Social Justice and Social Security Committee

Meeting date: Thursday, June 23, 2022

Official Report 632KB pdf

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Low Income and Debt Inquiry

Welcome back. Our next item of business is the final evidence session in our inquiry into low income and debt problems. I welcome back to the meeting Shona Robison, the Cabinet Secretary for Social Justice, Housing and Local Government, and I welcome Tom Arthur, the Minister for Public Finance, Planning and Community Wealth. We are also joined by Elaine Moir, who is head of the Scottish Government’s financial wellbeing unit; Robin Haynes, who is head of council tax and alternative local tax policy at the Scottish Government; and Alex Reid, who is head of policy development at the Accountant in Bankruptcy. Everybody is in the room with us today.

I invite the cabinet secretary to make a short opening statement.

Thanks very much, convener.

I am acutely aware that households across the country are facing a serious cost of living crisis and that those on the lowest incomes are being hit the hardest. Many of those households are likely to then carry an increased burden of debt.

As I said earlier, through the budget for 2022-23, the Scottish Government has allocated almost £3 billion to a range of supports that will contribute to mitigating the impact of the increased cost of living on households. That includes work to tackle child poverty, reduce inequalities and support financial wellbeing, alongside social security payments that are not available anywhere else in the UK. It includes investing £83 million for discretionary housing payments, including £68.1 million to mitigate the bedroom tax and an additional £14.9 million to mitigate the damaging impact of other UK Government welfare cuts.

In response to the crisis, we took the decision to uprate eight Scottish benefits by 6 per cent and to invest a further £10 million in our fuel insecurity fund to support households at risk of severely rationing their energy use or self-disconnecting. Our Scottish welfare fund provides a vital and important safety net to those who are most in need. We have committed £41 million to that fund this year. That offers significant financial support for those living in Scotland, and it will provide a protection for those on the lowest incomes.

Ensuring that people have enough money to live on, that they are receiving all the benefits and entitlements that they should be receiving, and that they are appropriately supported around their debts are priorities for the Scottish Government. That is why we are committed to maximising benefit take-up, as shown in our benefit take-up strategy. We are investing more than £12 million this year to support free advice services to help people to maximise their incomes and manage their debt.

We know that there is more to do, which is why we have committed to increasing the accessibility of advice over this parliamentary session. We will continue to work with advice services to understand and respond to the on-going impact of the rising cost of living and to ensure that our limited resources support the people who are struggling the most.

Good morning to the committee.

I have had the chance to read through much of the evidence that has been given in previous sessions, including from those who have experienced the pressures of debt and low income. That evidence has provided a stark and salient reminder of the pressures that households across the country and those who are trying to help them face. There is a reason why we are talking about a cost of living crisis.

The number of personal insolvencies dropped significantly during the pandemic, but it is now rising again. There can be little doubt that rising inflation—not just in energy costs—will bring more people into unsustainable debt. There are whole categories of debt that individuals do not necessarily choose to incur, including council tax and benefit repayments debts, and other involuntary debts. That is why we must look at the system itself, so that we are not asking those who cannot afford it to pay towards what are, in effect, the costs of the state. The cabinet secretary has set out much of what we have been doing recently on that front to put extra money into people’s pockets.

On the available debt solutions, I believe that we have a very strong foundation. High-quality advice is at the centre of our solutions—it is a prerequisite to accessing them. We believe that that is exactly the right approach. We have reduced the fees for accessing bankruptcy and removed the fees completely for the most financially vulnerable.

We continue to take action. We have made changes to the Coronavirus (Recovery and Reform) (Scotland) Bill to continue the extended moratorium period of six months beyond the end of September, and we support John Mason’s amendment on bank arrestments. It was good to see the changes to the moratorium getting cross-party support at stage 2.

I believe that giving people time and space to consider the right solution can deliver benefits to all sides, creditors included. We cannot take that too far, though, because we would only harm the interests of those on low incomes if we made creditors unwilling to lend to them.

I know that we have more to do. As the committee knows, we are in the midst of a stakeholder-led review of debt solutions. I would welcome any suggestions from the committee on where we should focus our attention.

I thank both of you for your opening statements. We come to questions from members. To kick off, we will hear from Paul McLennan, who is participating online. Paul has questions about accessing money advice, which will be followed by questions about the delivery of money advice.

