 Good morning, everyone, and welcome to the 24th meeting of 2018 of the Social Security Committee. Can you remind everyone to turn mobile phones or other devices to silent mode so that they don't disrupt the proceedings of the meeting? We've got apologies this morning from Jeremy Balfour, who unfortunately cannot be with us. We're hoping that Gordon Lindhurst will belong to join us at some point and he's been delayed in relation to that, and hopefully we'll have a full complement in due course at the meeting, but we're not quite there yet, and we move to agenda item 1, which is a decision to take an item in private, and the committee has asked to agree that item 4, consideration of evidence, is taken in private. Is the committee agreed to that? Thank you. We now move to agenda item 2, social security and inward property, and this is the final evidence session of the committee's inquiry into social security and inward poverty. I welcome Shirley-Anne Somerville, Cabinet Secretary for Social Security and Older People, Alison Byrne, Deputy Director of the Reserved Benefits Division and David Sutterhead of Fair and Inclusive Work Practices, Scottish Government. Thank you all three of you for joining us this morning for this final evidence session. I could ask the Cabinet Secretary who always got an opening statement for us this morning to deliver that now. Thank you, convener, and good morning. I'd like to thank the committee for the opportunity to be here today. This inquiry is extremely timely, and I've been following your evidence sessions with great interest. Only last week, the UN's special rapporteur on extreme poverty and human rights highlighted significant concerns about levels of poverty in the UK, and the Scottish Government shares those concerns, including the devastating impact that UK Government welfare cuts are having on Scotland's people and communities. Where we can, we are taking decisive action across a wide range of areas to lift people out of poverty in Scotland, and I would like to say a few words about this today. For most people, work remains the only viable path out of poverty, yet simply being in employment is no guarantee. As the committee will no doubt have heard, the majority of children and working-age adults in poverty live in working households. Between 2014 and 2017, 66 per cent of children in relative poverty after housing costs and 59 per cent of working-age adults in poverty were living in a working household. When DWP officials gave evidence to your inquiry recently, they stated that full-time work virtually eliminates the risk of in-work poverty. That, they explained, was the rationale and their pinning universal credit. Our own evidence, however, suggests something very different. For example, over a third of children in poverty in Scotland—that is 100,000 children—live in families where at least one adult is in full-time work. It is unacceptable that, in the fifth richest country in the world, people are struggling to put food on the table, food bank use is on the rise, and working families are having to choose between eating and heating their homes. The Scottish Government is using our full range of devolved powers to provide additional support where we can to mitigate the impacts of welfare reform and support people on low incomes. Across other ministerial portfolios, we are providing £750 million in an attainment Scotland fund to help to close the poverty-related attainment gap in our schools, delivering free school meals for primary 1 to primary 3 children, giving families an annual saving of £380 per child, delivering a school clothing grant where eligible families will receive at least £100 to cover costs of school uniforms, increasing our fair food fund to £3.5 million in 2019-20 to support dignified responses to food insecurity, focusing £2 million to support families during school holidays, extending access to free sanitary products to low-income women and girls, providing £3.3 million over 2018-20 to provide financial health checks to low-income families and older people to help to reduce costs and maximise incomes. And since August 2017, if the newborn in Scotland has received a baby box, Scotland is the only country in the UK with statutory targets to ultimately eradicate child poverty. The child poverty delivery plan, which was published in March, was backed by a multimillion-pound package of investment, including a £50 million tackling child poverty fund. We believe that sustainable and fair work is a long-term route out of poverty for families, so we are taking action to support parents to work and earn more. Over the next three years, we will be working to lift at least 25,000 more people on to the living wage through our work to build a living wage nation. Likewise, we are using our limited employment support powers. We launched Fair Start Scotland, our new employability service, in April 2018, which is estimated to positively impact around 7,000 children living in poverty by placing their parents into fair work. We will also invest £12 million to help unemployed parents to move into work and parents into work to build skills, progress and earn more. Your inquiry is rightly focusing on universal credit and the damage that this is causing. It is impossible to speak about inward poverty without mentioning the impact of UK Government welfare reforms and the introduction of universal credit. There is a mountain of evidence that universal credit is pushing people into poverty rather than helping them out of it. The UK Government has consistently ignored calls from the Scottish Government, from charities and from the third sector organisations to halt the roll-out of universal credit until improvements are made. It has also ignored the findings of the National Audit Office. It remains to be seen whether it will now ignore the damning findings of the United Nations special rapporteur who said that, although it is an initial conception, in its initial conception it represented a potentially major improvement in the system, it is fast falling into universal discredit. I know that the Trussell Trust provided evidence to the committee on the 52 per cent increase in food bank use in areas where universal credit has been rolled out for 12 months or more. The report goes on to predict that, as managed migration rolls out, demand on food banks will increase. Additionally, the Joseph Rowntree Foundation is clear that the single biggest cause of the rise in child poverty across the UK is the UK Government's welfare policies. The Scottish Government's 2018 welfare reform report highlighted that in 2020-21 it is estimated that an annual social security spend in Scotland will be £3.7 billion lower than it otherwise would have been as a result of UK Government cuts. The report also states that, since the benefit cap was lowered in 2016, around 3,500 Scottish households have been capped each month. That policy has disproportionately affected families with children. Of those families who have been capped, 89 per cent contain children and 64 are lone parent households. In the face of that massive reduction in spending, the Scottish Government expects to spend over £125 million in 2018-19 on welfare mitigation measures and measures to protect those on low incomes. That is over £20 million more than the previous year and £40 million more than the year before that. Since October 2017, the Scottish Government has been using its powers to give people in Scotland the choice to receive universal credit award either monthly or twice monthly and to have the housing cost in their universal credit award paid direct to the landlord. That is helping to people on low incomes to better manage their budget. However, the Scottish Government is not here to paper over the cracks of the UK Government's welfare reforms. We simply cannot afford to cover the costs of welfare cuts, which amount to billions of pounds per year in Scotland. That is equivalent to three times our annual police budget or the entire annual budget of both NHS creator Glasgow and Clyde and NHS Lothian. In the end of his visit statement, the United Nations special rapporteur on extreme poverty and human rights said that it is outrageous that devolved administrations need to spend resources to shield people from government policies. Although the majority of social security is still reserved to the UK Government, it therefore has a duty to ensure that that system operates as a safety net, protecting those who need it most and preventing people from being pushed into poverty and destitution. Amber Rudd has said this week that she wants to have a fair, compassionate and efficient benefits system, and I have written to her about the issues that