Chamber and committees

One issue, which I think Mr Davidson alluded to, is in respect of what was once described as light touch. It relates to the entry into ADP and the relatively low number of people who are coming off it.

One of your colleagues, Professor Ulph, put it to the Finance and Public Administration Committee that, at one point, the figure in Scotland was 2 per cent at review, whereas in the UK it was 16 per cent. That gap may be narrowing, but it strikes me that there are still data black spots in relation to these benefits, both on the number of people who are receiving ADP—who may or may not be in work—and on the number of people reapplying and those who may come off the benefit and go back on to it again. What would you encourage the Scottish Government to do to address those data black spots that could mean that, by the time we get to 1 million Scots being on this benefit, at a cost of £7.3 billion, we have a greater understanding of the forces and drivers underlying it?

To turn to the broader landscape, we identified at the outset that we think that future budget settlements will be challenging. For example, next year, there is a £700 million negative tax reconciliation. There are real pressures on the Scottish budget, which could be added to, so there is a strong financial case for the Government to look at social security expenditure.

A public opinion issue is now developing, in that a polling of more than 4,000 adults across the UK, including Scotland, suggested that 54 per cent of people believe that the welfare system is too easy to access and does not do enough to prevent misuse. There has been an issue in the Scottish Government in that about £36 million has been claimed through fraud or overpayment and has not yet been recovered, and there appears to be a dispute between DWP and the Scottish Government. There is a live debate, therefore, about the future of the benefits system in Scotland.

One potential area would be to look at means testing ADP. The Government says that that benefit is demand led and that it assists people into work. However, granularly, what other potential options would be open to the Scottish Government to look at how to bring down the cost of that benefit, which, as we said, is projected to reach a significant number of billions of pounds by the end of the decade?

—to crunch the numbers.

Good morning, and welcome to the fourth meeting in session 7 of the Social Justice, Housing and Local Government Committee. We have received apologies from Mark Griffin.

Without further ado, we will turn to the first agenda item. We have two panels of witnesses giving evidence on pre-budget scrutiny for 2026-27—pardon me, it is for 2027-28—which is of critical importance in the first year of the parliamentary session.

We are pleased to welcome Michael Davidson, who is the head of social security and devolved taxes, and Dr Eleanor Ryan, who is a commissioner, at the Scottish Fiscal Commission. We also welcome Hannah Randolph, who is an economic policy analyst from the Fraser of Allander Institute. The committee has determined that we will take pre-budget scrutiny evidence with a focus on social security and, specifically, the adult disability payment. As it makes up a significant portion of the Scottish Government’s budget, it is critical that we capture your evidence on that.

Before we turn to the specifics of social security and ADP, I will ask a general question. The backdrop to the United Kingdom budget is very challenging and, as a consequence, the Scottish budget looks to be equally challenging, particularly given the potential for a £5 billion black hole.

There are storm clouds on a number of horizons. This morning, a warning was sounded to the UK Government and all Governments about the cost of borrowing and the need to curtail public expenditure off the back of that. We have a new Prime Minister, who has said that

“national security cannot come at the expense of social security.”

However, the real economy and the realpolitik could determine that that position will have to be revisited.

What are the risks to the UK budget that could flow into the Scottish budget and create potential risks for Scotland’s current level of social security spending?

I will take each witness in turn, starting with the Fiscal Commission.

Before I bring in Gary Bouse, I have a question for Chirsty McFadyen. SHERU said that rising benefit case loads can signal or are often the consequence of

“upstream problems in public services”

such as treatment waiting times or the absence of counselling. For example, as waiting lists for orthopaedic surgery come down or as other pathways potentially open up, would it be reasonable to expect disability benefit spending to fall? Would that be desirable, due to the root cause of the problem having been rectified? Would that enable people to get back to work or routine life?

That is super. Thank you for joining us. I will suspend the meeting to allow for a change of witnesses.

10:21

Meeting suspended.

10:32

On resuming—

Okay. In that case, I call Steven Bonnar.

As members have no further questions, I again thank our witnesses for joining us.

11:52

Meeting continued in private until 12:08.

I have a question for Hannah Randolph, about the balance between spending on social security and spending in other areas that could be deemed preventative. The Tony Blair Institute for Global Change has said that people diagnosed with conditions such as mild depression or attention deficit hyperactivity disorder should not be eligible for cash benefits; it argues that those should be classed as “non-work-limiting” conditions, and that, rather than money, the people in question should be offered support such as improved housing, employability schemes or faster access to treatments. Would that be an alternative route? Has any modelling been done on whether spending what is a significant—and growing—amount of money on mental health social security payments might be the wrong route, and on whether the money could be better spent elsewhere?

I will bring in Thomas Kerr.