Good morning, cabinet secretary and minister. I apologise that I cannot be with you in the committee room this morning.

A few weeks ago, three or four of us from the committee met people with lived experience. That was a very worthwhile exercise. One chap mentioned the financial problems that he had got himself into. He went to his general practitioner and was told about social prescribing. He said that that referral literally saved his life. What are your views on the role of social prescribing in relation to accessing debt advice? That is one example; I am sure that there are many others.

That is really important. I think that I am aware of the case that Paul McLennan has mentioned, which was a powerful testimony.

The key thing is the 200 community link workers located in general practices across Scotland, which we have funded through the primary care improvement fund. They are now a well-established component of multidisciplinary teams in primary care. Someone may present to their GP with stress or other mental health issues, but worries about money and debt may underlie that. The ability to signpost people in the here and now just along the corridor to someone who can help them to look at the money situation, entitlements and options around debt management is very important. That is the value of the community link workers, and you can multiply that testimony many times.

The experiences and insights of the community link workers are crucial in helping us to plan future policy. The Scottish Government has commissioned Voluntary Health Scotland to develop a new national network and community of practice for community link workers so that we can build on that expertise. They do a crucial job.

Thank you.

We will move on to questions on the delivery of money advice. To start off, we have Pam Duncan-Glancy, who is online.

Good morning, minister, and hello again, cabinet secretary. Thank you for your opening statements.

I wholly concur that high-quality advice is one of the most important issues. The committee has heard from various advice providers that they are absolutely burst at the seams. For example, Citizens Advice Scotland told us that staff working in the bureaux are actually going to bed at night worrying about the same money problems for which they are having to support people during the day. Money advice services are in a very difficult environment right now, but we have seen a 10-year decline in funding for those services. How will the cabinet secretary and the minister address that? Do they accept that people need more and not fewer services at this point?

It is important to note that, for 2022-23, the Scottish Government is investing more than £12 million to support advice services in the provision of free income maximisation and welfare and debt advice. At the same time, we would want to acknowledge that, like every other sector, the advice sector is under pressure due to the cost of living crisis and the impact of Covid, which is still being felt.

The cost of living crisis and the Scottish Government’s commitment to tackling child poverty require a framework for Scottish Government-funded advice services that goes beyond debt advice to the provision of accessible holistic services that will help people to maximise their incomes and provide the support that they require. We are therefore committed to reviewing the way in which the Scottish Government funds advice, and we await advice on a refreshed approach later this year that will take account of, for example, the Improvement Service’s work on funding models for the debt advice levy and other models—for example, we are looking at the Welsh single advice fund.

We understand the pressures, and we are looking at how best we can address those. Funding is just one component of that. We are aware of the issues, and I put on record my thanks to the advice services for all the work that they are doing at this time.

Can you confirm whether the review will look at the three-year funding proposals? Can you update the committee on how you are implementing three-year funding proposals, particularly for money advice services?

As the First Minister said recently, we know how much importance the third sector places on multiyear funding settlements, and we will continue to work with the sector on the issue of fair and stable funding and try to move to multiyear funding where possible. That is very much in line with the discussions that we have been having with third sector organisations, which want to move to multiyear funding, of course.

One of the constraints on the Government is that we have not had multiyear funding. However, through the resource spending review, we have had the opportunity to set out our funding priorities, and tackling poverty—child poverty in particular—is clearly one of the key priorities.

The short answer is that that is very much on the table.

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Do you expect the implementation of a three-year funding cycle to be imminent?

That has to be part of the discussions with the third sector, which are not just about multiyear funding; they are also about some of the reviews and the way that we will deliver services. There are discussions to be had about ensuring that the third sector is working collaboratively and avoiding duplication. The multiyear funding discussions need to be part of that wider discussion with the third sector. We will continue those discussions with third sector representatives, and I would be happy to keep the committee apprised of how they are going.

I would appreciate that.

Thank you, Pam. Helpfully, you have asked Jeremy Balfour’s questions for him. Foysol Choudhury, who is joining us online, has questions about the delivery of money advice.

Thank you, convener. I was just sending a message to say that Pam Duncan-Glancy has asked my question, too. I am sorry that I cannot be with you guys in the Parliament.

It is always helpful when members ask other members’ questions, because it allows us to move swiftly on. I will go back to Jeremy Balfour, who has a question on digital exclusion.