we are currently facing and hope that this commitment will lead to a change in course from the UK Government. Thank you for your time and I would be delighted to take your questions. Thank you very much, cabinet secretary. There was a lot in that. There is a focus to this inquiry. Yes, we have looked to universal credit and we have strayed into parts of universal credit that is not necessarily related to any poverty. I think that that is understandable, given what many of us would see as the car crash happening in front of our eyes in relation to the roll-out of that, but there is a slow-moving car crash potentially in relation to future actions under universal credit, and that is the migration of those inward benefits such as tax credit entitlements into the universal credit system. That certainly raised quite a lot of concerns. I am sure that you will be aware that the DWP's policy intent is to put conditionality on those who are currently receiving tax credits when they move into universal credit, and that being that a lot of low-paid vulnerable workers supported in employment will have to either increase their hours or increase their rate of pay to make sure that they are not sanctioned or penalised in some way while still actively in work. I might start off by asking your comments on how workable you think that system will be. Just to touch on one of the first aspects that you mentioned about the managed migration on to universal credit, that is an area that is causing extreme concern given the sheer number of people that will be involved in it. That is still due to begin in the summer of next year, and there is that great concern not just from the Scottish Government but from others that that managed migration will begin to roll out despite the fact that we know from the evidence, as I said in my opening statement, that there are a great number of problems with universal credit. One of the challenging aspects of that in particular will be that many people will move into the benefits system for the first time. They will not, under the current regulations, move forward automatically. They will need to apply for their universal credit, and therefore there is a great deal of concern that particularly some of the most vulnerable people will miss out and will not know that they are required to move over. There is a number of concerns about managed migration and the people that will be coming into the benefits system for the first time, particularly around their awareness of sanctions and the impact that that will have. You mentioned, convener, the work that we will have to do on those that will experience inward conditionality. That is a great concern. We may come back at some point to discuss the effectiveness of sanctions and conditionality in the round, but the new policy from the DWP to sanction those who are not doing as they see it enough to get increased hours or to move to a higher paid job really does not take into account the actual individual circumstances of the people that are involved, the local labour markets, the fact that there may not be higher paid jobs for people to move to, that they simply cannot magic up extra hours to go into at that point, so there is a great concern just in particular around the inward conditionality and how that will affect people. When I'm certainly worried about constituents of mine who are out there busting, I got just now part-time hours, minimal wage to be a role model to their children, for example, to get to work and show them the benefit of work for households who will be told that they're not working enough hours or they're not enough money, and that's somehow their fault. Russell Gunnison from the IPPR told the committee the idea that it is the sole responsibility of the claimant to increase their hours or earnings to satisfy the universal credit system bears no relation to reality. That's what the committee was told, so I'm wondering what the reality is. We know the reality is that there will be conditionality on in-work claimants to increase their hours or increase the rate of pay, and that Jobcentre plus and DWP will have to decide what an appropriate increase of hours would be or increase in pay. Cabinet Secretary, there's a shared space here. The UK Government has that policy intent, and they would talk about work progression in relation to that, but the Scottish Government and local authorities, as part of that shared space, have things like Skills Development Scotland, the local authorities have various agencies that they use to support upskilling a workforce in support—not least of all childcare support, for example. I'm just wondering what discussions has there been between the UK Government, the Scottish Government and local authorities in terms of how they can operate in that shared space to support work progression for constituents that we all represent, to avoid them being at risk of sanction? Has there been discussions around that? There are discussions about the aspects that are now devolved to the Scottish Government, so about employability, and Mr Hepburn, as the relevant minister, attend, for example, a joint ministerial working group where aspects can be discussed. That's specifically around the areas that are devolved. The wider aspect around how we can have awareness of what the DWP is planning, it would be fair to say, is not at such a good stage. The DWP, for example, does not proactively share its thinking along aspects to do with in-work conditionality. There is an imperative on the DWP to share that information timuously. We will, when it comes to sanctions, never agree that that is an effective or useful policy that we should go round. However, we certainly need to be aware of what the DWP's intentions are so that both the Scottish Government and, as you mentioned, local authorities and the Scottish Government agencies have full awareness of that and can adapt accordingly. There are certainly areas around in-work conditionality, as an example, where there needs to be a greater sharing of information from the DWP, so that we can be sure about the impacts that it will be having up here. However, I would make it clear that the Scottish Government, within its work on employability, does not support sanctions and has never believed that sanctions are an effective way of encouraging or forcing people into work. Indeed, the evidence has shown that in-work conditionality is not effective. The national audit office, for example, was particularly concerned about that, so we will continue to have that policy disagreement with the UK Government around the use of sanctions in in-work conditionality and, indeed, further in the welfare system. That was a lengthy and detailed and helpful answer. However, I suppose that that does not require a lengthy answer, cabinet secretary, but, at the heart of what I am asking, has there been any specific discussions about what progression would look like between the Scottish Government and the UK Government, given the shared space and the various agencies that would have to support that kind of career or work progression? Has there been any conversation at all in relation to that vis-a-vis universal credit and the benefits system? Certainly not seen the detail that is emerging on the DWP's thinking on work progression, but I am happy to provide the committee with further information in writing when I can check with officials to which extent that detail has been going on. Obviously, it is not an area that sits within my remit in particular, so we can ensure that the extent of that discussion can be furnished to the committee in due course. I want to take in a second or the last thing that I want to ask, because I just want to put the peace arrow from the DWP when we were asking about in-work conditionality or, as I like to call it, sanctioning people who are actually going to do a day's work, quite frankly, because that is what we are talking about. We are very clear that that policy has still been developed, because we need to do a lot more research before we can say what the best way forward is on this. What would your comments be, irrespective of what level of discussion there has or hasn't been, between the Scottish Government and the DWP? Should there be a formal process of engagement in relation to those discussions? Should there be some form of joint sign-off or protocol in relation to what work progression would look like and how that interacts with the benefits system, given that shared space where the Scottish Government has responsibility for upskilling through the college sector and education more generally, local authorities have had a responsibility in relation to childcare and in other ways, yet the