Social Security Committee

Meeting date: Thursday, February 28, 2019

Official Report 597KB pdf

---

Social Security Scotland

Under agenda item 5, the committee will take evidence from Social Security Scotland. I welcome, from Social Security Scotland, David Wallace, the chief executive, and James Wallace, the head of finance; and, from the Scottish Government, Alison Byrne, the deputy director of social security programme delivery support.

David Wallace may like to make opening remarks before we move to the discussion.

I am very conscious of time, but I will make a couple of remarks.

Thank you for the opportunity to give evidence to the committee. The privilege of being the chief executive of Social Security Scotland means that I have had lots of firsts—the first payments and so on—and this is my first formal appearance in front of the committee.

I will touch on a couple of issues very briefly, given the time and because I know that there are some areas that the committee would like to explore. I will cover where we are as an organisation and how we have got there. I will also say a bit about the culture of the organisation that we are trying to build and about the information that we expect to generate to help the committee’s scrutiny of our performance.

As members are aware, Social Security Scotland opened for business in September last year with the carers allowance supplement—and I will stop there on the carers allowance supplement. We employ just over 300 staff, most of whom are based in our headquarters in Dundee and Glasgow, although we also have a small cohort of staff operating across Scotland in preparation for face-to-face local delivery.

A huge amount of work went into getting ready for the launch. I am conscious that some members have visited the programme to see some of the complexity behind what is being achieved. Alison Byrne is from the programme side of the Scottish Government, and we continue to work incredibly closely with our programme, directorate and chief digital officer colleagues to achieve what we need to achieve.

I will mention some key points in the agency’s history. In March 2016, “Creating a Fairer Scotland: A New Future for Employability Support in Scotland” was published, and that was our “there will be an agency” moment. I joined the directorate shortly after that and my remit was to make that agency happen. The statement in Parliament in April 2017 referred to our outline business case, which is published and which gives a lot of detail about how the agency will operate, including the face-to-face delivery. That was the first time that we set out that the agency would likely employ 1,500 people across the two sites and what its high-level operating model would be.

In May 2017, Angela Constance, the then Cabinet Secretary for Communities, Social Security and Equalities, announced that the carers allowance supplement would be the first benefit that we would deliver and when we would deliver it.

Swiftly after that, in September 2017, again in evidence that was published in Parliament, we explained our decision to set up in Dundee and Glasgow. I am really quite proud to say that, one year on from that, in September 2018, and essentially from a standing start in the city of Dundee, we were able to deliver the carers allowance supplement, as you have been debating, and put money into the pockets of people in Scotland.

We have been playing a key role in ensuring that our workforce is diverse and reflects society broadly, as well as the clients we want to serve. I am aware that some members have visited Dundee to see that approach in action. That is not just our ethos; there are practical measures behind that. For example, we run job adverts past stakeholders as we develop them, to try to ensure that there are no language barriers to applying for our jobs. We have removed minimum qualifications for our entry-level jobs, which has allowed us to attract people into the organisation whom the civil service would not otherwise have been able to employ. That gives us a real ability to expand our workforce.

We have also been really determined to offer people continuous feedback throughout our employment processes. I am delighted to say that we have people working in Dundee who were originally unsuccessful in applying to the organisation, but as a result of the work that we have done with them, they have been successfully employed. We are trying to embed that approach in everything that we do.

That also applies to our executive advisory body. Our advisory body and our non-executives have a broad range of experience and skills relating to the people whom we serve. Again, that is a conscious move on which we are trying to deliver.

Through the Social Security (Scotland) Act 2018 and the charter, we are building in continuous service feedback from our clients. We will do that in a number of ways as services come on stream. We may come on to discuss that in more detail, but I am delighted to say that, so far, the feedback from clients on the services that we have delivered has been remarkably positive. We are very pleased with that.

