Social Justice and Social Security Committee

Meeting date: Thursday, March 17, 2022

Official Report 596KB pdf

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Subordinate Legislation

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Social Security Up-rating (Scotland) Order 2022 [Draft]

We will now consider one affirmative instrument. We were also due to consider the Social Security (Up-rating) (Miscellaneous Amendment) (Scotland) Regulations 2022, but the committee received a letter from the Minister for Social Security and Local Government yesterday that explained that those regulations were due to be withdrawn and relaid. I hope that the minister can provide some information about that this morning.

I welcome to the meeting Ben Macpherson, the Minister for Social Security and Local Government. The minister is joined online by Scottish Government officials Simon Coote, the head of the cross-cutting policy unit; Camilo Arredondo, a solicitor; and Dominic Mellan, an economic adviser in social security analysis.

I invite the minister to make an opening statement.

Thank you, convener, and good morning, colleagues.

I offer my sincere thanks to the convener and the committee for accommodating the last-minute changes to the scrutiny process for the Social Security (Up-rating) (Miscellaneous Amendment) (Scotland) Regulations 2022, which we were intending to cover today, as the convener said.

The committee will be aware of the cost of living pressures, which have grown significantly since we took the decision on uprating benefits some time ago as part of the Scottish budget process. We know that those pressures might yet rise further and that they will disproportionately impact the poorest households. That is why I decided to see what more could be done to support people using our social security powers.

I am now seeking to use the uprating regulations to provide that additional support, which will primarily help low-income families and unpaid carers. In order to do that, it is necessary to withdraw the previous regulations and lay them again under expedited procedures, which I am doing today. Please accept my apologies for any inconvenience that that causes. However, I am sure that the committee will understand the reasons for that, and I sincerely hope that it will support the relaid regulations.

I understand that the committee will now consider those regulations on 31 March but, given the interest that the committee will have in them, it is worth broadly outlining the changes now. Of course, I am happy to come back later in the month if the committee wishes me to do so.

I am proposing additional support by further increasing several forms of devolved social security benefits and assistance from the previous 3.1 per cent increase to the 6 per cent rate. That will apply to the job start payment, the young carer grant and funeral support. Subject to parliamentary approval, uprating will now be almost doubled for those benefits.

The best start grant will also be increased by 6 per cent, and there will be future regulations to increase the carers allowance supplement. We will also increase child winter heating assistance by 6 per cent—greater than the 5 per cent already proposed—to support 19,000 families of severely disabled children with heating costs.

As the committee is aware, we have already taken the decision to double the Scottish child payment from £10 a week to £20 a week—a 100 per cent increase—which will immediately benefit about 111,000 children.

In August 2021, we increased the best start foods payment from £4.25 to £4.50 a week. That 5.88 per cent rise exceeds the rate of inflation and is close to the 6 per cent uprating for other benefits, so there will be no change to that benefit.

I turn to the immediate task at hand. Today, the committee is considering the Social Security Up-rating (Scotland) Order 2022, which uprates benefits for which we have executive competence but which are currently administered by the DWP under an agency agreement on Scottish ministers’ behalf. It is important to note that we have no discretion around the level of uprating of those benefits. The agency agreements that are in place with the Secretary of State for Work and Pensions that allow the DWP to deliver those benefits on behalf of Scottish ministers mean that we are committed to uprating them at the same rate as the DWP. They will therefore be uprated by 3.1 per cent, in line with the September consumer prices index. It is, however, a matter for the Scottish ministers to make an order to effect the uprating, which is what you see before you today.

I thank the committee again for its scrutiny of the uprating order and its forbearance, given the need for urgent changes to the uprating regulations. I look forward to any questions that the committee might have.

Thank you, minister, for providing that clear and concise explanation of why we will be looking at relaid regulations. Given the pressures that households across the country are feeling right now, I think that that will be a welcome decision for us to make on 31 March.

I will bring in Jeremy Balfour.