Good morning, minister, and good morning again, cabinet secretary. It feels like the good old days when we all used to be on the committee together. It is nice to see you here.

It is clear that the digital path to applying for benefits is the way forward and that it saves many people a lot of time. However, there are people with disability issues and older people who find filling out forms online really hard or who are digitally excluded. How do we strike a balance so that we do not exclude people from applying for benefits because they cannot use the online system? Will the Government make a commitment that people will still be able to use the telephone or a paper form, if that is appropriate?

It is lucky that there were a couple of questions left that had not been asked.

You raise an important point. On digital exclusion, the Scottish Government is in the process of identifying priority groups to support over the next four years. Initially, that will focus on the six child poverty family types. The user research on the initial phases of the connecting Scotland programme will assist us in that approach. We are trying to ensure that the resources and support offered through the connecting Scotland programme reach those who need them most.

You are right to point out that, for a variety of reasons, the digital world is difficult for some people. It is important that there is a balance.

In the session earlier this morning, I mentioned that the new social security advocacy service, which was launched back in January, is supporting people with disabilities to access and apply for social security assistance, and offering space for face-to-face support to take people through the process, whether that is online or on paper. Most people now will access their support online, but it is important to have those other options of non-digital support. The work of the social security advocacy service will be very important in that space. I would be happy to furnish the committee with more details about that if that would be helpful.

Thank you.

We will move on to questions on debt and mental health.

We have heard from quite a few witnesses—in particular, from experts by experience—about the ways in which mental health issues are made worse by debt and the ways in which debt prevents people from accessing advice services, especially where trauma is involved. Is the Scottish Government aware of that difficulty, and is it doing specific work to encourage services to become trauma informed?

You made an important point. I recognise that we need to understand the impact that debt and money worries can have on mental health, and we are working with stakeholders to tackle that issue and ensure that our services have the reach that they need to.

In our mental health transition recovery plan, we committed to further develop a response to those whose mental health has been affected by issues relating to debt, and we are working closely with a range of organisations—including Citizens Advice Scotland—to tackle that. We have worked with Support in Mind Scotland and the Money and Pensions Service on the development of a money and mental health toolkit. The toolkit is designed to help people understand, manage and improve their financial health and mental wellbeing. It will be distributed very soon, mainly through GP practices with some distribution among social prescribing networks and Public Health Scotland. It will also be possible to download it from the Mental Health and Money Advice Scotland website. We understand the links and we are trying to ensure that that is built in to the services provided.

I will move on to other issues that were raised by witnesses. In May, Kirsty McKechnie, from the Child Poverty Action Group, told us that she believes there is a

“direct correlation between food bank use and the two-child limit.”—[Official Report, Social Justice and Social Security Committee, 19 May 2022; c 4.]

The Govan Law Centre told us that the removal of the £20 universal credit uplift made the difference between people having to use food banks and not, and Inclusion Scotland told us that the five-week wait for universal credit sets folk up to fail. What analysis has the Scottish Government done of the overall impact of those and other UK Government welfare policies?

You might be aware of the Scottish Government’s “Welfare reform report: Impact on families with children”, which was published in April. If not, it is definitely worth having a look at that, because it found that reversing key welfare reforms, some of which you mentioned, would bring around 70,000 people out of poverty, including 30,000 children. It looked at the removal of the £20 per week uplift, the two-child limit, the removal of the family element and the benefit freeze, and it also looked at universal credit work allowances and the taper rate, on which there has obviously been a positive move. In essence, if those reforms were reversed, it would help to put £780 million more per year into the pockets of Scottish households.

We have spent a lot of money on mitigation, and I outlined some of that in my opening remarks when I mentioned the mitigation of the bedroom tax and the benefit cap. If we did not have to mitigate those, and decisions on those things were reversed at source, we would be able to spend the money we currently spend on discretionary housing payments and the benefit cap on other supports. We therefore reiterate our call—as I do when I meet my counterparts in the Department for Work and Pensions and the UK Government—that that would be the best way forward for all of us.

It is clear that there is quite a contrast, and you will be aware of new analysis that shows that independent European countries that are comparable to Scotland, often with a similar population, are both wealthier and fairer than the UK. Poverty rates are lower in those countries, with fewer children living in poverty and pensioner poverty rates being lower. What are the opportunities if we had the additional powers at our disposal that those other countries have?