DWP is forging ahead in relation to saying what work progression will look like. There is not have to be some form of formal protocol around what the reality of that is, so the Russell Gunns' comment that I started off with is that there is no relation to reality that can be fixed. We would certainly encourage and have encouraged the DWP to look at widening the meetings that already take place in official level around, for example, employability, to widen that out to include the issues that you have mentioned. Of course, Mr Hepburn and myself would look to have similar wider discussions within the joint ministerial working group. There is certainly no barrier from the Scottish Government's point of view of wanting to try and encourage a realisation of what is happening within the labour market in Scotland and the potential impact of the end-work conditionality that DWP is suggesting. What is the bits for supplementary? What is the name check to people who have caught my eye? I am going up to the deputy convener in a second, but I have always got Alice Rallan and Shona Robison who want to come in this area. Pauli McNeill. Good morning, cabinet secretary. The convener talked at length about the transfer of tax credits to the benefit system, which, as we have established, will probably still be a shock to a great number of people who, as you say, have not been involved in the benefit system. In your view, cabinet secretary, is there a case for arguing with the DWP that actually the tax credit system has worked pretty well? It has taken a lot of children out of poverty. Given that it does not seem to the evidence that I have heard so far that the DWP is equipped to take on all of those acclaimants over to the DWP, would it not be better to argue that we would just leave the tax credit system alone and leave it with each MRC? Certainly, we have on a number of occasions written to the UK Government. I think that we are up to eleven letters now to strongly urge the DWP to halt the roll-out of universal credit. We had wished to do that before this point, but now that we have reached a very crucial stage where managed migration is the next challenge coming along. As I said to the convener, there are a number of concerns, as the committee has heard, around the use of universal credit. There are particular concerns around the UK Government's managed migration draft regulations that they have still not listened to. I do not believe the evidence on the impact of that. There has been a very strong call from the Scottish Government to halt the roll-out of universal credit, so that managed migration does not happen and people do not move over from tax credits to the benefit system. Indeed, I wrote to the new working pensions secretary of state Amber Rudd within her first couple of days to impress on that point once again. Just to clarify, that was in relation to the full roll-out of universal credit. It is to halt the roll-out of universal credit. I do not want to see one single more family or individual moving on to universal credit. We are, unfortunately, reaching the stage where we have had the roll-out of the live system, but I do not want to see the managed migration. I think that I am on record as supporting the Government on this, and I hope that that is accepted, but it does not seem that that is going to happen by all accounts. Should we not have a plan B if we cannot stop the halt of universal credit? Maybe there are parts of it that we need to try and argue sensibly that I can think of lots of areas such as taking self-employed people out of universal credit would help to do away with a four-week period to stop fluctuating earnings. I have had my first case this week of a single-parent family who have been in work for one week out of work, been in work for 30 years and have had zero tax credits this month as a result of the transition. I just struck me as it may be that if we are not going to get the halt of universal credit, there might be some sense in the DWP, I do not know, to say, while we would at least halt the transfer of tax credits, it would be at least save some families. Certainly there should be a halt to that managed migration so that those on tax credits do not move over. The new secretary of state has said that she is listening. I have to take her word at this point that she has realised and has recognised that there are a number of concerns around universal credit. She has the opportunity to act and act quickly to, for example, change the draft regulations for managed migration to deal with a number of the still glaring problems that are within managed migration. If she does not and she insists in moving along with managed migration, then absolutely there are specific details within universal credit that we should look at to change, and my letter to the secretary of state goes into a number of them in great detail. One example of the concerns about the managed migration is that tax credit recipients will also not benefit from that two-week run-on that was made so much of during the UK budget process that they will still need to claim their universal credit for that. There are a great number of very detailed, specific concerns around managed migration, and the Scottish Government made a very detailed response on that. I will not give up because the evidence is so strong, and the UN rapporteur has once again reiterated the damage that is coming to universal credit that the new secretary of state has an opportunity to act. She says that she is listening, and if she genuinely is listening, it will not take her long to hear the outcry from charities about the need to stop universal credit roll-out, full stop. I am sure that we will come back to some of that in the deputy convener, Alice Rallon. I am interested to know to what extent the Scottish Government feels that it has been involved in the development of the thinking behind some of the policies around the universal credit roll-out, particularly around the issue of sanctions for people who are in work. Most people's intuitive understanding of how they get from a low-paid job into a better paid job involves training and opportunities and education. It does not normally involve being sanctioned into a better-paid job or punished into a better-paid job. I am curious to know to what extent, along the way, the Scottish Government feels that they have really been asked their opinion about whether that even works. I am not sure that we have been asked our opinion, but we have certainly given it every opportunity around that. That is because the evidence around the effectiveness of sanctions is very clear. There has been, for example, a five-year longitudinal academic study that looked at sanctions and conditionality, and it concluded that it had, and I quote, "...universally negative impacts on people". The evidence is very strong that this is not a way forward. When we are looking at what the Scottish Government is doing, it is about upskilling, for example, through the flexible workforce development fund, through an attempt to encourage better awareness of the opportunities that are out there, but always on a voluntary basis. Certainly, the feedback that is coming back for the employability services, for example, that the Scottish Government is running and that voluntary way is ensuring that people feel supported. Therefore, they will come back to their key worker and be supported in a process of upskilling or trying to get into the workforce. That is very different from feeling that they will have an adversarial relationship in many cases with their work coach in the DWP. That is proven to be effective. The evidence that will come from the employability services around the Scottish Government will demonstrate that that is effective. It is very clear, and I have quoted one study out of many, that sanctions do not encourage people to get into better-paid employment. Given the different start-up points that the two Governments clearly have on that, you have mentioned how devolved services are there to try to provide opportunities for people to get into the better work. If there is any, what is the point of contact or the point of engagement? How do devolved services engage to ensure the progression of the type that we are talking about when the benefit system seems to be going in an opposite direction? How are devolved services geared up to cope with this difference and approach? We made it very clear, for example, when the employability powers that we have limited, though they are, were devolved to the Scottish Parliament, that sanctions would play no part in that. I mentioned that Mr Hepburn and I attend joint ministerial working groups on that aspect. There are