Chamber and committees

The DWP does not hold that information for the personal independence payment and we do not hold it for ADP. It is not part of the application process because ADP is not means tested. We would not collect that information.

An important aspect of this that I will come back to is that many people who are applying due to a mental health condition or behavioural conditions are already in employment. One of the reasons why we have seen an increase in people coming forward for ADP because of mental health issues or neurodiversity is that we are increasing the support for people to come forward for something that they have always been entitled to but never felt that they could apply for because of the stigma or the judgment. The fact that we have a system that encourages people to apply for benefits to which they are entitled is really important; it is about taking stigma away.

The work that is being done overall, not just by Government but in society, whereby we have a much more open discussion about mental health, is particularly important. We need to have supportive employability schemes to allow people who are not in employment back into the labour market. Social security is one aspect, but employability schemes that support and wrap around a person are also particularly important. Very recently I announced the additional investment that the Scottish Government is undertaking to ensure that employability support for disabled people in particular is available right across Scotland. It is about employability linking in with social security to ensure that support is provided for those who can get back into the labour market or those who wish to do so but do not have the ability at this time.

I will bring in James Wallace, if he wishes. You will notice from his title at the start that he is no longer in Social Security Scotland but has a wider remit to support me in all things budgetary now. He is well versed still in all things agency if he wishes to contribute.

We are looking very closely at the agency’s ability to communicate effectively with people. That has two benefits. One is that it is more cost effective and the second is that it may be what people would prefer. That clearly needs us to have the right information from individuals. For example, the agency would never move from a letter to an email if that is not people’s desired preference, because we are always keen to use the channel that is appropriate. We are looking at and the agency is already instigating work on moving, where supported by client decisions, from paper to emails for certain aspects. We are also keeping a close eye on the impacts of how we communicate and the cost of that.

We do not analyse every single part of the process and how much each individual staff member costs, because that staff member can move across different benefits and different parts of the system. That is to allow them to be more efficient and effective, rather than everyone sitting in their silos being told, “You must only do this.” That would be easier for us to measure, but that individual would not be effective and efficient. The agency looks at the impact and how we can save money if it is right for the client, and changes in communication with clients are an important part of that. I do not know whether James Wallace wants to add anything.

We have had an unfortunate run of changes to UK Government policy. To be clear, they have been unfortunate, most importantly, for the people that would be impacted by them. However, secondary to that has been the unfortunate impact on the ability of the Scottish Government to set a budget. We had in-year budget changes in the past year or so in relation to the pension-age winter heating payment, which made a significant change to the Scottish Government budget for the financial year that we were in. Our policies had been set, and, in order to balance the budget that year, we had to change those at pace and in ways that were uncomfortable for us. We must also take account of the changes that will affect the block grant adjustments over a longer period. The most obvious one of those concerned the proposed changes to PIP, which have been rolled back.

Those changes are challenging, and the committee will be under some of the same challenges as we are. The work that was produced by the Scottish Fiscal Commission includes the changes that the UK Government was due to make to the block grant adjustment, and we have to wait until the next fiscal event from the UK Government to get the next set of information from the Office for Budget Responsibility that will allow the Scottish Fiscal Commission to do further forecasting, which will assist the Scottish Government. A lot of those developments impact on the ability of the Scottish Government to make forecasts about what we will get through the BGA and, therefore, what the impact will be on our budget.

I absolutely appreciate that the UK Government needs a private space to make its own decisions, but we have asked it to find a better way of doing that. We need to find a way in which it can give us advance sight of material, because we are still at the point where I am reading about adjustments on social media before we have had the courtesy of a call from the UK Government. Indeed, I continue to read about what might or might not happen with the two-child cap as Social Security Scotland spends money this financial year to mitigate that policy. We have to speculate about what will happen. We are already spending money on mitigating the two-child cap. We will deliver that mitigation in March—we were right to make that arrangement—but I will have to wait to see whether there will be a change in the UK Government’s policy.

You are quite right to point out the cost—before I have mentioned it—of a run-on, for example, but we also have to bear in mind that the legislative foundation of the Scottish child payment is being eligible for universal credit. Someone who is not eligible for universal credit is not eligible for the Scottish child payment, because of how the legislation was developed. We developed that foundation because it was the quickest way to deliver the Scottish child payment. Any changes would have to take advantage of the legislation that the committee scrutinised and change the legislative basis for the Scottish child payment. After that had been done, you could look at changes that allowed a run-on, but that is not possible under the current system.

Thank you.

As we develop the budget for this year, we would welcome submissions on these issues not only from other parties—or indeed those who are in no party, Mr Balfour—but from a number of organisations. You pointed to the work on children aged zero to one. I know that Save the Children has submitted evidence on that aspect. We have received calls from other organisations on how to make changes both within and outwith social security. I reassure all those organisations that I take such calls very seriously. The committee will not be surprised to hear that if I totalled up the amount that people wish us to spend on social security and all other aspects of my portfolio, never mind what is in other people’s portfolios, it would not be possible to spend that, but we take those calls very seriously. We look to see what our response would be and to see whether there are ways that we can spend the money that we are already spending, not just in social security but in other areas, more effectively.

We are undertaking work. As I alluded to earlier, the Scottish Fiscal Commission’s forecasting for disability benefits, and indeed other benefits, is based on a number of assumptions about the growth and reasons for expenditure. The increase in the Scottish Fiscal Commission’s forecast to the end of the decade in the main is due to factors common across the UK, which I am sure will not be surprising to the committee. We are looking at the increasing demand for carer and disability benefits, the impacts of the increased cost of living crisis and the rises in payments due to uprating.

The Scottish Government has also undertaken work to identify the different drivers of demand for devolved disability benefits in Scotland and it is our intention to publish that analysis in autumn 2025. We know that some of the reason why we have increasing demand in Scotland in particular is that we have developed a system in which we encourage people to take up support and in which there is less stigma. That is part of the reason why there is more of an increase in Scotland than is anticipated in the rest of the UK. There is also an impact from the number of claims that are now being received to do with mental health or behavioural conditions.

Those are some of the underlying issues that underpin the assumptions in the Scottish Fiscal Commission’s work and the work that the Government has been undertaking.

I have looked at that evidence, which reiterates the points that many organisations have made to the Scottish Government and directly to the Cabinet Secretary for Finance and Local Government about their desire to see changes in the tax system in Scotland. I pointed earlier to the decisions that the Scottish Government has already taken on income tax since devolution that are different from the current UK set-up. Those are estimated to raise up to £1.7 billion in additional income in 2025-26 in comparison with what would have been raised if we had implemented the same rates and bands as the rest of the UK. That demonstrates that the Scottish Government is willing to look at, and indeed has implemented, a more progressive and ambitious taxation system.

The First Minister and the Cabinet Secretary for Finance and Local Government have set out in Scotland’s tax strategy our next steps in our approach to taxes. We think that it is very important that taxpayers and, in particular, businesses have some knowledge and confidence about what will happen. That is why we are providing stability in income tax for the remainder of this session of Parliament and there is no intention to increase the number of bands or rates of Scottish income tax. As I have said, without sounding too repetitive, if the committee will forgive me, I am sure that there will be discussions in which proposals will come forward on other changes that could be made, but the Government has been very clear on the Scottish tax strategy and some of the points where we felt that it was important to provide taxpayers and businesses during the cost of living crisis with some certainty for the remainder of the session of Parliament.