At a more general level, we will start publishing more information on the benefit payments that we make and the impact that they are starting to have. A set of official statistics has recently been released on the carers allowance supplement. Although you are probably aware of them, I will give you the high-level figures. More than 77,000 payments of the carers allowance supplement were made in the first tranche. As you have been discussing, that gave more than £17 million of money to carers in Scotland that would not otherwise have been paid. We are incredibly proud of that. The next set of figures on the carers allowance supplement will be released in May.

Over the coming period and into April, we will produce official statistics on the best start grant. We have given early indications about how the best start grant process has worked, but we will push out official statistics in order for you to get a better feel for that.

I will also say, in terms of scrutiny and transparency, that we will of course produce an annual report and accounts. This year will be a part-year set of accounts, covering from our launch in September 2018 until the end of March 2019. James Wallace would be happy to cover those elements. We are in discussion with Audit Scotland about what that report might look like.

I hope that that has given you a flavour of some of our activity and where we are currently. I am happy to take questions.

It absolutely has—thank you for that opening statement. I am conscious that, when committees carry out scrutiny, we sometimes look at where the strains are in an organisation, rather than accentuate the positive. Many of us took the opportunity to see the agency in Dundee, which was a really positive experience. We saw the commendations from service users and the positive feedback that claimants are giving you about their experiences. Funnily enough, I will not ask you about the positive feedback, but it is important to put it on the record.

An agency cannot get things right all the time; that is just a reality and a fact of life. Given the significant case load that has built up, have you received complaints about the carers allowance supplement or, although it is in its infancy, the best start grant? What is your experience of dispute resolution or appeals in relation to that process? Can you give us more information about that?

Yes, I can. We have not yet published official statistics, so I will give a rounded flavour of where we are at, rather than specific numbers.

Is it complaints rather than appeals that you are particularly interested in?

Because of time constraints, I was trying to roll two issues together, but let us deal with complaints.

For BSG and carers allowance, we have had fewer than 100 complaints.

Is that the number for both BSG and carers allowance?

Yes, that is for both of them, across the piece. It is a phenomenally low level of complaints. The vast majority are being resolved at first line, as we term it. That means us acknowledging and understanding what has driven a complaint and, very often, apologising and ensuring that it does not happen again.

Without wishing to dwell only on the positive, we see the phenomenally low level of complaints as a positive. We might come on to the best start grant element of that. What particularly struck me through the launch of the BSG is that, although we had a relatively large number of calls immediately afterwards, there was only one recorded complaint, which was about how somebody had been treated on the phone. There were discussions about how the process took longer than anticipated and about people wanting to know when they would receive information, but only one individual indicated that they felt that they had been inappropriately dealt with.

Out of the 100 complaints, 99 were about process and one was about an individual’s contact with a representative of the agency.

Yes.

It is welcome that there has been such a small number of complaints, given the case load. If you have determined what the issues in the complaints are at this early stage, have any themes emerged?

The vast majority were in relation to policy, rather than service. For example, people might lodge a complaint about the fact that they are not eligible to receive an award. We would acknowledge that as a bit of feedback and make sure that it went back into our wider discussions.

However, complaints tend not to be about service. On BSG, which I am sure that we will come on to, complaints are about people’s expectation of how long it will take before they receive their payment and about the speed of processing. Remarkably, most complaints are about policy.

I conflated complaints with appeals. Have any appeals been made?

People have to go through our redetermination process before they reach the appeal stage. We have had requests for redetermination in the low hundreds. We are working through them—we have set timescales for working through redeterminations—and have considered just over 100 requests for redetermination. Broadly speaking, we have changed the decision in about a third of those cases.

For the other two thirds of cases for which you do not change the decision at the redetermination stage, how many move on to a formal appeals process?

I need to be careful not to tread on official statistics, because the number is one, at the moment. I cannot say too much about that one case in case it identifies them. We are into single digits.

