Hansard

Thank you, convener, and good morning to everybody. First, I put on record my thanks to the previous convener of the committee, Sandra White, for all her work, especially on social security. I welcome Clare Adamson to her new role as convener—I look forward to working with you, Ms Adamson. I move to the specifics of why we are here this morning. Following publication last week of the draft budget, members will be aware that the communities, social security and equalities portfolio focuses on our overarching aims to create a fairer Scotland; to support inclusive growth; to tackle inequalities; and to promote community empowerment and the participation of people in all aspects of Scottish life. Through the budget, we as a Government have continued to prioritise funding to support our major expansion of affordable housing and to reach our target of 50,000 new affordable homes in the current session of Parliament; to tackle fuel poverty and support our targets on climate change; to regenerate, strengthen and empower our communities; to support the third sector and develop social enterprise; to promote equality; to continue our efforts to tackle poverty and inequality; to continue to mitigate the worst impacts of the UK Government’s welfare cuts; and to continue our work on policy and operational plans for delivery of the 11 devolved benefits using our new social security powers. Key points in the draft budget for the portfolio include the introduction of a tackling child poverty fund that is worth £50 million; an investment of £20 million in the empowering communities fund to tackle poverty and inequality; and continued priority for community engagement to advance equality in Scotland. Under the social security budget, we will make funding transfers to local authorities to support the continuation of the Scottish welfare fund, which has proven to be necessary to provide support for those who find themselves in emergency financial situations. In addition, we will continue to fully fund discretionary housing payments to mitigate the losses that are affecting more than 70,000 households as a result of the bedroom tax that has been implemented by the United Kingdom Government. As the committee will be aware, the Scottish Fiscal Commission has prepared forecasts to accompany the budget. You will see that, for DHPs, we have utilised the SFC forecast in full and are allocating £62 million, which is an increase of £12 million—or 24 per cent—since 2016-17. Similarly, for the Scottish welfare fund, we have utilised the SFC’s forecast of £33 million, thereby maintaining the value of the fund. The SFC has forecast that an additional £1 million may be required in 2018-19 to mitigate the UK Government’s reduction in assistance for housing for 18 to 21-year-olds; we will monitor whether that requirement materialises and make additional funding available to the Scottish welfare fund if necessary. As in 2017-18, the social security programme will continue in 2018-19 to draw on a level 4 budget of £75 million, which is held by the finance and constitution portfolio, for the implementation of provisions in the Scotland Act 2016. That approach will allow us to continue to adapt quickly throughout implementation to be effective in meeting evolving policy circumstances and expectations. We have not made budget available for the payment of benefits in advance of the completion of parliamentary scrutiny of the Social Security (Scotland) Bill. As executive competence for the benefits that are to be devolved is transferred to the Scottish Government, we will make budget available as required. Executive competence transfers will in future trigger block grant adjustments in order to provide the funding that will enable us to make budget available. Those transfers, and associated forecast expenditure, will subsequently need to be reflected in the Scottish budget. The timing of the addition to the budget will depend on when the benefit in question is devolved. For example, if a benefit were devolved mid-year, we would expect that a block grant adjustment and the associated budget would be reflected in the Scottish Government’s in-year budget revision process. The addition would then be scrutinised by the Finance and Constitution Committee and approved by Parliament. Although it is not possible to allocate funding for specific benefits until the Social Security (Scotland) Bill is passed, I can confirm that, as the Cabinet Secretary for Finance and the Constitution has said, additional funding will be allocated in-year to support the landmark step of increasing the carers allowance in the financial year 2018-19. The increase will be delivered by summer 2018, and will be backdated to April of that year. This year, alongside the introduction of the Social Security (Scotland) Bill, there have been other positive developments in the social security programme. Those include our recruitment of 2,400 volunteers to our experience panels; the decision to locate the new agency headquarters in Dundee, with a major centre in Glasgow and locally based social security staff across Scotland; the awarding of a two-year contract to IBM UK to build the first phase of the new social security information technology system that will enable us to deliver the initial set of benefits that we have announced; and the stage 1 debate on the bill, which took place on Tuesday, for which I record my thanks to the committee. All that work has been informed by our continuous engagement with key stakeholders, our expert advisory group, our experience panels, and members and committees in Parliament. As part of our transparent approach, we recently sent the committee a copy of the detailed information that we provided to the Public Audit and Post-legislative Scrutiny Committee, which breaks down the £190 million high-level estimate for the cost of IT implementation that is specified in the financial memorandum to the Social Security (Scotland) Bill. I hope that the breakdown has assisted members to see how our initial estimate for IT has been built up, and I have committed to provide regular updates on IT implementation, which will allow me to share with the committee how actual implementation costs compare over time with the initial estimates. As we continue our work, we need to remember the important role that our relationship with the Department for Work and Pensions will play throughout the devolution process; our shared and effective work is critical to delivery. The relationship is reinforced by our forums for resolution, which provide an opportunity to discuss any issues that may arise: the joint ministerial working group on welfare, which deals with policy related issues, and the joint exchequer committee, which deals with financial issues. This committee will continue to have oversight of those forums, and my officials and I will ensure that members are kept abreast of developments as we make progress. I thank you, convener, for the opportunity to make those opening remarks. I am more than happy to take questions, assisted by my officials.