 Welcome to the 11th meeting of the Social Justice and Social Security Committee. Our first item of business today is a decision to take item 5 in private. Are we all agreed? Agreed, thank you very much. Our agenda item number 2 is looking at the medium-term financial strategy and framework for resource spending. We have our consideration of the two financial planning documents, the medium-term financial strategy and the resource spending review framework. I welcome to the meeting Emma Congrave, who is from the Knowledge Executive Exchange Fellowship of the Fraser Valander Institute and David Phillips, associate director of the Institute for Fiscal Studies. Thank you very much for joining us this morning, both of you are joining us remotely. Members do have a lot of interest in these two areas and a lot of questions, so I am going to move directly to two questions. On theme 1, we have roundabout the risk to the budget from social security. I am going to bring in my colleague Natalie Donne first, who joins us remotely, and then we will go to Miles Burgs, who is in the room. Natalie, please. Thanks very much, convener. Good morning to the panel. My first question is, can you advise what extent the demand led nature of social security represents as a risk to the Scottish budget as a whole, please? Sorry, I should take that question to Emma first, thank you. Of course. Good morning. There are different risks that come with social security forecasting. One of the issues that I found while reading through both of the documents was an understanding of whether there was a good understanding communicated over those different risks and where they stem from. In terms of demand, demand changes, because most of the social security measures that exist in the Scottish budget relate to what we usually term as additional cost benefits for people with disabilities or caring responsibilities. They tend to be quite stable over time. They tend to shift with demographic changes, which are relatively easy to predict going forward. They do not tend to pose a huge risk if all else is held equal. Of course, if eligibility is changed, caseload will change and demand changes in that way, but that is not within the control of the Scottish Government, I suppose. Whereas you think about factors outwith the control of the Scottish Government, changes in the characteristics of the population and their caseload changes as a result are more important. However, the bulk of social security measures in Scotland are on measures that tend to be fairly stable. The exception being the Scottish child payment, which is a relatively small chunk of social security spending, if you look at it as a whole. That will depend on people's incomes and can fluctuate with the economic cycle and, therefore, caseload can change quite short notice, as we have experienced over the past few years. That is a factor that is much less within the control of the Scottish Government, but that is just one part of the overall basket of social security. On the whole, the demand fluctuations are not as much of a risk for Scotland as they are, potentially, for the UK, where they have more of the means-tested benefits under their control. Thank you. Thank you. I think that David Wharton wants to come in as well, Natalie. Thank you. I would agree very much with what Emma Wharton was saying when we reached a steady state with the new Scottish social security benefits. Because those are linked to health conditions in the main, those things tend to be more stable and linked to demographics and, over time, somewhat changes in expectations about what the benefits system can offer and what counts as a disability, but those things have changed over time. I think that there is potentially a significant risk at this point in time as the benefits are rolled out. That is because there is an uncertainty about how the benefits are going to be implemented in practice, given the changes to the process for how eligibility is assessed, the changes in culture at Scottish social security, compared to DWP. For example, we saw when the rolling-out pip in the UK as a whole, there were expectations that would lead to a significant reduction in spending. In fact, that did not take place and spending was progressively revised up. I think that the Scottish Physical Commission has built in an expectation that the system will lead to more people claiming, more people being successful in their claims and a higher-average claim amount, but there is a lot of uncertainty around that. We will come on to that in a bit, but the documents set out some scenarios around lower and upper scenarios. The lower might be unrealistic, given that they are almost certainly going to push up demand and cost relative to the UK system, because more people will be delegable, but that can give us a sense that there is some risk in the initial phase. Once we reach the steady state, there is less risk, very much for the reasons that Emma was saying. You touched on it. Obviously, the Scottish Government is encouraging the take-up of benefits, so I think that that leads to an increased potential risk. I know that you have said that it is more an issue in the short term. How do you feel that those risks might be managed? Do you think that the UK Government could do more to alleviate any potential risk by ensuring that our funding will not reduce, regardless of any policy decisions that are taken by Westminster? I will go back to David, sorry, and then I will come to Emma after. I think that the short answer to that is no, I do not think that that would be appropriate. The reason is that UK-wide benefits are funded through UK-wide taxes. For example, if a decision is taken in Westminster to reduce the generosity of a UK-wide benefit, that is less tax revenue being used to fund benefits in Wales, England and Northern Ireland. The impact of that on Scotland, you might say that is unfair. Why are we getting less spend on benefits ourselves? It is because either less is being spent in total on England, Scotland and Northern