a number of groups that are official levels that look at where we are very specific and very definite in our determination to not have sanctions happening. That therefore encourages people to get involved and to take part in services within Scotland in a way that I do not believe happens elsewhere in the UK. However, I take the point that many people are still frightened of the overall system. They are fearful of sanctions in general. Fear of sanctions still does weigh heavily on many people, despite the reassurances that we can provide over the aspects where we are devolved. You mentioned that you quoted the UN rapporteur in your opening remarks. I do not think that you quoted some of the strongest things that the UN rapporteur had to say, but I am curious to know where you feel the human impact of the process that we are talking about in work conditionality and some of the sanctions associated with it, and what the consequences are that you feel devolved services might have to pick up the pieces around, given the fact that the rapporteur has said that British compassion for those who are suffering has been replaced by a punitive, mean-spirited and often callous approach. Does that apply to that area of the role of universal credit? The UN special rapporteur was exceptionally strong in his end-of-visit statement. We look forward to his full report in the middle of next year. I think that Mr Allan is quite right to point to the fact that services at a local authority level and Scottish Government level are picking up the pieces of what happens within universal credit. There is no doubt in my mind that universal credit is causing anxiety, stress, increased renteriors and increased use of food banks. Therefore, many of the devolved services and local authority services are attempting to fill in the gaps and point out that there are many charitable organisations that are having to step in and fill the gaps when people are being failed by the welfare system. For example, at a local authority level, the City of Glasgow Council is spending around £2 million trying to deal with the impact of universal credit coming to the city. Now that is exceptionally concerning that local authorities are having to look at that level of funding. At a time when the DWP has taken away the universal support payments that was given to local authorities to help people and support them on their transition to universal credit. Therefore, there are a number of impacts at the Scottish Government level, at the local authority level and within the charitable sectors where there are financial impacts because other services are attempting to step up and assist people at times of crisis. I want to go back to managed migration, if that is okay. Obviously, we would all like Amber Rudd to think again and halt managed migration in relation to people on tax credits, but if she plows ahead, you mentioned in your remarks earlier that people will need to apply, many of whom have no idea that this is coming. The DWP said that it did not envisage any attrition rates. What would your response be? Is there a way of monitoring that? Are there going to be systems in place that you are aware of that either the DWP or even third sector organisations will have in place to monitor whether or not people drop out of the system because they either do not know that they should apply or feel that they do not want to be part of the benefits system? That is an area of great concern. It was a particular area in which the Scottish Government raised in our response to SAC when it was looking at the regulations and when SAC then went back to the DWP. It was an area of specific concern and it is unfortunate that DWP has continued with the policy direction of requiring people to apply for universal credit. There is simply not enough being built into that transition that will reassure me or many others that enough is being done to ensure that people do not fall through the cracks, particularly those who are perhaps the most vulnerable in our society. This is a major change for people. They have not been part of the benefits system before. They will have little understanding that this is about to come their way and yet their responsibility is being placed on that individual to ensure that they will apply for universal credit. I do not think that there is enough done by the DWP to ensure that people do not fall through the cracks. There are ways in which systems could be pre-populated, for example, with information, so that much more is being done to take that responsibility away from the individual and put it on to the system. That is not happening in due course. I stress again that this is not just the view of the Scottish Government. We put that forward in our response to SAC, but SAC specifically said that the risk should sit with the department and not with the individual. I think that that is the very least that people can expect out of such a major change to the tax credit benefit system. We have made references to the draft regulations a couple of times. One of the issues that has emerged through the evidence session is the transitional protection that will be afforded to people migrating over. In essence, their income will be protected unless there is a change of circumstances. One of the concerns that the committee has heard is that the change of circumstances could be a whole range of matters, but it also could include a woman, for example, leaving a domestic violence situation. When the DWP was here, we asked about discretion and whether we really did not get any clear answer. Is it your understanding that there will be any discretion and what is your understanding of the draft regulations in that regard? Was that something that the Scottish Government included in your response about the need for discretion in those circumstances? We would never want a situation where a woman is making a decision not to flee violence because she is worried about the impact of income on her family. That would just be an intolerable situation. There is a major concern that the transitional arrangements will not apply if there is a change of circumstances. As you quite rightly point out, a change of circumstances can happen for a myriad of different reasons. Some of them are very minor to an individual. Of course, they are obliged and required to notify of that change of circumstance. One of those is women fleeing domestic violence. I think that it would be fair to say at this point that there is not enough clarity around how transitional protection will work. That is an area of concern that we have raised with the DWP, that until we can break that down and know how it will affect individuals, and particularly the most vulnerable individuals in our society, we should not have managed migration unless there can be a reassurance that people will not fall through a gap, that a woman will not stay in an abusive relationship because they are frightened about how much money they are going to receive, we simply should not be going down this path. The Secretary of State has said that she is in listening mode. I hope that she is because there is much more clarity required, particularly around the protection of vulnerable people in our society. We may disagree between the two Governments about policy direction on universal credit, and we will continue to do so. However, I sincerely hope that Amber Rudd will look at the very specific challenges that this is going to cause on some of the most vulnerable people in our society and not in any way begin a process until she can guarantee people that they will not be worse off in this system, particularly in cases of domestic abuse. We simply cannot get into a situation where that is something that is on a woman's mind at a point of crisis. We will talk about in-work poverty. In my mind, there are two ways of lifting people out of that in-work poverty. That is through increasing their wages through things like the minimum wage, or by the state intervening to support people's incomes in a good way of doing that. As it was described when it was announced, the Governments plan for an income supplement. I wonder if you are able to set out some of the early thinking around income supplement and think about whether you have a particular target in mind for poverty reduction, think about eligibility, level of payment, the date of implementation and a budget that you think you might be setting aside for that? I am absolutely right that there are a number of ways to assist people out of poverty, and one of the areas that the Government is absolutely committed to is the income supplement. There is a great deal of preparatory work going on to ensure that we look at what an