We will want to scrutinise this further at a later date, but there being only one appeal might suggest that the redetermination process is doing its job. Is it your feeling that, although claimants might not like being unsuccessful because of eligibility criteria or other reasons, they at least get a clear understanding of the position, which explains the low level of appeals? Apologies—I do not want to put words in your mouth. I should just ask you why there is such a low level of appeals.

11:00  

It is probably too early to do a proper analysis of what is behind that. A range of factors are involved.

One factor is probably that the best start grant is a relatively straightforward benefit, in that there is not a huge degree of subjectivity around eligibility for it. I would obviously say that how we are dealing with the redetermination process also leads to a low level of appeals. In the feedback that we have received, people have thanked us for explaining why they are not eligible. The work that has been done in the programme, in user design and research on the way that we communicate in our letters to people, is having an impact.

The deputy convener wants to explore a line of questioning, but I have a final question. Although really small numbers are involved, are any themes emerging in relation to successful redeterminations?

The main theme is to do with being in receipt of a qualifying benefit. People have to be not only eligible for an underlying benefit, but physically in receipt of it to qualify. For example, from the information that we exchange with the DWP, we might see that somebody may have applied for UC but is not yet in receipt of it. Those circumstances, however, may have changed by the time that the issue comes through the redetermination process.

I want to be very careful about how I ask my next question, as I do not want to politicise the matter. Are delays to UC causing an issue in relation to the awards that you seek to make? Is that what is being picked up in the redeterminations?

I would not categorise it as delays. In all the systems, there will be inevitable time lags. We saw early complaints about CAS, for example. We take data from the DWP and people’s circumstances will inevitably change after that. People have changed their bank accounts. I think that a parliamentary question was lodged recently about whether we have paid any money to carers south of the border. A tiny percentage of people are involved, as they have moved in the preceding period. There are always movements and people’s circumstances change.

Again, I think that it is too early for us to put any evidence behind what underlies redeterminations.

Yes. You are analysing such a small sample. I appreciate that, Mr Wallace.

It is nice to see you at the committee again.

Redetermination interests me, but I did not fully understand a statistic. Our papers say that a third of the applications for the best start grant were declined. Is the figure that you spoke about a different one? You said that a third of cases were redetermined. Will you go over that again?

A third of best start grant applications have been refused, and people have decided either to accept the decision or to ask for a redetermination. The number of those who have asked for a redetermination is in the low hundreds, and in a third of that subset of cases, we have overturned the original decision that the person was not eligible.

Is that figure high?

Again, I think that it is too early and probably quite dangerous to say one way or the other. As was discussed during the bill process, we have been quite clear that when we see something that we think needs to be corrected, we will correct it. The redetermination process is specifically designed to make that as easy as possible. It is too early to draw conclusions from that, but we need to watch it carefully—

I appreciate your reluctance, but from a bystander’s point of view, I think that the figure seems quite high, although it might indicate that the redetermination process is working. There must be an underlying reason for that.

I go back to the point about UC and finding people in payment. It is not that the original decision was incorrect when it was made; rather, people have now come into payment of UC.

Okay. I am sorry; it took me a minute to understand that.

The redetermination process is very important, and the committee discussed it at length at stages 2 and 3 of the bill. I am interested in the levels of training that staff get and how you have approached the process with staff. Obviously, the redetermination process is meant to be completely fresh and different from the DWP’s process. How have you approached that?

The redetermination process is separate from our first decision making. Structurally, we have put the team that deals with redetermination in an entirely separate part of the organisation. Those staff have had the same training in how the system operates, so they are aware of how people go through the first case. As with the rest of the organisation, we want to instil an ethos whereby, if people are entitled to a benefit, our role is to help them to get their entitlement, not to defend a previous decision or to guard in a different way. We are talking about people’s entitlements; fundamentally, our role is to check and make sure that people get what they are entitled to. We have done a lot of work in getting staff into that space.

When it comes to getting behind redeterminations and obtaining data on what is causing them, it is very early stages, which is why I am being slightly hesitant.