Ireland from UK-wide taxes and Scotland has to, if you like, for reasons of fairness share in that reduction in spending or spending can be reallocated to other areas in which Scotland will benefit. For example, health spending with Scotland gets a share by the Barnett formula or reserve benefits with Scotland gets a share. If there are changes in benefit policy in the rest of the UK, the way our funding system works, where that money comes from a pooled pot, Scotland has to make a contribution to that as well. I think that what this is showing, though, is that under the current system there is limited flexibility for Scotland to respond to those sorts of changes. Scotland does have devolved tax powers and it is a reasonable suggestion to say that, if Scotland wants to spend more on a certain area and not cut elsewhere, taxation is a natural area to look at. We have seen the Scottish Government make use of those tax powers, but in the short term it is difficult to make changes in the short term. The UK Government has not got to do that if costs change, if funding ability changes, it can borrow in the short term to cover that. We have identified a need for higher forecast errors, which can happen not just because of changes in policy in the rest of the UK, but because of the difficulty in forecasting the cost of Scottish benefits. Currently, there are quite strong constraints on how much Scotland can borrow even to reduce forecast errors. I think that, as a case I say, those limits should be substantially increased, potentially even abolished because the forecast error itself is a limit on how much you can borrow. Also, in the short to medium term, discretionary borrowing, perhaps with a limit on this, so that the Scottish Government can borrow, even if it is not a forecast error, to address in the short term smooth the impacts of those sorts of changes. That might not be the answer that we are looking for exactly, but I guess what I am saying is that it needs to be shaving across the UK. It needs to be a system that is fair across the whole of the UK, but it also needs to be a system to give flexibility to the Scottish Government to respond over time by prioritising spending, raising taxes or changing welfare, not having to respond immediately as the block grant changes. Thanks, David. No, it is very informative, not specifically looking for an answer, but just looking for the facts. Thank you, David. Emma, sorry, I am not sure if you have anything to add. Just very briefly, I agree with much of what David has said there, with potentially the focus on Westminster changes to help Scotland manage it, probably best focused on issues around the fiscal framework and borrowing, rather than in terms of the being, you know, other guards put in to safeguard Scotland if spending changes for the rest of the UK. Particularly where we have a division of devolved benefits on disability and carers now, I think that they need to operate within that devolved space as many other policies do. I think that there is a bit of a grey area between them as we are using real benefits as passports for top-up benefits in Scotland, I think that sometimes there. I am not sure if we will see this, but say, you know, the systems for eligibility for universal credit were eased and more people came into the system, then that would have a knock-on effect on benefits in Scotland, a Scottish trial payment anyway. So I think that there is a conversation to be thought about there, but, in principle, I think that the borrowing area is the right place to think about in terms of helping Scotland to manage risks around social security. Thanks very much for that, Natalie. I will hand over it to Males Briggs, and then after that, Pam Duncan-Gladzith, Males. Thank you. Thank you, convener. Good morning to the panel. Thank you for joining us. I wanted to further develop some of the points that my colleague, Natalie Donne, had pursued there, because I wanted to ask specifically when Dame Susan Rice from the Scottish Fiscal Commission had come to committee. You know, she outlined in quite stark terms the fact that the gap is set to reach three quarters of a billion pounds by 2024-25. So, you know, this is very much on the horizon now for budgeting. So I just wondered to follow on that line of questioning where the financial management is actually within the Scottish Government around that, where are you seeing that future projection being costed into proposals? We obviously each budget year are voting on that and seeing increasing levels going towards social security, but that is a huge amount of money. And as Dame Rice says, that money must be found from elsewhere in the Scottish budget. So what work is going on, which you are aware of, of how that will be financially managed in the future? I'm going to put that to Emma, and then David, if you want to come in. Okay, thank you. Yes. We would expect there to be divergences in policy and spend with a, you know, that's kind of what Devolution is about. It's that ability to make different choices on spend. And hence, we are seeing that with social security, particularly as David mentioned earlier, partly related to a different approach to applications and a different culture that's trying to be brought in, which is expected to lead to increasing spend, but also there have been policy changes, which also are part of the reason why spending is expected to be higher. So in terms of how that will be managed, I mean, it's a similar principle to how any, you know, additional spend is managed within the budget and the spending review process. It's really key here, because that's where we would expect to see how different areas of spend are being prioritised and where reductions are being made in order to spend more on things like social security, where commitments have already been made to increase spend. The really important thing, which we are seeing, is that there's this modelling, which is telling us, you know, from the Scottish Fiscal Commission, what these protected areas of spend are going