highlight and speak about the valuable role of Scotland’s third sector in our economy and in our society. Kate Forbes set out a number of the challenges in a very considered opening speech.

I know well the impact that the third sector has on the ground, working with individuals across Scotland. Most of my career before coming to the Parliament was spent working in the third sector. I declare an interest in that regard, having worked for Enable Scotland, as colleagues probably know, before my election to the Parliament. I was able to see up close the work that it and other third sector organisations do, particularly in the learning disability and social care space.

When we think about the third and voluntary sector, it is often such engagements that come to mind. We have already heard a number of examples from across Scotland in the debate. That is how third sector organisations, through their interactions, have the biggest impact on individuals, communities and society.

When we think about the provision of support services to people in our communities, we often see the third sector going above and beyond with its delivery and being praised for its high standards. When looking at social care services, The BMJ found that regulated social care services in the third sector are frequently of a higher standard than those in the private sector and that people often choose to receive care and support from third sector organisations that they trust and that are rooted in their local community.

There are other examples of that connection and trust fostering relations. Organisations such as the Outward Bound Trust equip young people in communities across Scotland with skills for life and engage them in community projects such as the Mark Scott leadership for life award. MSPs have reached a consensus on securing funding for that project for the coming year, following strong cross-party work, and we hope that that will continue. Countless third sector organisations across Scotland need and deserve support and are at the forefront of our minds during this debate.

Kate Forbes’s motion rightly highlights something that we do not consider nearly as much as we ought to, which is the economic impact of such organisations. The SCVO’s sector statistics for 2022 estimated that 46,500 charities, community groups and social enterprises were active in Scotland, employing 135,000 paid staff, supported by more than a million volunteers. They had an estimated turnover of £9.2 billion and spent more than £8.8 billion during that period. That is a significant economic footprint, which other reports—not least the work by the Royal Society of Edinburgh, which was referred to by a number of speakers—have also exemplified.

We have heard about the importance of ensuring that the third sector continues to contribute to our growing economy. We can do that by ensuring that the sector has certainty in planning, which largely means knowing where resources will come from. It is also important that funding is fair and that its structures work for the organisations. For those who have not already seen it, I point to the SCVO’s list of fair funding asks of the Government. It calls for multiyear funding, uprating and better communication and dialogue about funding awards. We should reflect on all of that, and I hope that the minister will say something in her summing-up speech about the progress of the Government’s fair funding review, because the SCVO is keen to see progress on that.

It is clear that we must ensure that the third sector is at the heart of Scotland’s economy, as a considerate and respected partner. We realise the potential of the third sector, which Kate Forbes’s motion rightly highlights, and that it can continue to make a huge contribution to Scotland now and in the future. I think that everyone here agrees with that, but we must do more to support charities across Scotland.

If there is further information, that would be helpful to the committee.

Does anyone else have a view, based on the work that you are doing with other groups?

Good morning to the panel. Following on from that point, I am interested in how the current process is working in transferring people from personal independence payment to adult disability payment or child disability payment. How quickly is the authorisation process working for the people who are being transferred? Does anyone have views on, or insights into, the current process?

It is a pleasure to open the debate on behalf of Scottish Labour. I welcome the chance to highlight the report to Parliament and to highlight the important role that improved parental employability has to play in our fight against child poverty.

Tackling poverty, and in particular child poverty, is a mission that is broadly shared across the Parliament. Indeed, in many instances we have worked across the chamber to act in that area, not least by setting ambitious targets for the reduction of child poverty by 2030 and on the introduction of the Scottish child payment, which Labour had long called for and backed. It is no secret—we have already heard it said—that our actions need to go further and faster if we are to tackle child poverty and meet those ambitious 2030 targets. We need to recognise that there are concerns that we might fall short of those targets and of the interim targets that the Government has set.

Supporting parental employment as a mechanism to tackle poverty, which the report highlights, is just one of the areas in which we can go further and faster. I became a member of the Parliament’s Social Justice and Social Security Committee halfway through the inquiry.

If the cabinet secretary would let me make just a little progress, I will come back to her.

I joined the Social Justice and Social Security Committee as it was progressing through its inquiry, and I was not able to go on the committee visits, but I heard evidence from representatives of a number of leading organisations, who spoke about the work that needs to be done to support people back into work, in order to develop a strong economy. A lot of concern was raised about budgetary decisions that have been made, and we have to consider the promised £53 million in funding for employability schemes and the complete scrapping of the parental transition fund. That was seriously concerning, and it was raised by a number of the organisations that gave evidence during the inquiry.

We should also look to the research by One Parent Families Scotland, which has put on record the difficulties that families have experience in not being able to afford essentials.

IPPR spoke about

“a massive chasm between the overall number of people being reached by current employability programmes and those who are supported into work.”—[Official Report, Social Justice and Social Security Committee, 15 June 2023; c 25.]

The Joseph Rowntree Foundation has highlighted that one in 10 Scots is in persistent low pay. As we know, women are particularly impacted by that, as they are more likely to be single parents.

The arguments on the budget and on the required growth of the economy were well made. I did not detect a focus on economic growth or employability in the Scottish Government’s budget, nor did I detect one on improving access to work for people across Scotland, including parents, especially those of young children. We could have another debate on the council tax freeze, which has attracted a degree of commentary from across the country on what could have been paid for instead of that intervention, which was not welcomed across the piece.