If someone chooses to appeal, the paperwork is supposed to follow automatically. Has the work been done on that? Is that happening?

That is work in progress; it has not been finalised. We are working with the Scottish Courts and Tribunals Service on what needs to be prepared.

On the redetermination process, I should say that a fundamental aspect of what we do is that we pick up the phone to the client, if that is appropriate, so that we can talk through what further evidence they might have and why they want a redetermination. We ensure that there is personal contact with the client during that process.

Shona Robison, Alasdair Allan, Mark Griffin and Jeremy Balfour all want to ask questions, but time is limited. I apologise to members. We will get you all in, but I think that we will be inviting Mr Wallace back in short order, because there is a desire for a longer evidence session. I realise that the delay is our issue, not the witnesses’.

I thank the Dundee staff for their achievement in successfully delivering the carers allowance supplement. That is a good start for the organisation.

It would be helpful to learn more—in writing, perhaps, as time is against us—about the challenges that will be presented by the next benefits coming on stream and how you will marry that with the growth of the organisation, from the point of view not just of the new recruits but of the skill mix that will be required to deliver what is beginning to be a greater variety of benefits, some of which have different claim deadlines, which brings its own complexities. I presume that there will be an organisational plan on how to deal with that. It might be helpful for the committee to have sight of that, if that would be possible.

I can certainly provide further information through correspondence. I should highlight the fact that our interim corporate plan is in the public domain and that we will publish our business plan for next year shortly, which will give some of the detail that you have requested. I can set out some of those details. Would you like me to cover any of that at the moment?

If time is against us, I would be happy for the information to be sent by correspondence.

That is very kind of you, Shona. We will see whether Alasdair Allan will be as kind when he asks his question.

My question is about the local delivery of services. Social Security Scotland’s website says:

“Over time, we aim to build up a network of locally-based staff”.

I have two questions about where planning has got to on that front. First, where are you with planning as regards the service user? I ask my second question shamelessly as a rural MSP. Without taking anything away from Dundee, there is obviously a demand in rural Scotland for civil service job distribution. Is any thought being given to whether, around the edges of what you do, people might be given the opportunity, if they wish to move somewhere else, to take their job with them?

I should point out that there are very rural parts of Maryhill.

Do you want me to answer that now?

I will give you a couple of minutes, then we will move on to the next question.

Local face-to-face delivery is one of the services that will come on stream when the later benefits—those that we have referred to as the wave 2 benefits—start to come on board. It was never intended to be a service that would support the first benefits, primarily because it was not deemed necessary to support people through that process in a face-to-face environment.

We are still at a very early stage. We have 19 individuals who are our local delivery leads around Scotland. Their job is to have those conversations locally with councils, the third sector and current service providers, and to gain an understanding of the landscape.

Throughout all this, we have said that we will not design a model and plant it 32 times across Scotland. Our local delivery model involves 32 conversations—and more—around what is suitable for those environments.

You make a good point about the rural issue. In the conversations that we have started, we have gained valuable information about how services are provided in places such as Argyll and Bute, whether they are provided by the local authority or others. We are very conscious of the rural aspect.

With regard to the outline business case for the whole model, there was an evidential piece of work with regard to why Dundee and Glasgow were our main locations. However, we are open to mobile working for other parts of the organisation, where possible.

What level of detail will there be for the statistics that you intend to release for the best start grant pregnancy and baby payments? I would be particularly interested to see whether you could produce statistics that could show us how many payments were made to third and subsequent children in a family.

To give a proper answer to that question, I would have to discuss the issue with my analysts. One of the reasons why I am not giving specific numbers today is that there is a process that we have to go through to ensure that official statistics are robust, verifiable and evidential.

From the data that we see on a daily basis, we can identify some of those trends, so I cannot see why such information would not form part of a BSG statistics release. It would be useful if you would allow me to take that question offline and provide an answer later.