to be. And I would expect within the Scottish Government they are also, you know, doing their shadow forecasting so that when they do, they are thinking about any future changes they are able to cost that in as well, you know, whilst they're kind of making their plans. So I would expect, and of course the Scottish Fiscal Commission has said that they will do some forecast for the spending review as well. So this will just, will be all part of that process internally. I mean, when we're thinking about how the framework document has been set out and how some of the priorities there have been kind of talked about, clearly there are quite a number of priorities that the Government are putting forward. You know, hard to agree on child poverty, climate change and the economy has been very, very important. But we've done all of that if you are prioritising areas of spend and when overall there is understood to be a short fall between funding and spending for the, you know, spending review period as a whole, there will have to be decisions made on where to reduce spend or to increase it at less than in real terms. So, I mean, very much expecting that the spending review will answer those questions. I mean, it really must. And so that got that understanding over the medium term as to, you know, what the trade-offs actually are in spending more on one area, you will have to spend less on another or taxation will need to increase. So, yeah, so that's my understanding of what will be happening at the moment in terms of thinking those things through. Thank you for that. And David, before I bring you in, I'll maybe expand the question a little bit. From your experience, which budgets are therefore likely to be targeted? You know, we've seen a budget which has cut £120 million from local government. Is the NHS budgets, for example, which have increased in both inflation every year of this Parliament, being established to be able to look towards that budget? And where do you think ministers particularly will look to find this money? Thank you. On the kind of first question that you answered, and I'll come on to the second part in a second, on the first part, again I would agree with Emma, I expect the spending of you to set out the kind of choices that the Scottish Government is making on how to prioritise its spending. It will be a difficult spending of you, you know, based on, not only the kind of underlying pressures, you know, due to, you know, demands and costs for existing public services back, but, you know, there's a few things that are coming down the line. There's the welfare spending measures, the social security spending measures, which you say add up to about £3.25 billion by the end of the period. There's the, sort of, relative underperformance of Scottish income tax revenue being down on the revenue side and some, sort of, negative reconciliation is coming down the way, so it will be a difficult spending of you period, as Emma was saying there. I would perhaps say that, you know, one would hope that when these policies were initially being formulated, that even though there wasn't a spending review at that point, some assessment of what the likely funding environment would be like down the line was being made and a decision about the potential knock-on effects given that environment for other parts of the budget was considered at that point. Now, it's not clear to me whether that was the case or not, but I certainly think that it's something that the Scottish Government should be asked about and what planning was done around that when these promises and these plans are really being put in place. You can't just say, well, we're going to have a spending review later down the line once these things are already in place, already in the system, because then the only option is to cut back at the areas or go back on your promises. I think even if you don't do the full review, there should still be some analysis at that earlier stage, so that could be a potential area to ask the Scottish Government about. On your second question about which areas to cut, I think that the challenges here are that commitments have been made not just on social security but other areas, for example. Underlying the spending review framework and the medium-term financial strategy is an assumption, for example, that health spending was up three and a half per cent a year. That is substantially less than we required to meet the Scottish Government's commitment to pass on and full the NHS consequentials coming as a result of decisions in Westminster. That makes it difficult to actually cut spending on NHS compared to what's in the fallout. Actually, you want to spend more to meet your pledges on health spending than what's in those current forecasts. There are obviously concerns about education standards in Scotland at the moment, and that might make it difficult to cut back on school spending. With health and schools taking out the picture, you're left with a fairly small pot to cut back, and that could then mean some of the areas that have seen big cuts already over the years—local government, housing, transport, the environment, culture, policing and so on—just those areas see further cuts. One has to go back on one's pledges on health or social security, or look to taxation and new pieces of taxation to make up some of the gap. Thank you for the information that you gave us in advance. It was really helpful, and thank you for your answer so far. I have a couple of questions about risk and demand within the social security system. I guess that my first one is probably for Emma, if that's okay, and it's about the point that the Unote, the Scottish Government, has policy to increase uptake in benefits. Is it clear from the framework and other documents how that is being considered, both in terms of how they would do it, the costs of it and the implications? From the documents that are being reviewed as part of the spending review that came out in December, no, it's not particularly apparent how specifically some of those areas