income supplement could look like and all the aspects that you mentioned there around looking at eligibility, looking at how that would be funded, looking at how we could deliver that, will be analysed and will be appraised. One of the particular aspects that we are keen to ensure that we are looking at as we look at income supplement is allowing the delivery mechanism of income supplement to ensure that we are doing that in a way that is both timely and effective, in that we do not spend so much money on the implementation of it that we are taking money away from what we would pay as the income supplement. All those aspects are being looked at. There are a number of meetings with stakeholders that are going on at that time, both at official level and at a Cabinet Secretary level. The policy lead for this at a Cabinet level obviously sits with Aileen Campbell, but the delivery may sit within my portfolio, so both myself and Ms Campbell have met a number of stakeholders to discuss their views on the income supplement. There is preparatory work on going within Government to look at the feasibility of different delivery mechanisms and to appraise different options. One of the areas that we will be keen to look at is around the number of children that the Give Me Five campaign suggested that that could be lifted out of poverty by that mechanism. That is not a mechanism that the Scottish Government supported but it is a useful starting point for us to look at within that. Those stakeholders' engagement is on-going, as they say, both from a Cabinet Secretary level and an official level, to ensure that we look at the delivery and all the various options that are available to drive that income supplement forward. That announcement was made eight months ago, so when do you think you will be looking to come back to Parliament, particularly with this committee? You would obviously have an interest with more details about the income supplement. As well, since we are talking about universal credit and the difficulties that that system presents, just what your view is on any reliance on the income supplement that you would not have on the universal credit system? We intend to ensure that we have reported back to Parliament in June on the options that are going forward. Obviously, there will be a great deal of stakeholder engagement in that. We had our debates in Parliament where we discussed the opportunity for cross-party talks on that as well. It is an area where Ms Campbell and I are very keen to work with others in the Parliament to bring forward that policy. You read a very interesting and important point about our reliance on universal credits or a reserved benefit, for example. I think that our experience has shown that it is not easy to have joint working with the DWP on many areas and that it is a very complex task. The other aspect that I am very mindful of is the cost of delivery as well. For example, when we are looking at Scottish choices, the cost to the Scottish Government to the DWP per choice is £2.50. That is a cost that the Scottish Government puts out because we believe in having the Scottish choices there, but that is money there for the Scottish Government's not using on anything else. Our reliance on reserved benefits, like universal credit, obviously makes us reliant on any changes to the universal credit system and how that may impact. It also requires us to have a joint timetable with the DWP on how quickly that could be introduced. All of that, as I say, given the example from Scottish choices, comes with the cost. I have touched on Scottish choices and, obviously, there are two already in place, automatic split payments from what we have heard from DWPs at an advanced stage. Really, if you think that the work around universal credit fixabilities on the Scottish Government side is at an end, are there any other aspects of universal credit that you would look to exercise Scottish powers to make changes? In a similar way, the Scottish choices already have been implemented? We have very limited areas in which we have any ability to impact on universal credit. The ability to have more frequent payments and the ability to pay direct to landlords are now in place. The two other aspects that are within Scottish Government powers are split payments and the bedroom tax. Unfortunately, the DWP has moved the timetable for an introduction to the mitigation of the bedroom tax at source. In the interim period, the Scottish Government will continue to mitigate from the bedroom tax through discretionary housing payments, but it is disappointing that there has been a further delay at the DWP end to how we will deal with the bedroom tax at source, had we wished to do. We are also moving forward with our policies around split payments, but it is a right of an individual, I believe, to have a payment as an individual and not as a household. The Scottish Government will be moving forward with our policy proposals on split payments this year. We will then have to work with the DWP to implement that and, again, on how much that would cost the Scottish Government within its workings with the DWP. There are two other areas that we are looking at. They are not in our gift when it comes to the timetable, but certainly the policy intent and our determination to drive those forward is absolutely there. If it is in the Scottish Government's power to do that, I am not entirely sure, but housing organisations that support the housing first model of social security payments securing some of the tenancy before anything else are advocating for use of automatic direct payments to landlord. Given the level of rent arrears that we are seeing from local authorities, whether that is something that the Government would consider pursuing so that those on universal credit have their tenancy secured at the outset. We, of course, through Scottish Choices, encourage people to take up the option to pay direct to their landlord. The choice is very important that it is an individual's benefit and that it should be an individual's choice how that will be used. I believe that it should be up to an individual about how that payment is made, whether it is direct to a landlord or not. I recognise that there are a number of concerns that landlords have around the payments that are going direct to them at the moment, because of the way that the DWP payments happen. In effect, people are in technical arrears and that is a concern, and that is something that I have spoken to the SFHA about, for example, and we have made a number of suggestions to the DWP about how those challenges for social landlords could be dealt with. The DWP could change the payment system to landlords to ensure that that technical arrear does not happen, but I go back to the point that it is an individual person's benefit and for them to decide how that money goes forward. At the moment, it automatically goes to the individual and then they have a choice to switch to direct payments. Is it possible to have the payment automatically go to the landlord but still have the claimant to have the choice to revert to the payment to them? That would still give them a choice but would it automatically go to the landlord in the first instance? You could put that policy forward but I think that it is important for the individual to have the choice and for them to decide how their payment is moved forward. The preference is for the individual to have that choice for them to then pay it direct to the landlord if that is what they wish to do rather than be an assumption and not opt out of a choice rather than opt in. You may be aware, cabinet secretary, that the committee has written to local authorities asking them what financial provisions have been made in response to the roll-out of universal credit. Many of them have mentioned the Scottish welfare fund and that also comes up in submissions from other organisations. It would not be unexpected that, with roll-out of universal credit, there will be more demand on the Scottish welfare fund. I appreciate wholeheartedly that that fund and other payments and services such as discretionary housing payments are not and should not be used simply to mitigate cuts that have come directly from another Government's policies. They are there to stop people falling into people who are struggling in really difficult circumstances, both working and out of work. I would be interested to learn what the Scottish Government is doing to assist local authorities to deal with any rising demand for support. It is quite right to say that local authorities are facing the challenge of trying to prepare people for the forthcoming roll-out of universal credit in a managed migration