The first point to make it that a welfare system would never be designed to be delivered by two different Governments in two different ways, as that will never be the best system; it makes action and interface difficult. The complexity around case transfer includes the need to reconcile systems, and that is before you get into the end-user experience of trying to navigate all that complexity and the fact that there are underlying entitlements; for example, universal is a trigger benefit for the Scottish child payment. If we were designing a system in Scotland for Scotland, we would do it differently and build a more coherent system. We would build on the dignity and fairness principles that are at the heart of Social Security Scotland.

That said, we are doing what we can on the package of five family benefits. It is worth reiterating that that is worth more than £10,000 by the time a family’s first child turns six. Nothing like that is available anywhere else in the UK. We are trying to use the system that we have to put money into people’s pockets.

Paul McLennan has questions on debt and mental health.

Last week, I hosted a parliamentary reception with the Scottish Mental Health Partnership. It talked about the refresh of the mental health and wellbeing strategy and mentioned that debt plays an ever-increasing part in people coming to it with mental health issues. How can we ensure that debt and mental health is included in the refresh of the mental health and wellbeing strategy, and can we apply any metrics on how effective it has been?

That is an important issue, and when I answered the question earlier about the money and mental health toolkit, I said that it is very much on people’s minds. People who work in health understand the relationship between money worries and mental health. The toolkit will be important, and the support that is being rolled out, including link workers providing front-line support, social prescribing and signposting, is critical and will be even more critical in future.

Jeremy Balfour has questions about changes to the legal framework.

We had a long discussion with a number of groups about the issue of bankruptcy and how it works, and I have a couple of questions on that issue. On the fees for applying for bankruptcy, what consideration has the Scottish Government given to removing the restriction that someone can go through a minimal asset bankruptcy only once every 10 years? Could that length of time be reduced? If it was, would that require primary legislation, or could it be done by secondary legislation?

I am sorry, Mr Balfour—did you have a second question?

I will just ask that one first.

That is not a problem.

I am conscious that the matter has been raised. It is important to recognise that, although there is a 10-year period for the full administration of the minimal asset process bankruptcy, there is also a five-year period. I can understand the reasons and rationale that have been presented for removing the restriction, but it is often the case that the MAP is the best solution for someone because of their particular circumstances.

We have to recognise—as I am sure that we all do—the significance of the step of going into sequestration. I also make the point that, if someone has to have multiple bankruptcies in a limited period of, for example, a decade, it suggests that there are more fundamental issues that need to be addressed.

However, as the committee is aware, we are in the process of conducting a wider review. The working groups have reported, we will continue to engage with stakeholders and we will be consulting later this year. I look forward to the committee’s report on its inquiry and understanding the committee’s views more fully. At this point, I would say that I recognise the rationale behind calls to allow people to access the minimal asset process more than once within a 10-year period. However, we have to consider that carefully.

I ask Alex Reid to respond to the question about the process for changing that.

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On whether that could be changed by secondary legislation, I perhaps need to get back to the committee in writing. There are general regulation-making powers in the Bankruptcy (Scotland) Act 2016 to vary time periods and amounts, but I would want to seek advice on that and revert to the committee in writing on whether the particular change to the 10-year period would fall within secondary legislation.

My second question is on an issue that came as a bit of a surprise to me when we heard evidence. At the moment, a lot of the debt that people are dealing with is council debt—it is council tax debt and rent arrears. This is a genuine question and I ask it out of ignorance. Is there a legal duty on councils to pursue that debt? Do they have to pursue it vigorously? If not, have you had any discussions with COSLA with regard to at least mitigating the pursuit of that in the short term? Clearly, things may change in the months ahead, but we have received evidence that, at the moment, most of people’s debt is not private debt but is owed to local authorities. From a purely legal perspective, do they have to pursue that? What discussions, if any, have you had with COSLA on that?

I will ask Robin Haynes to say whether there is any legal obligation. Of course, I respect the autonomy of local authorities on this matter. We recognise that, in general, local authorities will always seek to engage with individuals who are in arrears to work out a mutually agreed scheme of addressing any debt.

My understanding is that there is no legal obligation to pursue, although council tax liability is set out in law. As the minister described, recovery of unpaid council tax is a matter for each individual council’s administrative practices, and the key thing is to secure engagement with those debtors to the council.