will be developed. I suppose that we wouldn't necessarily expect that kind of detail consideration to be in the types of high-level documents that came out at that time. We would expect them to be part of big policy frameworks such as the child poverty delivery plan and, indeed, any frameworks that are produced in terms of take-up. What we would expect to see in the spending review is the inclusion of any particular costs associated with that. If there are no costs associated with that, I suppose that opens up a question as well. Certainly, if that is a specific policy and there are cost implications of that, we would expect that to be part of detailed financial information, but not necessarily, as I would say, as part of the documents that we are talking about today. Thank you. That is actually helpful. The Government has indicated that it will review some of the eligibility criteria around the 20-metre rule this year, or that it will begin that review. When would you expect to see some of the detail in terms of the costings for that? When should we be looking to see what timescale should we be looking to see? I am conscious of the answer that David Scott gave when he expected to see financial decisions as well as policy decisions, so it would be good to know what you think about that. I mentioned earlier that the Scottish Government will be doing its own internal financial costings on that when those decisions are being considered. In terms of when that information is in the public domain, that is now very much under the jurisdiction of the Scottish Fiscal Commission. They will be the ones. Once a policy is confirmed, they will be looking for evidence that they can use to produce a robust costing of that. That might be revised over time as better estimates come into being, but that is where we would be looking. It is where we now are expected to look for that information in terms of the cost of policies. It is an interesting question as to what extent the Scottish Fiscal Commission would expect to be considering those things as they are making those decisions, but there is not an expectation that that information will be made public because that is the role of the Scottish Fiscal Commission. It is an interesting area and it would be interesting to ask the Scottish Government about the planning and the work that it goes through. Even if they have to revise their figures as a result of the Scottish Fiscal Commission, as has happened with things such as the Scottish child payment in the past, I hope that that helps them in terms of that. Thank you. I am just getting at whether, if there is a review and if they are serious about changing it, I would like to know whether the money was there or where they were going to get the money in the house when we should expect detail on that, so that is helpful. The cabinet secretary said that she wants to make intelligent decisions on social security. Could you set out how that could be done and whether or not the Government have the data to do that? What the timescales involved in intelligent decision making on social security should be kinder related to the point that we have just spoke about? I can start and then pass to David. So far in terms of decisions being made on social security, it has taken a lot of time to decide what changes to be made. Clearly, these are areas that affect a lot of people quite substantially. Therefore, we have seen a lot in terms of consultation and talking with the panels in terms of understanding the issues with the system as it was before and what could improve that in the future. In terms of data that will always be difficult, for any policy that is increasing eligibility, I would say that this is particularly the case in terms of some areas around ill health and disability. I do not think that Scotland—this is based on work that I have done on the social care system—does not have a very good grasp on levels of unmet need. Therefore, it is quite hard to know how many people would come under a policy if eligibility was increased. Indeed, for the given national care service, if eligibility was increased for access to services, data is an issue in terms of being able to understand that impact. If you do not have that, it is quite difficult to estimate costs in the future. We see a lot of reference back to the UK system. Hence, in the MTFS, they use the forecast error between OBR and forecast and then outtone to determine the extent of divergence in the figures over time. Is that applicable to the situation in Scotland? Maybe not, but it is difficult to know where else you go to find that kind of intelligent information. There is a lot of uncertainty here, but it is unavoidable to a large extent. I do not know if that should guard against making changes or if changes should be more cautious over time. Small incremental changes to get to the end goal have a bit more financial certainty about what is happening, but I am not sure that that would be acceptable necessarily to the wider public order, to those who are potentially in scope for increased benefits over time. It is a very interesting question. I would agree with lots of what Emma was saying. Over time, as there is more information about the impacts of the changes that have been made so far and the ability of the Scottish Fiscal Commission to forecast those, that should reduce but not eliminate uncertainty. Emma was saying that there is a bit of a trade-off in the short to medium term about the extent to which one goes slower in order to avoid adding further to the uncertainty and the potential of a major forecast error that would potentially cause a hole in the Scottish Government's budget and wanting to move quickly to address legitimate policy concerns that people have with the current systems. I would also add that there are differences for different types of policy measures. For example, estimating the cost of changes to changes in benefit rates is much more straightforward than estimating the cost of changes to the eligibility criteria and the assessment