Good morning. We will look at the relaid regulations on 31 March, which is fine. In order that we can look ahead and do the appropriate planning, however, I have a question about the increase to the benefits. I presume that the cost will be met from the Scottish Government budget, rather than from what has already been planned. Where is the money coming from? Will it come from the social security budget that has been approved by Parliament or from a different department’s budget? When we passed the budget, Kate Forbes told us that every penny had been accounted for and all the money would be spent. This is obviously extra money that was not in the budget. Where is it coming from?

That is an important question. I do not want to go into too much detail on the complexities of the internal correspondence within Government, although I will bring in Dominic Mellan if he wishes to add anything that is relevant.

Ministers have, of course, looked collectively at the situation that is before us, with the real pressures that families are encountering and will encounter in the period ahead, and we are determined to provide assistance and help where we can, using the powers and resources that we have. We looked at what we could absorb within the social security budget. The additional amount that we are allocating in order to undertake the uprating for the financial year ahead is £2.7 million. We have absorbed that within the social security budget.

I am trying to work out where that £2.7 million is coming from. Was it sitting there for a rainy day or was it allocated for a different purpose until it was transferred, probably quite rightly, to the uprating of the benefits? How much flexibility do you have in your budget for that?

Budgets always have a degree of flexibility. We will consider the cost pressures in the course of the financial year, but we feel that we can absorb a £2.7 million increase.

Will there be any knock-on effect on other things that you might have been thinking about doing in the financial year? You might have been thinking, “We could be a bit more generous here” or “We could think about that benefit.” Have such things been put on the back shelf because you are bringing forward the money fairly early in the financial year?

It is not our intention that there will be a particular impact on those who access social security. As I said, we have decided to consider the cost as an absorbed cost and pressure within the social security budget.

I do not know whether Dominic Mellan or Simon Coote wants to add anything that might be helpful and appropriate.

There is nothing from me. I am not sure whether Simon Coote has anything to add.

10:30  

It looks as though everybody’s screens have frozen, but I do not think that anybody had anything to add.

Thank you, minister.

Good morning, minister. I do not know whether I missed this, but carers allowance supplement was going to be kept at its higher rate after Covid. Has that just fallen by the wayside?

As I said in my opening statement, the carers allowance supplement will be uprated by 6 per cent. In the period ahead, the Government will give on-going consideration to the carers allowance supplement additional payment, on which we passed additional legislation a number of months ago. I am sure that we will discuss that with the committee and in the chamber in the months ahead. However, I can confirm that the carers allowance supplement will be uprated by 6 per cent.

Pam Duncan-Glancy wants to come in.

Thank you for allowing me to ask a question, convener—I know that I said in advance that I might not have one. I have two questions, if that is okay.

Obviously, we face a considerable cost of living crisis right now, and I believe that the measures are well meaning and the right thing to do. To use a phrase that the IFS witness used earlier, the measures are well meaning but not well designed, given the way that you have done it. I worry slightly that the papers that the committee got last Thursday suggested that you were going to replicate the rates and in some areas were not going to uprate at all. What has changed between last Thursday and today to take you to the decision that you have made? I do not think that it is the wrong decision, but I am keen to know that we are taking decisions properly with robust information and in a considered fashion.

My next question is on the benefits that are still being delivered under agency agreement and that we are being asked to uprate today with CPI, which is 3.1 per cent. I guess that this is not so much a question and more of a statement, but I just want to put it on the record, because it is another frustration of mine. We could have been doing something a bit differently had we been delivering those benefits fully in Scotland. What you intend to do on 31 March in other areas shows what we could have been doing for disabled people and carers if we had not still been using agency agreements.

I will come to those two points in turn. Of course, the regulations that were based on the September CPI rate followed the position that had been taken in previous years since we introduced the social security benefits—of uprating on that basis. The rising cost of living pressures that we saw before the invasion of Ukraine and have seen since it have, of course, changed the situation for all of us, and in particular for lower-income households and unpaid carers. The Government is committed to doing the right thing and helping people where we can. We therefore looked carefully at what we can do with our powers and our resources, and we have done what is necessary to ensure that we deliver the uprating.

With regard to the point about the social security benefits that are delivered under agency agreements, we cannot create a two-tier system. We will have people in the Scottish system and people in the reserved system until they transfer to the Scottish system, particularly those on disability benefits. I appreciate Pam Duncan-Glancy’s position, but the Government is moving at pace to undertake the delivery of devolved social security and to transfer people into our system in a safe and secure way.