On the specific question of engagement with COSLA, although it is for the Government to propose legislation and for Parliament to decide whether to enact it, and we can set the framework for how local taxation operates, the administration of that is a matter for local authorities, which of course are democratically accountable. In all aspects of my engagement with COSLA, that respect for the autonomy of local government is paramount.

I absolutely understand that. Maybe you could come back to the committee in writing on this, but my understanding is that there is a duty on local authorities to take action and that, by taking court action, they become a secured creditor with regard to any debt that builds up. Obviously, that then leads to pressure and burdens on people. Is that understanding correct? If so, has any thought been given to waiving that duty, even for the short term as we go through this crisis, and would that require statutory changes?

My understanding is that local authorities have the power to write off debt of any type if they choose to do so, provided that there is no expectation of recovery. Obviously, ministers do not have the power to require local authorities to write off debt. Any decision making has to be done on the basis of individual circumstances. Even if resources could be found, in the current climate, given the reliance of local services on council tax collection, taking a wholesale approach would be a very difficult message to send out. We have to be very cautious about that.

There is also work going on in the Improvement Service, which is trying to improve the way in which council tax is collected. We have the council tax reduction scheme in Scotland, which means that no one should have to meet a council tax liability that they are unable to afford. I guess that our role in the reduction scheme has been to try to ensure that people on low incomes are not required to pay a council tax rate that they cannot afford. The reduction scheme has been important in that way—it has benefited a lot of people and helped them to avoid falling into arrears.

On the specific point about our engagement with COSLA, I would just clarify that COSLA does not have a formal role in debt work, but we would encourage it to share good practice among its members.

Thank you both.

Before I move on to questions from Natalie Don about creditor processes, I want to ask about the council tax reduction scheme. The scheme is unique to Scotland, and many households are availing themselves of it. We heard from quite a few witnesses that the landscape was sometimes confusing, depending on which local authority they were in, and that the letters were not always clear about how the benefit had been calculated. Is there any role for the Scottish Government in making the guidance clearer and the processes for uptake simpler?

We can certainly take that away and consider whether some local authorities have best practices that could be supported.

I accept the point that the landscape can be confusing. One of the areas that we are looking at is whether we can have single sources of information and support. It may be that we can pull in some of the support that is delivered by local authorities to ensure that people looking at what they might be entitled to can get a bit more clarity around that from a single source of advice. We can certainly look at whether there is anything more that we need to do around guidance.

That is very helpful.

My question follows on from my colleagues’ comments. Some of the points have been covered already, but this is a really important point. The committee has heard a lot of reports about the divergence between local authorities in the methods of collecting public debt. For example, benefit letters can be difficult to read, and there is little time between a missed payment and debt being passed over to a collection agency. The methods that are used by collection agencies can be really distressing at times—some are more incessant than others. Further, earnings arrestments are not means tested, which is concerning when we think about families, single parents or just people in different situations.

Would it be possible for there to be some form of national standard across all local authorities that would give us peace of mind that collection will be carried out with more decency and respect in mind? I appreciate that the responsibility lies with the local authorities, but it would be good if we knew that there was a one-size-fits-all method for how debt collection is carried out.

I will hand over to Tom Arthur in a second. If there are recommendations from the committee on good practice and not such good practice, it is important that COSLA and local authorities hear those. I would point back to the Improvement Service’s report “Collaborative Council Tax Collection”. It is not the most interesting of titles, but it is an important report, which highlights the existing good practice by some local authorities in improving council tax collection outcomes and the way in which that system operates. The fact that the Improvement Service has got involved in looking at what good practice is demonstrates that local authorities recognise that there is an issue there.

We would certainly encourage local authorities to look at that report and its recommendations. However, if the committee can add weight to that with its own recommendations—if there are some for local government and COSLA in particular to look at—that may be welcomed.

I echo the cabinet secretary’s points and recognise that, although it is not for Government to mandate to local authorities how they manage debt, the work of the committee will be important in informing how local authorities choose to conduct their processes.

Thanks. It is helpful to set that scene. We move to questions from Miles Briggs, to be followed by Pam Duncan-Glancy.

What consideration has the Scottish Government given to improving debt management through a public sector debt management strategy?

