Seòmar agus comataidhean

Lesley Jackson, did you want to come in?

One issue is clearly the current political and economic instability. The UK economy is flatlining and there is a lot of turbulence in the political situation, so people may be afraid to invest—that tends to be the situation. However, we can look at the benefits of capital. Your submission says:

“a permanent increase in the economic infrastructure investment rate of 1 per cent of national income permanently raises GDP by around 4.9 per cent and for social infrastructure (eg housing, health, prisons) it is about 3.5 per cent.”

There is obviously a balance to be struck between those two, but both are extremely positive. However, although the Scottish economy has had a huge increase in capital allocation this year, it will decline over the next four or five years and we will be where we were a couple of years back. There is not really any major advance in catching up to international competitors, as you suggested.

How does the Scottish Government tackle that, given the restrictions on capital that we have as part of the fiscal framework?

It is more or less the UK that decides our capital.

All else being equal, although I think that people want to buy locally, doing so might be 20 per cent more expensive, and that public money could be better spent with a company 25 miles up the road that might be more efficiently and effectively run.

Price, quality and delivery are what it is all about, is it not? It is about the right price and the right quality, delivered on time—if only, eh?

Tom Ockendon, on capital, you said in your paper:

“Investment in the Affordable Housing Supply Programme (AHSP) should be a priority for the Scottish Government’s capital spend.”

You went on to say:

“Crucially, government grant in Scotland is still around 50%—which should not be altered through capital spend plans. Any changes to that ratio—as seen in England where grant has been as low as 15% in recent years—risks pushing rents up.”

Have you heard that the Scottish Government is planning to reduce the grant from 50 per cent, or is it just something that you wish to flag up at this point?

We continue our evidence on pre-budget scrutiny, this time with a focus on social security in the context of fiscal sustainability. For our second evidence session, we are joined by Shirley-Anne Somerville, Cabinet Secretary for Social Justice, Ian Davidson, deputy director, social security policy, James Wallace, deputy director, social justice finance lead, Scottish Government, and David Wallace, chief executive, Social Security Scotland. Good morning and welcome to the meeting. I invite the cabinet secretary to make an opening statement.

You talk about anti-poverty measures, but are investments in colleges, local government and the university sector not anti-poverty measures that allow people to do more with their lives—more so, for example, than spending additional money on benefits?

Thank you for clearing that up. As I said, my understanding from evidence taken two weeks ago was that the matter was still under discussion, and COSLA seemed to think that, too. I am glad that you have put that on the record today. It clarifies an important point.

I want to talk about childcare. One of the great achievements of the SNP Government has been the increase in the number of funded childcare hours. When the SNP came in, the number was 412 hours and provision was means tested. It is now 1,140 hours for three and four-year-olds. That is a big achievement. The system has been better resourced than is the case down south, where there are staffing and funding issues, but it seems to me there are some advantages in the system down south. One of those is the fact that working parents can get support from when their child is nine months old. In Scotland, we have that support from the age of two years. Also, it seems that, if you have income of more than £850 a month, you do not get that childcare. Basically, mothers who are working do not get childcare support, but mothers who are not working do. That is the reverse of the position in England.

How will it persuade women to get into work if they lose childcare by going into a job? I understand that there is a threshold of 20 hours a week, as well as £850 a month. That seems to me to be trapping people in poverty as opposed to encouraging people into employment.

Fifty-seven per cent of people who are in receipt of universal credit are in work, so that is a point well made. There is no means testing in relation to three and four-year-olds, but there is in relation to two-year-olds. However, it is a fact that, if you are in work, you do not get free childcare, but if you are not in work, you do, which seems the exact opposite of how it should be. That is the opposite of how it is in England. Where is the incentive for people to get themselves a job, especially given that someone who has been unemployed for a long time will not necessarily be able to get a well-paid job? People end up in a poverty trap whereby they lose certain benefits once they earn an amount that is above a certain threshold.

There is a real disincentive for people to find a job. That is the crux of the matter. It is not just about providing benefits to a certain level; it is about getting people to change their lives so that they realise the opportunities that might be available to them. I am struggling to see how giving childcare to people who do not work while denying it to people who do work is in any way positive.