process. When looking at things like means-tested benefits such as the Scottish child payment, again, data on things like income is generally a lot better than data on things like health, which is more subjective. The main risk for things like Scottish child payment is not so much modelling eligibility for these benefits. It would be cyclicality, how those things go up and down in recessions and booms, but also what will the take-up rate be and how does the take-up rate particularly vary as you change the generosity of benefits. We know from existing research that the higher the benefit is because it makes more rational sense to invest the time and effort in claiming a benefit that is worth more. There are different risks and different challenges for different policies. Once a system is in place that we think or that the Scottish Government and people think that is largely appropriate in the way that it is working, there are subsequent changes that tend to be things about benefit rates. Those are things that can be forecast a lot more straightforwardly and planned a lot more easily. I would again come back to my point that we might come on to this a bit later. I do think that in some respects, these two documents talk a little bit too much about the fiscal framework review and not enough about policies in Scotland with the current fiscal powers, but I think that the fiscal framework is an important constraint here as well. If you had greater ability to borrow to address forecast errors, you would be a bit more relaxed about there being forecast errors and being able to make policies that you might get the cost wrong. Without those forecast, with constrained borrowing powers, you need to think more about the potential forecast errors. If they arise and exceed the borrowing limits, you need to draw down reserves or cut back other spending or raise taxes to address them, which is harder to do. That is really helpful. Can I ask one more follow-up, convener? If it is very short, we can have short answers. Thank you. That is really helpful. It is noted that there is not much information about how the social security system can address demand, and in the context that you have just set out, prevention and the way it interacts with other services seems to be quite important. Can you briefly set out why it is important what the implications are and what you would expect to see? Probably both, but I will not need a question later if that helps for time. I am happy to start on that. I think that that is a really interesting question, because prevention is mentioned quite a few times, particularly in the framework, but there is not too much made of what the potential implications of that are. Social security is part of a bigger system in terms of public services. Increasing support in one area may therefore have a reduction in others, potentially over quite a short time period, and I am particularly thinking about the interactions between the social care system and particularly carers allowance. I think that there are some potential implications that I would hope would be picked up and looked at more in a spending review, rather than just prevention being mentioned. It needs to be analysed. David, do you have anything to add to that? Yes. I would add one further point. I agree with what Emma was saying, that the point that I would add as well is that what I would hope departments do not just rely on is that the sort of preventative services, the justification for them is that you save money down the line. That is part of the justification for investing in earlier intervention and preventative services, but actually when the search looks at a lot of preventative services, so for example, say the impact of investment on social care or children's social services on subsequent costs for health care, what the evidence suggests is that there was a reduction in the cost of health care from the increase in spending on children's social services or adult social services, but it is not enough to offset the extra spending. That does not mean that extra spending on children's social services and adult social services was not good value for money or was a bad idea because you are not just paying to reduce spending elsewhere, you are paying to the outcomes and the improvements in quality of life and other things that come from that spending. I have said this to MHCLG, or what it is called now, DELUK, in Westminster, when making a case to the Treasury, the value for money and the cost savings can be part of it, but it really needs to be about the broader benefits and value of these spending items. Otherwise, the Treasury men or the Scottish Treasury women and women, with their hard-nosed abusers, will see through that and say, we do not think that this will save us money. Make the border case that this is a good thing to invest in more broadly. Thank you very much for that, David. I think that that was really helpful to set that out in the way that you have done. Jeremy Balford has had his question on this theme answered, so I am going to move to my colleague Faisal Chowdry and then we will move to Emma Roddig after that. Good morning, panel. I have a couple of questions. I think I will direct the question to Emma first. How much will the other budget line be affected by increases in social security spending? Generally, how much of an impact does increase in social security have elsewhere? Is that correct? Is that just to clarify the question? Of course, you invest more in one area and there is a consequential need for either increased funding from taxation or from a reduction elsewhere in that very short-term analysis. Over time, David has set out that those things are not the bill and end all, but there is potential for preventative savings over time, so it is not necessarily a zero sum game. There will always be trade-off policy decisions. The important thing from a scrutiny perspective is to understand the rationale for why increases in expenditure have made in one area and to understand the rationale for where spending