Okay, thank you.

You may want to take my questions away and answer them later, too. I am happy to receive a written answer.

Yesterday, when I asked the cabinet secretary about where the new employees were coming from, with regard to diversity and how many people have lived experience and what their previous employment had been, I was slightly surprised by the answer. It may have been unfair to ask that question in the chamber. Have you done any analysis of where people have come from and what experience they had beforehand? I appreciate that you may not have the information at your fingertips, but it will be helpful if you could find it out and provide us with it.

On Tuesday, the convener and I had a helpful visit to the Scottish Government offices. I came back from it saying that it was one of the best meetings that I have had since I have been an MSP. It was interesting to see the good work that is going on between the Scottish Government and your agency. Because your agency is new, the Scottish Government is doing quite a lot of the work with regard to data protection and how we are going to design forms, although you have an input into that. Obviously, the cost of that work is being met by the Scottish Government, not your agency. I appreciate that the Scottish Government will not be billing you for that work but, in your discussions with Audit Scotland, is it suggested that that money will be indicatively shown in the accounts? Will there be something that says, “If we were doing this work, the cost would be X million pounds?” That would enable us to have a true understanding of the cost of putting everything in place.

I will come back to you on your first question. On your second question, we can be fairly clear that our set of annual reports and accounts will concern the expenditure for which I am the accountable officer from the point at which the agency went live.

James Wallace can tell you about the financial memorandum and the overall costs.

David is right to say that he is the accountable officer for Social Security Scotland, and our annual report and accounts will report only on the costs of running the system and the payments that we have made as an agency.

Implementation costs were described in the financial memorandum for the bill. You will recall that the initial high-level estimate was £308 million for a four-year programme. The expenditure against Scottish Government budgets for implementation is reported in the Scottish Government’s accounts, which, again, are laid before Parliament.

11:15  

In due course, you will see that the assets that the Scottish Government social security programme is producing will transfer to the agency and become assets on David Wallace’s balance sheet. However, that will not include the full extent of expenditure on implementation. You will have to get that from the Scottish Government’s accounts.

I have a slight concern around the transparency of that. We can find it somewhere—on page 108 of a document or wherever—but is it up to the Scottish Government to let the committee know about the budget: for example, how much of that estimated £308 million has been spent already? Is that an issue for the Scottish Government, not the agency?

Essentially, yes. Alison Byrne may want to come in on that. The agency does not commission the Government and bill back for services. Alison, her team and the wider directorate are Scottish Government civil servants who are working on social security.

As David and James have said, the social security programme is a change programme. That is the space where we design and build the services—with David and his team, obviously—which we then pass to David to deliver. The £308 million identified in the financial memorandum is for start-up costs that the Scottish Government is driving at the moment for the development and design of the services that David and the agency will deliver.

Local delivery is not all about stand-alone social security offices. You will be working in different venues with different organisations and I would like to understand a bit more about what that might look like. Also, with regard to the welcome focus on dignity and respect, you may be working with another organisation that does not have that same commitment. Can you touch on those two issues?

It is about more than just our offices and that we will work with others. The presumption is the other way around. We will be embedded where people are already accessing services. Our delivery leads have started to have those early conversations.

There are two things about our local staff: one is where we base them and the other is where they operate their services from. Across Scotland, we have seen some fantastic examples of people travelling around to libraries, health centres or wherever to ensure that there is a joined-up service. On the whole, people are really responsive to us becoming part of a holistic joined-up service. That oversimplifies it, of course; there is an incredibly complex landscape. We have already spoken to more than 600 organisations that also view themselves as being in some way related to that sort of space, so it is phenomenally complex.

Yes, we intend to be where people are already going to access services, but I agree with Alison Johnstone’s other point that those places also have to ensure that they deliver against our values of dignity, fairness and respect. We have tried to do that with our interim locations. Where we are basing people in Dundee and Glasgow, it is no accident that they are within shared local authority buildings where services are already being delivered to clients. We want to explore that theme further.