sense. Of course, we have had a number of our largest cities moving forward with universal credit in the past few months. When you look at the Scottish welfare fund, for example, I am aware that a large proportion of those who are coming forward for Scottish welfare fund payments are doing so because of a delay in a benefit being paid or, indeed, the incorrect amount of benefit being paid, and that is putting people into crisis. When you look at why the Scottish welfare fund was set up, it was there for people in times of crisis. It is, unfortunately, turning more and more into something that people are using because of a failure in another part of the benefit system. I know that a large portion of individuals who are now coming forward to the Scottish welfare fund because of the impact of universal credit as it moves forward are disappointing. As I mentioned earlier, we have had cuts to universal support, for example, provided directly to local authorities from the DWP recently. However, the area around how local authorities are being affected—whether it is the Scottish welfare fund or others—was an area that I met with COSLA recently to discuss. Councillor Whitman and I agreed jointly that we would ensure that we have close communication from Scottish Government officials and local authorities about the impact that it is having on local authorities so that we have an absolute awareness of that. Local authorities are at different stages with that because they have had universal credit for differing amounts of time across the country. However, we are very keen to work with COSLA to shine a light on the added burden that universal credit is bringing to local authorities. The DWP assured local authorities that they would provide additional funding for the administrative burden that universal credit would bring. It would be fair to say that not much has come from that promise and it is something that I am very keen to work with local authorities on. Will the Government continue to monitor that situation with regard to funding for the Scottish welfare fund and DHPs just to ensure that local authorities are able to meet any demand that arises? It is certainly something that we have to keep a close eye on. When it comes to, for example, the Scottish welfare fund, the allocation between local authorities is a joint agreement that we have with COSLA about how that is allocated amongst the local authorities based on SIMD figures, and that is a jointly agreed formula. The aspects around the Scottish welfare fund, the discretion of housing payments are, of course, a matter that is for the determination of the Scottish budget as we move through our annual process. A common suggestion in written submissions was to ask for more funding for advice services. I know where the financial health check has just been launched this month. In citizens advice, we will have responsibility for that. CPag citizens advice, NHS Airshire and Arran, menu for change—many organisations have in their submissions pointed out that ensuring that people have access to information and advice to enable them to maximise their incomes and to make sure that they know what they are entitled to and where to get it is key. I would like to understand what efforts are being taken to ensure that people have an opportunity to maximise their income, because we know that some of the figures about the amount of unclaimed benefits are quite staggering and could make a real difference to people. Absolutely. The committee and Alison Johnstone will be aware of the responsibility that the Scottish Government has to, for example, increase the level of take-up for benefits under the Social Security Act. One of the reasons for that is because the fact that so much goes unclaimed and that it is imperative that we look very seriously at income maximisation. I absolutely agree at a constituency level and ministerial level the importance of having a well-funded advice service. I am sure that other members do the impact that that can have on people. We have, of course, increased our welfare advice services budget from £3.1 million in 2017-18 to £3.6 million in 2018-19 to enable us to improve our support for advice in recognition of the very important role that that plays. The financial health check that was recently launched by Eileen Campbell is another important aspect within our commitment to ensure that people have the information that they require to get that benefit take up, that they are entitled to and, obviously, to deal with the poverty premium that many people, unfortunately, face. We have undertaken, also, within Government a review of the advice services because there are many different parts of Government that fund different advice services. Some come through Ms Campbell's portfolio, but not all. We need to ensure that we are not duplicating anything and actually causing more work to the advice services in terms of budding for different pots and different parts of Government. Therefore, we are making it more difficult for us to support them. That works on-going to ensure that we are funding them in an effective way and not in effect. Jumping through hoops to try to get different funding pots from different parts of Government to do the joint part of what we all want to do, which is to have income maximisation. Good morning, Cabinet Secretary. Many of the written submissions that we had came with suggestions for the Scottish Social Security System and how it could mitigate against the universal credits. It almost feels as if it is a case of Westminster Tory Government can I break it and you have to fix it every time. Even to the UN special rapporteurs interned finance last week, where he said, through it all, one actor has stubbornly resisted seeing the situation for what it is. The UK Government has remained determinedly in a state of denial that, even while devolved authorities in Scotland and Northern Ireland are frantically trying to devise ways to mitigate or, in other words, counteract at least the worst features of the Government's benefits policy. Even Alison Johnstone said in a recent debate, and I agree with her that she did not come here to this Parliament to mitigate against another Government's policy. My question after all is, when do you stop cleaning up after the Westminster Tory Government? It is undoubtedly a challenge that the Scottish Government has. I mentioned in my opening remarks about the sheer scale of the cuts—£3.7 billion—and the comparison to put that into perspective about being three times the annual police budget in Scotland. At that level of expenditure—and I have read a great deal of the written evidence that the committee has had around suggestions of the Scottish Government to take action. I fully appreciate and understand where they are coming from. I looked at that long list of suggestions for the Scottish Government to, in effect, pick up the pieces from Westminster. Again, I was concerned about the ability for the Scottish Government to be able to fund all those. In saying that, however, we will not stand by and do nothing while people are unable to feed their families or themselves because of what is happening down there. We will not stand by and allow that to happen. I simply make the point that we cannot pick up the piece of every welfare cut that is happening at Westminster. I mentioned in my opening statement that £125 million that we spend on mitigation measures is broken down by the Scottish Welfare Fund, discretionary housing payments and the Farer Scotland fund. That does not include what goes on across the rest of Government to support those on low incomes. I mentioned some of that in my opening remarks around school clothing grants, sanitary products, but I could also mention the educational maintenance allowance, the £96 million overall to support fair start Scotland, the workplace equality fund, council tax reduction—I could go on. There is a number of lists within other ministerial portfolios that support those that are on low incomes, but the committee and others will be well aware of the challenges at this time when we are starting to look at Scottish Government budgets about everything that we are having to do to mitigate the worst excesses of Westminster policy decisions. The UN rapporteur was very specific in saying that those were policy choices and they were not by accident. They did not happen because of austerity, which means that that is a budgetary challenge that we have to take on board within the Scottish Government, and that sits very heavily within my portfolio. However, as I suggest by the number of other projects that are going on across Government, it sits very heavily on the deaths of my colleague