Chamber and committees

This answer is at a very high level—I am not going to get into percentages—but I am keen to empower local government to raise more funds. Obviously, that will have to be done in a responsible way.

Councils do have borrowing powers; actually, they have more borrowing powers than the Scottish Government—

—but some are more at the limit of those powers than others.

There are certain approaches that we are exploring in the space of outcomes-based funding, and the one that is most advanced is the Granton housing project in Edinburgh, which also has an active travel and decarbonisation element. There are opportunities for individual local authorities to do more of that.

There is also the question of the local government pension fund, which is sitting at about £67 billion or £68 billion, and the strategic use of that investment, which local government is keen to discuss. Housing has been suggested as an obvious opportunity in that respect, but there could also be opportunities for infrastructure projects such as those for mitigating climate issues, for example, as well as other big decarbonisation and district heating projects. We need to explore whether more can be done in that space.

Clearly, any such models must have a return on investment—

Housing and energy are good examples, I think. There is more that we can discuss in that space.

And we are trying to do it as a devolved nation.

Yes, that is progressing. We have a new Chief Secretary to the Treasury, and I have not had a chance to raise it with him. I have had a very short introductory meeting with him, during which I had to raise certain things. I am getting a list of things together to talk to him about at the finance interministerial standing committee.

I have actually just been given an update here. We have agreed with CST to apply a bespoke arrangement to set the baseline for the block grant adjustment for the aggregates tax. We will use the outturn for the year of the tax’s introduction, which is 2026-27. That will ensure compatibility between the Scottish aggregates tax and the UK aggregates levy and avoid distortions in year 1 revenues.

I had not realised that—progress has been made beyond what I had understood.

I will ask my official, Lucy O’Carroll, to come in on ADT.

In practice, it would be highly unlikely that we would move forward with that under the current arrangements. I have said that before. I will have a look at the wording but, for the avoidance of doubt, it is neither our intention, nor that of the UK Government, to move forward with that because of the inability to resolve the risks. If the wording does not properly reflect that, we will have a look at it.

We will set out the position on that at the budget, but I have pointed to the framework and the principles around that.

When the Scottish child payment was introduced, it was important that we were able to get agreement from the UK Government Department for Work and Pensions that there would be no erosion of the support that people were receiving elsewhere—it had to be additionality. All the evidence points to that payment being the single most important intervention to ensure that Scotland has falling rates of child poverty compared to those anywhere else in the UK. There is cross-party support and understanding of that.

It is important that there are no cliff edges. For example, I am thinking about calls to increase the Scottish child payment. There is a balance to be struck there. As long as the payment continues to increase with inflation, I think that it is at about the right level. It is one of the pillars of support, but getting people into work is the best route out of poverty. We need to make sure that the Scottish child payment continues to lift children out of poverty, I think that it is at about the right level to do that.

If it were much higher, there would be a question about whether it would become a barrier to work. However, I do not believe that there is evidence to suggest that it is a barrier at present.

Let me say a few things. We have explored that at length—I know that, when Shirley-Anne Somerville gave evidence to the committee, she explored some of the issues. It is worth bearing in mind that the system that has been set up in Scotland was based on cross-party support for the secondary legislation that set out the eligibility methods for social security. All the parties in the Parliament wanted the principles of fairness, dignity and respect and there was cross-party consensus on the criteria for assessment and so on. The system did not emerge out of nowhere—quite rightly, people wanted it to look and feel different from the system south of the border.

That said, it is important that we have a system that works for those receiving the benefits and for the taxpayer. For example—again, we have explored this at length—the difference between the reviews and assessments by the DWP and those by Social Security Scotland is not as black and white as the figures suggest. Shirley-Anne Somerville made the point that getting it right first time means that there are less likely to be successful appeals. If I remember correctly, the figure is reduced to about 9 per cent if you consider the number of people who win their appeal under the DWP system. Although there is still a difference between Scotland and the rest of the UK, it is markedly narrower because of the number of cases that are won on appeal.

You probably heard from Shirley-Anne Somerville that Social Security Scotland is looking at the reviews. To be fair to Social Security Scotland, the focus has been on safe and secure transfer of existing cases. Given that the number of cases is about 350,000, it was important to ensure that that was done properly. Social Security Scotland is now looking at how the review system can ensure that people receive the money that they should receive and that their needs are as they were previously, because some people’s needs change.

Shirley-Anne Somerville also put on record an important point, which is that the proportion of the resource budget that the Scottish Government has chosen to invest in enhancing social security in Scotland compared with England and Wales is projected to increase by less than 1 per cent by 2029-30, compared with the current financial year. As I said earlier, there are some moving parts around welfare reform—U-turns and the two-child cap—so that figure might reduce even further, because the forecasts have not been adjusted—