We have had—and, in fact, are still in—a pandemic, and that has made it challenging for us to do all this to our original timetable. As a result, the timetable has had to change not just for the Scottish Government but for the DWP. The fact that Social Security Scotland will launch its 12th benefit on Monday and that seven of those 12 benefits are new is pretty remarkable, as is the fact that we have done all this since 2018. We are building an institution and an organisation that needs to be strong not just in the period ahead but for years to come, and that will rely on having a strong foundation.

In an ideal world, we would, of course, have had everyone in our system quicker than has happened, but these things take time. It is not as if we get a USB stick from DWP and plug it into our computer; the process is much more complicated, and we are undertaking it with diligence and responsibility.

First of all, I should correct the record. I said that we got our papers on Thursday, but we got them on Monday. Please forgive me—I was getting confused about which committee papers I was talking about.

I thank the minister for his answer, but I respectfully say to him that I do not think that this is a matter of transferring information from a USB stick. We have had since 2018 to get moving on this, which means that a considerable amount of time has passed. As I know the minister will understand, I understand that the process is complex, but we could have been uprating disability and carers benefits by 6 per cent today. However, we are not, and I just want to mark for the record how unfortunate it is that we have not been able to take that decision, because it means that we are still not delivering those benefits here in Scotland for the people of Scotland.

I respect Pam Duncan-Glancy highly, but I just want to emphasise again that since 2018 we have been building from scratch an agency that is now highly performing and which employs nearly 2,000 people. We have delivered several benefits; we will start to deliver our 12th on Monday; and seven of those 12 benefits, some of which we are discussing uprating today, are new and available only in Scotland.

Thank you for that, minister. I see that from the chat function that Simon Coote would like to respond.

There seems to be a delay in the sound. Go ahead, Simon.

We still cannot hear you, Simon. I will go to a question from Miles Briggs and then come back to Mr Coote.

We had a good run in this committee with regard to gremlins in the system.

Good morning, minister and officials. The £2.7 million for the uprating was found from flexibility in the budget, but as the cost of living crisis moves forward, have you identified any other money from flexibilities that you might come back to the committee on?

As the member will know and as the finance secretary has emphasised many times to Parliament, there is significant pressure on Scottish budget portfolios in the coming financial year. As I have said, we have, in this instance, identified resource that we can absorb within our budget, and we are continually looking to see where we can use resource efficiently and for the benefit of the people of Scotland. Internally, we have had to work hard to identify this resource and make it available, and we are glad that we have been able to do so, but I am not going to—and I am not able to—specify at this point whether other resource will be available in the course of the financial year. As the member knows, the budget is allocated, and over the subsequent financial year we go through the process of reconciliations and reconsideration of positions. However, I emphasise that the Scottish Government, all ministers, including me and the Cabinet Secretary, and Social Security Scotland consistently look at what resource is available and how it can be utilised to help the people of Scotland, particularly low-income households and unpaid carers on social security.

The key point that I am trying to get at is whether the uprating addresses potential unrealised additional take-up or unmet need. What are your projections for that? Most people would expect more people to seek some of those social security benefits. Where is that spend being targeted? If additional people come forward, has flexibility been lost?

There is no loss of flexibility in that regard. We set a budget allocation on projections, which involves the Scottish Fiscal Commission. We also project based on the fact that we will be encouraging people to take up benefits. As you know from the Social Security (Scotland) Act 2018 and Scottish Government policy intention and documentation, we are strongly committed to promoting benefit take-up and undertaking what is necessary for that. We have had good discussions at the committee on how we collectively can all play our part in promoting benefit take-up. That becomes even more pertinent in the period ahead.

I call again on all members to work with the Government and the different public bodies involved in that collaborative effort to raise awareness in communities of what support is available, encourage people to apply if they think that they might be eligible and tell their friends and neighbours about it so that we can spread the word about what support exists. Some of the benefits that we will be promoting are ones that we intend to uprate by 6 per cent, as I have set out.