cabinet secretaries. Those are extremely strong words from the UN rapporteur on that. Surely, even now, when we are looking at it—I am going off on a tangent to a certain degree, but surely when we are looking at it here, it is almost as if, even the UN are saying that we should be looking at whether the Scottish Government has got to make those decisions. Surely, if we had the full powers of social security, we could actually make a better chance of it than what we are currently getting through the Westminster Government. I go back to the point that those are policy choices that are being made by the DWP and the UK Government. It is nothing to do with austerity that we sanction people within the UK welfare system, and it is nothing to do with austerity that we have a two-child cap policy. Those are policy decisions that have been taken. When we look at the devolution of the limited amount of social security payments that we will have in the UK, around 15 per cent, people will begin to see that it can be different. When you look at the dignity, fairness and respect that we will deliver through the benefits that will be devolved, there will be a demonstrable comparison between two systems within the UK, one delivered on dignity, fairness and respect, and the other one, which is not my word, but the words of the people that I speak to when I go out and visit is inhumane. I think that that will be a very stark comparison for people to draw their own conclusions from in due course. You mentioned sanctions there, cabinet secretary. I suppose we will circle a little bit, because I am just going to ask a little bit about our original line of questioning before we move on, because it made me think about sanctions. I think that Alice Rahl had explored the point about, in work conditionality, which we would probably call sanctions, rather than making work pay and making work puritive. I think that Alice Rahl had explored the line of questioning, which was in terms of work progression and in terms of career progression. The Scottish Government has got a role to play in terms of the further higher education sector for training people in relation to apprenticeships, in relation to childcare, even in relation to transport links in local communities, and I would better understand local jobs markets. There is a huge overlap between tiers of Scottish Government, UK Government and local authorities. I have been asking about how you could work closer together in relation to supporting work progression. You indicated that you would be prepared to do that, but when sanctions came up to work on a more formal basis in relation to work progression vis-à-vis universal credit system, would the UK Government have to lift the threat of sanctions to those in work that are universal credit? If they did not lift that threat, could it do reputational damage to local authorities and to the Scottish Government if they got so close to the DWP to be working hand in glove with them to support work progression? However, at the end of that, there could be a sanction. It is important that we see it from the perspective of the individual who is going through this process. I would stress the key role that the support worker has, for example, around Fair Start Scotland, where there is a person that an individual going through that process can go to for advice and reassurance about what is going on. All of that counts for nothing if a person in another part of the system is concerned about a sanction. However, it is important that the work that we are doing supports people. I give the example of Fair Start Scotland about what that is all about. When we are looking at the people who are in work conditionality, they are in work and may face sanctions. It is very difficult for them to feel—in fact, how would I say—impossible for them to feel supported during that process. People are being sanctioned to try to get more hours or a better-paid job that might not exist in their local labour market. It is not really the responsibility of that individual to work out who is to blame for that. It is the responsibility, as much as we can, in local authority and in Scottish Government, to ensure that they know about the services that are out there. However, it is a challenge for people to work through a system that is very complex. I will ask a brief follow-up to that. I would not push it much more. My thought was that I would have said that Glasgow, Mary Helen and Springburn will be—well, not Mary Helen and the Job Centre is closing in Springburn—there will be work coaches there who, maybe in a few years' time, are having to have conversations with the part-time workers about increasing their hours or increasing their rates of pay. There will be a skill shop, there is a college there, there is a variety of supports that are of a devolved fashion. The more formal those relationships are with Job Centre Plus, the more there could be, dare I say it, a contamination of the positive relationship that local authorities and the Scottish Government are trying to build if they work so closely with Job Centre Plus for a system that could ultimately have a sanction at the end of it? Is there any localised formal arrangements with Job Centre Plus in relation to supporting those in work and in universal credit? Would they have to lift the threat of sanctions over those individuals before you could have those formalised local relationships? I suppose that it would depend on the type of formalised local relationships that are in place. At all points, we would encourage a user-centred approach that is looking at it, as I said at the beginning of your remarks, from the individual's perspective. However, I would encourage DWP to take part in partnerships or groups in their communities, because they cannot be seen to be sitting separate to what goes on, because there is an inability for charities, for colleges, for example, to know who exactly to pick up the phone to within DWP to be able to sort out a very localised problem. The DWP cannot sit and should never sit separate to what is going on within their communities. They need to have a recognition of what is happening there. That is certainly the aspect that we are building into the local delivery of Social Security Scotland, where the local delivery will be seen as part of the community and work with the partners that are already there, rather than sitting separate to that. Unless we have those local relationships, we can never expect people to have a true understanding about the impact of the decisions that they are making, either within a job centre or within our local delivery service. I wanted to ask you about passported benefits. You know that there is a qualifying criteria for many passport benefits, including the receipt of universal credit, with income below a certain threshold, so there are a lot of different issues arising from that. The one that I wanted to ask you about was the eligibility for free school meals. Can I begin by saying that I have done a bit of work on this over the last couple of years and it has taken me a long time to actually understand how we arrive at the current threshold and who qualifies as very complex arithmetic, being on tax credits and working tax credits and being below a certain earnings threshold. In some ways, it is a simpler to understand, so in relation to the earnings limit and application for those on universal credit in relation to free school meals, the figure is £610 in the monthly assessment period, immediately prior to the application for free school meals. I can just read out a bit from Spice. A few families on working tax credit would have earnings low enough to benefit from those rates. For example, in 2019-20, the national living wage for people over 25 will be £821, so someone would need to be working fewer than 18 hours a week at the rate of £8.21 in order to fall within the £610 a month threshold for a free school meal. I have no idea how that compares to the current arrangements, and I would not expect you to have that answer at the top of your head. However, I wondered if you planned to put any thought into what would be within your gift in terms of the powers of this Parliament to change that threshold and how you see that earnings limit application impacting on families that need to rely on free school meals. As the deputy convener rightly points out, the rules around passport benefit are complicated, and it is a policy area that sits within many different ministerial portfolios. The specific one that she mentioned sits within education, rather than specifically around social security. As such, the criteria for the benefits sits within different ministerial portfolios. When