I want to revisit the money. I have been looking at the figures that we have been given over the period, and in our papers for today there is an estimate of the steady-state running costs. For clarification, before we go further into the discussion, I take it that those are revenue figures and that capital does not come into it. If I am reading it correctly, there is no asset transfer of information technology, as such; that seems to be a shared service cost. Am I correct in saying that?

Do you mean the current IT shared service?

Your running costs for 2019-20 refer to shared service costs including IT, human resources and procurement.

That would tend to be desktop services—the hardware and connectivity on people’s desks—that are delivered to us by the Scottish Government. Aside from our arrangement to work closely with the Government’ social security programme, wherever possible we take shared services, which, in the main, are from the Scottish Government.

When we look at the steady-state running costs, which are estimated at between £144 million and £156 million, that is purely revenue.

Yes.

Yes.

I am interested, then, in the relationship between the cost of running the agency and what you deliver. Are you comfortable that that figure is correct? Has there been any alteration to that figure?

Those figures come from the outline business case, which I referred to earlier. That public document is still the source of the estimate that we are working from. Because of the way in which this operates, there will inevitably be service design changes that will have an impact. Some of those changes will be very small and some will be large, for example a commitment to a freephone service. Things like what assessments look like, where they are delivered, whether we give people a choice about assessment or whether we want to move any face-to-face assessments closer to people’s homes are all service design conversations that in some way will have a consequence for running costs. However, those are the current figures that we are operating against.

And that is against the full delivery package of £308 million-worth of benefits—

I think that it would be £3.2 billion.

It would be £3.3 billion of benefits. The £308 million is Scottish Government implementation costs to set up the systems and processes required for delivery. There is an implementation cost to build the systems and then there is an annual running cost to pay out the benefits under that system every year. At the time that the outline business case was written, the steady-state running cost of benefits and administration was around £3.3 billion.

In your planning around the relationship between cost and delivery, did you have a target figure?

James Wallace might correct me, but the figures were built up from what we knew about the existing operating model for DWP delivery in Scotland. In constructing that, the target was not to arrive at a ratio of administration costs to benefit expenditure.

You expect it not be vastly different in the long run.

On those numbers, it is about 5 per cent, which is in line with the existing system.

The DWP is around 3 per cent, is it not?

Not for non-pension benefits. In the financial memorandum to the Social Security (Scotland) Bill, the Scottish Government estimated what it potentially cost the DWP to administer non-pension benefits as a proportion of the benefits that the DWP administers in Scotland. Our estimate of that was 6.3 per cent, and our estimate for Social Security Scotland was 5 per cent. That is intended not as a stark comparison between the DWP and Social Security Scotland, but as an indication that the basis of our estimates is sensible and reliable, and that we would expect the figures to be broadly comparable.

But the current agency agreement that we have is running at about 2.2 per cent, is it not?

It is. As a proportion of the carers allowance, it will be in that region. However, that is not the full range of activities that are required to deliver carers allowance.

We have got a good deal at the moment.

I think that the DWP has been fair, but the work that is involved in delivering carers allowance in Scotland is not solely the agency agreement. Work is carried out by Social Security Scotland and within the Scottish Government to ensure that Scottish recipients of carers allowance get their carers allowance, even though there is an agency agreement with the DWP.

To go back to the other discussion, the figures are based on that being the service. Any changes to it will be entirely out of scope.

I see that we are running out of time, so I will not ask any more questions.

Perfect timing. We had eight questions from MSPs in a relatively short period, so I thank MSPs for their focus and the witnesses for their concise answers. I thank Alison Byrne and both Mr Wallaces for coming along. We hope to see you back, probably in relatively short order, because there is a thirst to expand our lines of questioning.

We will move to agenda item 6, which we previously agreed to take in private.

11:25 Meeting continued in private until 11:34.