We heard from the cabinet secretary about the importance of link workers. However, linking people in should be looked at not just across local government but in the national health service and in education services. We have heard that people sometimes do not get early intervention, or that they do not look for that support, so there might be an opportunity to build that in across Government and public services.

There is. That might be through the national work on the provision of benefit take-up information encouraging people to take up their entitlements. A number of platforms can be used to promote that information, but nothing beats human interaction. That might involve support through schools—encouraging every part of the public sector to see its role in promoting information and advice.

I recently visited a school with the Cabinet Secretary for Finance and the Economy. The headteacher was clear that part of their role was to support families, particularly those on low incomes. They had advice evenings, bringing in advice givers and encouraging and incentivising parents to come along so that they could get that information.

It is about using all such opportunities, such as the GP surgery, the school, and health visitors for interaction and to signpost people because, although take-up rates for the Scottish child payment are pretty good, at beyond 80 per cent, 20 per cent of people who are entitled are not getting that important support. We need to look at all avenues.

Specifically, and it has been raised already with regard to writing off public sector debt, we have heard a lot of evidence on free school meal debts. Some of the parliamentary questions that I have lodged have been answered by saying that that is for local authorities to decide, and they will tell us that they do not have the resources to do that.

We have heard evidence that council tax debt is likely to increase during the cost of living crisis, as it is one of the areas in which people decide that they cannot and will not pay. When it comes to a wider strategy around such debt, where is the Government on the potential writing off of some of it? School meals are also a priority area for all of us.

I refer back to the point that local authorities have discretion in individual cases. On your point about writing off public sector debt, in whatever sphere that is, if the Scottish Government was to use resources to do that, those resources would not be available for other things in a tight financial environment. That is the first thing to state. It might be an obvious point, but it is one to state anyway.

The second point is that we have to be careful about what that signals. If we were to write off an entire council tax debt, what signal would that send to people about the relative priority of paying council tax, which funds local services? We could end up in a spiral, which would undermine council tax as an important contributor to public finances.

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Having said that, in individual cases, we would encourage local authorities and Social Security Scotland to take a sympathetic view of particular circumstances where there is no likelihood of repayment. Local authorities already have that discretion, and they use it in cases of council tax and school meal debt. It is right to consider cases on an individual basis rather than making a decision across the board.

Similarly, Social Security Scotland, when recovering an overpayment of devolved assistance, for example, is very careful not to push people into hardship as a result. It will work with the person and look at their wider financial situation to consider the affordability of any repayments. There is a recognition across services, whether it be local Government or Social Security Scotland that people are struggling, and services want to be as helpful as they can be. That has to be done on the basis of individual circumstances rather than by taking a blanket approach.

Thank you.

I want to take us back to the questions on digital inclusion. Forgive me for—[Inaudible.] Do you believe that anyone who needs support to access debt advice online, particularly those on low incomes, will have that support?

As I said, the connecting Scotland programme is looking at identifying priority groups to support during the next four years, and it is likely to focus on the six child poverty family types. That chimes with the child poverty delivery plan. The research undertaken by the connecting Scotland programme is on what will help the most, whether it is about devices and being able to use them or whether it is about connectivity issues. That research will be important in ensuring that the next phase of work through connecting Scotland helps those who need it most. I am happy to ensure that the connecting Scotland team keeps the committee appraised of that work.

Thank you, that is helpful.

During the pandemic, mobile phone companies were able to offer people access to NHS websites without their having to use data. That meant that it was effectively free for people to access those sites. Has the Government considered asking mobile phone companies whether they would do the same thing for debt advice?

I do not know whether that has been done. We can follow up on that and check whether that discussion has taken place in respect of debt advice.

I am not aware of any discussion having taken place on that.

Can we come back to the committee on that specific point?

Yes, that would be helpful. Do you have any further questions, Pam?

Yes, I have questions on public debt, so I will move on to those. We have already spoken about the difference between the collection of public debt and private debt, particularly in relation to council tax. The Poverty Alliance noted that the situation is extremely complicated and it is difficult for people to understand their right to access council tax reduction, particularly when they slip in and out of having to pay that on the basis of their income. Would the Government support the proposal for local authorities to write out to people to make explicit their entitlement to a council tax reduction and also to write back to them when there are changes to that, so that people do not inadvertently fall into public sector debt?

Council tax reduction is a sophisticated scheme that seeks to target need and household circumstances with support as closely as possible, based on income and savings.