we are looking at the eligibility of that, there is an awareness across government that the move to universal credit is creating a challenge for passported benefits. As the committee well knows, there are challenges, for example, around the fact that you see fluctuates from month to month, and that creates difficulties for individuals when we are looking at that. Within the different ministerial portfolios, we are actively considering the impact of universal credit. The decisions that will come from that will sit with the different ministers that are involved with that. As I said, the free school meals sits for the cabinet secretary for education, but the challenges that universal credit is playing out for individuals is something that we are live to across government. Can I just follow up? It is another minister's responsibility, but is it right to say that it would be within the gift of the Scottish Government to change the threshold for free school meals if it chose to do that? The eligibility for free school meals is set within regulations that are devolved. It would be up to the cabinet secretary responsible for that area, in this case, for education to look at that. I would stress that across Government we are aware of the challenges, particularly our universal credit and the impact that that will have. If it was possible to consider getting back to the committee, or perhaps we might choose to write to the cabinet secretary for education, one of the things that I am interested in is whether that £610 is a lower threshold than the one that we are already operating. I suspect that it probably is a bit lower, and I would be helpful to know the answer to that. My understanding is that it replicates the status quo, so it is not a lowering of that. However, again, if the committee requires further information than I have at hand today, it would be happy to provide that and write it in due course. I think that that would be really helpful. As Deputy Secretary was asking the question, I had the benefit of going online to get some of the information in relation to current eligibility criteria within the tax credit system, which is not in the gift of yourself as you are sitting answering the question, but even just reading some of the information from that. If you have council tax credit and working tax credit paid at the maximum rate with household income for tax credits purposes under £6,420, with the effect from April 2010 that it goes on to say some other information as well, I don't know. One of the calls that we got in evidence was irrespective of what the passported benefits regime is. There isn't a certain contrast between what it was before universal credit and what it is now with fluctuating earnings, for example, meaning that it does recreate cliff edges for passported benefit entitlement, but having all the information for all passported benefits reliable and in the one place and easy to understand language was some of the calls that we've had. That's maybe something that would be helpful as well, cabinet secretary. I certainly do take on board and I agreed with the deputy convener that it's a complex issue. It's made even more complex just now because of the moves around universal credit, but it is something that we are giving active consideration to across government. I would give an example from my own portfolio about what we are doing around best start grants, for example, where we recognise that fluctuating income and therefore look at the universal credit awards in the month of application or the month before to ensure that if either of those are above a zero rating, then assistance can be given. There has to be a recognition and an understanding of that. That's why, for example, around best start grant, we've looked to deal with that fluctuation in income and the challenges that that presents to people. Before I move on, Michelle Ballantyne, I'm just wondering, you've got an opportunity to ask anything. If another member wishes to ask a question, just now there's one question, I think that we really do need to ask because one of the large determinants of inward poverty are rates of pay. That means that we have to look at the minimum wage and we have to look at the living wage and we have to look at the uptake of the living wage and we have to look at that on-going debate and discussion over whether the current minimum wage should actually be the current living wage and it should be statutory enforceable across the board, whether that power sits in Scotland or the UK, that it should just happen. That's a pretty well established view with many, many anti-poverty groups who are concerned about inward poverty. Can I ask the cabinet secretary in your capacity as a cabinet secretary for social security and older people whether you've made representations of that nature to your counterparts at Westminster and what you're doing to promote the living wage in Scotland? It would be something for another minister rather than myself, but it is an area where we have repeatedly raised our concerns, for example, around the fact that we have different aged individuals in our country receiving different minimum wages and the fact that, if you're doing a job, you should get the same pay regardless of what your age is, so the fact that we have different minimum wages for people depending on their age is a great concern. Obviously, as you rightly pointed out, the living wage is something that the Scottish Government is keen to promote. I would suggest that we are leading the way on fair pay, and we have the best performance of all the four UK countries in terms of paying the real living wage. I would like to see the minimum wage being increased to the level of the living wage. Finally, we've got a note in our briefing in relation to council tax reduction, and a person's universal credit calculation is used to calculate entitlement to council tax reduction. I understand that there are some flexibilities with Scottish local authorities being able to project income over a year, despite the fact that there are fluctuations in universal credit. If you are aware of any issues in relation to universal credit and the current council tax reduction scheme, which is obviously the management of that, that is devolved. If there are any concerns in relation to that, you have had or intend to have any discussions with either local authorities or the UK Government. That is an area that sits in the portfolio of Mr Macabre. I am aware that the work that would happen to review the council tax reduction scheme is rather being hindered by some of the uncertainty around the DWP's plans to migrate those in legacy benefits. That is particularly because of the aspect that I mentioned in a previous answer about the lack of detail around transitional protection arrangements, because that will clearly have an impact on how council tax reduction schemes would work in practice. It is a concern that that level of detail is not available to officials within the Scottish Government, because it makes it very difficult to work out what the implications of the council tax reduction scheme would be, because we do not know how the transitional arrangements will work with universal credit. It is an area that we are stressing that we require further detail on to allow us to fully fulfil our obligations to have an effective council tax reduction scheme in place within our devolved powers. All that remains—I do not see any other bids for questions from members—is to thank the officials for their attendance this morning. I should have put on the record that we had hoped this morning's witness session would include yourself and your UK counterpart. Who would have been up until a few days ago, Esther McVey, but miss McVey had not got back to accept her otherwise an invite of her during your minister. Had accepted an invite, that will not now happen to the new year, but we had hoped that we would have been able to have both Scottish and UK Government representatives here this morning. I think that it is only fair to put that on the record. Thank you, cabinet secretary, to you and your officials. We now move to agenda item 3, which is a decision to take item in private. The committee has asked to agree that the following items for consideration at its next meeting are taken in private, and they are. I will read through all three of them. Consideration of a draft letter to the cabinet secretary for social security and older people on the young carer grant. Consideration of an issues paper for the social security and work poverty inquiry, and a work programme discussion, as the committee agreed. We now move to agenda item 4, which has previously been agreed to in private.