has been reduced and to check that there has been a full consideration of the impact of reductions in spending as well as increases. Sorry, my next question is, is there a risk that budget cuts are a false economy? How do you assess the risk that more people will be put into the social security system? I think that that is a very relevant point. That is why I mentioned specifically about the being and assessment of the impact of spending cuts in other areas. If you are reducing public services as a result of cutting local government spend, for example, that might mean that people are less likely to get support to improve employability or financial security in terms of having support services for access to benefits in the community. That might increase their reliance in the future in terms of some of the means-tested benefits and, potentially, if it leads to health impacts in terms of mental health, it could have very long-term impacts on public spend. It is an important point. A process of salami slicing of different budgets in order to get to the right number is very dangerous in terms of impacts on people and there being those unintended consequences that you are referring to. David Whittle wants to come in on that point as well. Hi, thank you very much. I keep saying this, I agree a lot with what Emma is saying there. I wanted to come back to your first question and add a couple of extra points on that. I think that there are three quarters of a billion pounds gap between the blockchain adjustment first, such as security, and the forecast for actual spending. That is about one and a half to two per cent, I think, of the Scottish Government's resource budget. That might not sound a huge amount, but when you look at it compared to individual budgets to put a scale on things, it is about four per cent of the health budget, maybe six or seven per cent of the local Government budget. Finally, that amount of money is going to be challenging, especially given the other spending pressures that are faced. I think that there will really need to be difficult decisions made around privatisation. I think that the Scottish Government may need to look at taxation if it is serious about funding both welfare measures and addressing the pressures on other areas. Indeed, in the longer term, I think that the UK Government needs to be serious about looking at taxation again because, to quote a song, the only way is up when it comes to public spending in the next decades, given the ageing population and demographic change and rising cost pressures. There are choices that you can make about not meeting all those pressures, but you need to make a choice to either put taxes up or you do not meet all the pressures coming down the line. On the second point, I again agree that salami slicing is not the way to do it, and what I hope the Scottish Government is doing in the spending view is, as far as possible, looking at, right down to individual programme levels, what are the values programmes, both what is the value in terms of saving money. In general, most spending areas do not save money elsewhere, but some will. Some will have very high returns, but also the wider value to things. Even if it is not saving money, is it very valuable for the impact on families, communities, the economy, and so on? That is what I hope is being done. One of the things that the Government will be doing is asking departments to scenario plan around what would you cut if you had to make a 5 per cent cut or a 2 per cent cut to your budget to get departments to flush out their own ideas for where they could best make cuts. That is what I wanted to add on that question. Thank you, convener. My last question to both of you, I guess. Should the minister be open and publish what budget cuts are being foreseen to pay for further social security spending? I can start on that. It has to be part of the spending review, but seen in the round, social security is not the only area where there will be prioritisation of spend, given what the framework document says about, particularly child poverty, which will have social security implications and climate change. There will need to be openness and transparency about what those priorities for spend mean elsewhere, especially when there is a big gap between expected expenditure-respected funding. I would not necessarily expect that to be explicitly saying what is being cut to pay for social security, but it will be what is being cut or what is being changed in order to pay for all the new spending priorities that come through. I agree with that. I would go a bit further and say that it would be actually unhelpful to try to say which areas are being cut specifically for social security, because the budget is a whole and money is fungible. Saying that such an area is being cut to fund social security, you could easily say that such an area is being cut to fund another priority area. In fact, the temptation might be for Government to say that it is being cut to fund this or that. I think that it is better to do it in the round, as Emma was suggesting. Obviously, I think that the Government will emphasise more the areas that it is making increases than taking cuts, but the document should at least outline where difficult choices have been made. Thank you very much for that. I will move to questions now from Emma Roddick, who joins us in the room, and then Miriam McNeir, who joins us remotely. On the topic of budget scrutiny, is it more important for us who are tasked with scrutinising social security to make use of the medium-term financial strategy than it is for other committees? I will ask that to Emma. Clearly, there are particular issues because we already know that there are already committed to spending, which goes above and beyond the money being transferred through the fiscal framework for these areas. It is obviously quite apparent that there is that gap there. The Scottish Fiscal Commission, in their evidence tube before Christmas, was able to be very explicit on that. A couple of