Seòmar agus comataidhean

Thank you for that bold and helpful opening statement. I am delighted that you are here this morning because we have discussed social security ad infinitum over the years on this committee, but it has always been through a finance secretary rather than with you or your predecessors—those who are directly responsible for it.

The catalyst for inviting you here this morning is the article in The Scotsman about the £36 million that, allegedly, the Scottish Government is not pursuing. That caused considerable concern among members of the committee. In relation to the freedom of information requests, a Scottish Government spokeswoman was quoted as saying:

“The Scottish social security system is focused on treating people with fairness, dignity and respect. Scottish Ministers have been clear they cannot support UK Government proposals to take powers to recover directly from an individual’s bank accounts without requiring a court order, or to potentially suspend driving licences.”

It is suggested in the article that although the spokeswoman said that there was no hole in the Scottish budget, there was no elaboration on where the money would be found to write off the £36 million in alleged fraud and overpayments. Clearly, if that is not recovered, that would be £36 million lost to the Scottish Government. You talked about fraud methods. How are we ensuring that fraud is minimised? What is being done to restore that money to the Scottish budget?

Universities Scotland told us that

“the flexible workforce development fund”,

which is

“valued at £10.5 million a year, was discontinued in 2023-24”

and that

“the Open University ... had to turn away ... 1,000 learners”,

many of whom, I imagine, would have been from disadvantaged communities. Universities Scotland also told us that

“The Scottish Funding Council’s upskilling fund”,

which was

“previously valued at £7 million ... was also discontinued”

last year. Those measures have been taken to save money here and there, yet, as you pointed out in your opening statement, additional funding of at least £1.2 billion—the Scottish Fiscal Commission said that it is £1.3 billion—is going into measures over and above devolved benefits. However, that £1.3 billion is coming out of other areas. Local government tells me that it is having to cut virtually all non-statutory services, including support for people with debt, for example, people who are unemployed and childcare facilities.

It is not as if the money that the Scottish Government is investing in welfare is over and above; it is being taken from those other services. Therefore, because of the emphasis on welfare, other areas are being denuded of resources, including areas that local government feels are essential to get people out of poverty. That is the irony of it. The Scottish Government keeps talking about welfare being an investment in people, but what analysis has been done to compare the outcomes for people who receive higher benefits with the outcomes for people from investing in employability, college places or universities?

I think that everyone would agree that those payments will make people’s lives less awful if they are on benefits, because more money always does. However, how does it lift people out of poverty and give them a different kind of life, in which they will be in employment, be able to look after themselves in that way and not be dependent on benefits? That is where we are going.

I understand that the Convention of Scottish Local Authorities raised a concern about the two-child cap a couple of weeks ago. I raised that with the Cabinet Secretary for Finance and Local Government, who said that there were on-going discussions with the UK Government. The Scottish Government signalled the policy change a considerable number of months ago, and the Labour Party said that it would support the budget only if we ended the two-child cap during this financial year. To be honest, that was a bit of kidology. If that is the case, why are discussions still on-going about whether housing benefit and council tax benefit will be impacted by the ending of the two-child cap? In other words, if we give families additional resources through ending the two-child cap, they could no longer be eligible for other benefits. Has that been sorted now? Two weeks ago, my understanding was that the matter was still under discussion.

The term was “vulnerable two-year-olds”.

There is still a cash threshold of £850 a month.

I will ask a final question, because colleagues are keen to come in. The Scottish Parliament information centre says that, over the next five years, the amount that is spent on social security in resource budget will increase as a share of the Scottish budget from 14 per cent to 20 per cent—from £6,332 million to £8,684 million. We all appreciate that that is demand led, but within five years the Scottish Government’s decisions will have added £1.5 billion to the total as a result of the Scottish child payment and other things that have been mentioned.

The Scottish budget is not likely to grow much. If we are lucky, we can maybe add 1 per cent in real terms. Consumer prices index inflation will go into welfare payments, but the gross domestic product deflator is what tends to be involved in our resource budget.

How do we manage to continue to afford an effective welfare system without impacting on every other area of Scottish Government spending? Whether we look at justice, where we have 800 fewer policemen than we had five years ago; the national health service and integration joint boards, which are all chronically in debt at the moment; or struggling universities, colleges and so on, welfare spending appears to be squeezing out other areas of expenditure. Ultimately, that has an impact on the Scottish economy, growth, the tax base and the ability of the Scottish economy to employ people who are currently in poverty.

I am sorry, but I do not recognise those figures. SPICe and the Scottish Fiscal Commission have said that it is going to go from £6.33 billion to £8.7 billion.

Well, hold on—not necessarily. Adult disability payments are projected to go up from £3.6 billion to £5.4 billion and the number of claimants to go up from 529,000 to 703,000, which is a colossal increase of 174,000 in four years, even though some people who are on the benefit will pass away. However, Scottish Enterprise pointed out that half of the people who are on the adult disability payment are already in employment, which suggests that enhanced support for employers who recruit disabled people might be a better approach, and it would reduce the impact.

Thanks very much. I look forward to getting a reply to the letter that I sent two weeks ago about why I never got a notification of that meeting.

I first raised the issue of tapering at the SNP conference in 1986, so it is a long-running saga.