I appreciate that. I do not know whether you can commit to this, but it would be useful to the committee’s financial scrutiny to be able to see some of the potential flexibility within budgets. I do not know whether you had the chance to see the evidence session that we just had, but there is a lot of work to be done on a projected future spend that approaches £750 million. If we could have sight of more information on that, it would be helpful for the work that we are trying to do.

I saw some of the previous session. I am happy to correspond with the committee on those important points that Mr Briggs raises. It is a question not only for social security ministers but for the finance portfolio, so there is a question about how the committee might want to consider those points.

Thank you very much for that. Perhaps the committee could have a dialogue with you about that.

It looks like Simon Coote left, came back in and would like to try again. I will bring him in.

Simon, we still do not have any volume for you, unfortunately. Perhaps you will have to come back to us with your point in writing.

We will move on to a question from Marie McNair, who joins us remotely.

Good morning, minister. From your letter to the Presiding Officer, we are aware that, in the light of the cost of living crisis, you plan to introduce emergency legislation that will increase the uplift in Scottish benefits to 6 per cent. That is really welcome, as it will help some people to cope with the impact that the crisis is having on household incomes.

You set out that that is not possible for disability benefit because of the current Westminster welfare uprating policy. However, the Resolution Foundation has asked the UK Government to uprate higher for as many benefits as is administratively possible but at least universal credit and tax credits, which could include DWP disability benefits. That would be an obvious way to assist people with the cost of living crisis. I have not seen any remote possibility that the UK Government will do that. Is that also your understanding of its position?

10:45  

I thank Marie McNair for those important questions. We have had no indication from UK ministers in the DWP or the Treasury of an intention to uprate above the September CPI figure of 3.1 per cent. Of course, we would encourage them to do so. In the regulations that we are laying, we have set out our intention and determination to uprate the six social security benefits that we can fully determine by 6 per cent. Of course, we are increasing the Scottish child payment by 100 per cent.

We are doing what we can, with the powers and resources that we have, to provide assistance. I would encourage the UK Government to also do the right thing and uprate social security benefits across the UK, especially in the areas where there is the current dual process of delivery and introduction by the Scottish Government and case transfer with regard to disability benefits—in particular, the child disability payment and the adult disability payment.

I would encourage the UK Government to increase PIP and the disability living allowance for working-age adults above 3.1 per cent and to look again at universal credit. The case for increasing universal credit and the other benefits that it controls is compelling and I hope that the UK Government does the right thing in the March statement.

Thanks for that clarification, minister.

Pam Duncan-Glancy has a final question.

Has the minister considered any other ways or mechanisms to apply the equivalence of the 6 per cent uprate to disabled people in Scotland or carers who receive carers allowance in Scotland? Have you looked at any other mechanisms that could be used to get that money into people’s pockets?

I am not fully clear on the specifics of your question, so I hope that this generic answer will suffice, but please let me know if you have any further points.

On cost of living support, Ms Forbes took action with regard to the council tax position just a number of weeks ago. We have the council tax reduction scheme, the Scottish welfare fund—which we are still making a significant investment in—and the mitigation that we are undertaking with regard to the bedroom tax, which costs us tens of millions of pounds a year, so there are a number of different measures already in place to support people as much as we can.

The devolved social security system that we have, which I know the whole committee supports, allows us to get money to people and into their pockets. That is the real advantage of having that system and we will continue to develop it in a coherent and strong way for the period ahead and for decades to come.

Thank you very much, minister.

I remind the committee that only members and the minister may take part in the formal debate. I invite the minister to move motion S6M-03002.

Motion moved,

That the Social Justice and Social Security Committee recommends that the Social Security Up-rating (Scotland) Order 2022 [draft] be approved.—[Ben Macpherson]

Motion agreed to.

I invite the committee to agree that the clerks and I will produce a short factual report of the committee’s decisions and arrange to have it published.

Members indicated agreement.

Thank you very much. That concludes the public part of the committee’s meeting. I thank the minister and his officials—even if we had some gremlins and we could not actually hear from the officials—for their evidence this morning.

10:49 Meeting continued in private until 11:05.