To unpack that a bit, it is easy to calculate income for some of the civil servants who are in front of you. We have one job, get a yearly salary and get a P60. However, for those who are in more complicated circumstances, such as somebody who is on universal credit, has a number of zero-hours contract jobs and a little bit of income that fluctuates, defining income is achieved within the council tax reduction system. Presenting that to individuals in a pro forma, which might even be recalculated monthly, would risk deluging everyone who gets council tax reduction with an awful lot of paperwork every month.

That is why local authorities choose to provide summaries of entitlement when they issue council tax bills. However, they would also argue that, to varying degrees of effectiveness, they support people in accessing the reduction. The bottom line is that it is in no local authority’s interest for someone who should get council tax reduction to fall into arrears when they should get the reduction.

It is a tricky balance, but there is a risk of deluging people with too much information. If someone is uncertain about how their council tax reduction is calculated, local authorities should help them to understand the calculation.

Perhaps we could pick the matter up with COSLA and discuss whether there are ways that we could work together to promote information. I know that that is a bit different from writing to individuals, but there might be complexities around doing that that would generate numerous letters weekly. That might be difficult for people, rather than helpful. However, I take the point about making sure that we provide clear information to people in case they are slipping through the net. As Robin Haynes said, it is not in any local authority’s interest not to ensure that people are aware of the council tax reduction scheme.

If there is more that we can do to promote information and clarity, I am happy to pick that up and discuss it with COSLA.

I appreciate that commitment, cabinet secretary. I take the point about striking the balance and not deluging people with a lot of information and letters. People do not want any more letters than absolutely necessary. If we can get the right balance between that and the current situation, which appears to be that people do not quite get enough information, that would be helpful.

My last question relates to social care charges. Is the cabinet secretary in a position to update the committee on whether she is aware of the number of people who are in debt because of such charges?

I do not have that information to hand but we could certainly furnish the committee with it as a follow-up, if that would be okay.

That would be helpful. Thank you for that.

I have a question on the arrestment of wages. We heard from a number of people that the amount of money that people were being left with in the bank after the arrestment of wages for debts was not enough for them to address their immediate needs and that no consideration was given to the composition of the household and whether it was a single person or, indeed, somebody with a big family. Is there anything in the Scottish Government’s powers that it could use to mitigate that?

I am conscious that there was stakeholder interest in that matter. As the committee will appreciate, there is a degree of complexity around it but I am happy to take it away and consider it carefully. With any such matter, given the complexity, we must always be careful that we do not end up creating unintended consequences. Having said that, I am happy to consider the matter as part of the broader work that we are doing in our wider review of statutory debt solutions.

I invite Alex Reid to comment.

That issue could form part of the review of diligence that is under way. The earnings arrestment issue is slightly different to the bank arrestment issue, which is being addressed in part in the Coronavirus (Recovery and Reform) (Scotland) Bill. The calculation of the bank arrestment protected minimum balance is separated out from earnings arrestment but there could be separate issues to consider on earnings arrestments.

Thank you very much for that. I would appreciate you coming back to us with some information on that, as you said, minister.

My final question relates to the Scottish welfare fund. We know from the evidence that we have taken that it is used extensively. Is there any update on how the review of the fund is progressing?

The fund is important, as you said. Many local authorities top it up, which is making a big difference in these difficult times.

The independent review, which was externally contracted, is under way. The first phase of research is nearly complete and the second phase will begin next month. The aim is to develop a credible evidence base that can inform future policy improvements, including any decisions about the level of funding, the delivery of the fund and the criteria and guidance for it.

There is a keenness to get it done as quickly as possible, but it is a substantial programme of work. It includes a review of the existing evidence as well as qualitative research with all 32 local authorities, key stakeholders and, importantly, applicants to the fund. It will take several months to do work of that scale and complexity properly. We need to do it once and do it well so that it generates reliable conclusions that are based on credible evidence. We expect that the final report on findings will be published early next year.

I should also say that the review is being supported and guided by a review advisory group, which includes representatives from a range of internal and external stakeholders. However, I am happy to keep the committee apprised of its progress.

Thank you very much for that. That was helpful to hear and we would appreciate being kept in the loop with it.

I thank the cabinet secretary, the minister and their officials for coming along.

That concludes the public part of the meeting. We move into private.

10:57 Meeting continued in private until 11:34.