points. First, as I said before, we expected there to be divergence in policy between what was previously done under the reserve system and what is being done under the whole system. That is the whole point of the devolution. Getting too caught up into that gap as being the most important thing is probably not the right thing to focus on. It is much more about understanding how social security fits into the Scottish budget and how policy decisions fit into that. The funding coming from the UK and Westminster forms part of that whole picture. It is not just about social security, but I think that there are particular issues that could have been made more of in the MTFS. I think that I noted a couple of them in the submission that I gave, but I know that you are coming to this later today in your session, but it is about inflation and upgrading. That is obviously a key financial risk around things such as future policy changes and understanding the appetite for that. We know that there is a consultation on the replacement for carers allowance. What changes might come down the line from that that has not been taken account of in those documents? It is definitely worth the committee to scrutinising that and potentially asking some questions about what is and is not included and what more has been done to strengthen the understanding of the financial risks around social security. I think that it is important for the committee, because it is an area where it is relatively easy to see those issues coming down the line years in advance. Going to your written submission, I noticed that you said that there is relatively little analysis in the MTFS on social security outlook. Is the MTFS enough for us, or should we be taking a more frequent and active monitoring role? If so, how would we do that, particularly considering the current volatility? The approach that you have taken as a committee in hearing evidence from the Scottish Physical Commission and getting a fuller picture than what is presented in the MTFS is probably necessary for you as a committee. I would potentially press the Government to include more in the MTFS in the future about social security. There was more probably in the framework document for the spending review than there was in the MTFS. Taking the two documents together, you get a bit more insight into what some of the pressures are and how some of the analysis has been put together that you do not get from looking at the MTFS on its own. I think that there are improvements that can be made to that document. There are clearly things that are not explicitly addressed or are mentioned. I think that more scrutiny of the Government and ministers on that is appropriate. Thank you, convener, and good morning. I will be happy to say something about the connection with the economy in other budgets. You touched on the answer to my colleague Pam Duncan-Glancy, but it would be good to hear more. Is there anything like that happening at UK level? There is a good practice, experience and so on. Is there an approach to that in any other countries that you are aware of? Who would you direct with to that? That is posted to Emma, and maybe David could add to that. Can I just clarify the question? That is in relation to linking social security to sort of areas of the budget. In reference to your written submission, you made the connection with the social security spend to the wider economy and the public spending is missed. You gave an example that investment in social security had potential to reduce NHS and social care spend, so I just wanted you to expand a bit on that, if you could. I will let David answer about the rest of the UK, but my comments on that were very much with the Scotland and the Christy commission in mind in terms of how we talk about prevention. A lot has been quite as a critical pillar, I suppose, of policymaking in Scotland. In pretty much every Government document, you will see the words prevention mentioned and how important prevention is. We either see analysis of what that means in practice in terms of where there are those linkages being made. Potentially because of that, we therefore do not see the monitoring and evaluation that would allow over time for us to understand how those linkages happen in practice. There is a link between increasing the Scottish child payment, reducing child poverty, better educational outcomes in the future and better health outcomes in the future. A lot of that is based not necessarily on evidence from Scotland but on our understanding of logic and evidence from elsewhere. It is key in terms of thinking that if prevention is a critical pillar of policymaking in Scotland, we need to be much better evidencing that and being better able to make the case for that and to understand the extent to which we are able to prevent poor outcomes down the line in terms of those wellbeing issues. That is why I have honoured in on that because it is such a theme in Scotland, but it can be quite frustrating that it is talked about and then not always followed through in terms of the analysis. Is there any good practice in other parts of the world on how the link is assessed? I am going to pass to David Seabee if he has any thoughts on that and when I can come back in. I will answer it with my academic economist hat on. The challenge with really credibly showing the link is that you need to have a policy that is rolled out in a way where you have got what we call a treatment in the control group. You can compare the outcomes, the behaviour for those that benefit from the policy from those that have not benefited from the policy, and you can compare the differences in outcomes. You can have a good idea of what was affected by the policy as opposed to what was just other things going on in the background over time as a policy happened to be rolled out. There may be opportunities to do something like that in Scotland given the roll-out by age group of children. Colleagues have looked at the impact of rolling out changes to the benefit system in the other direction, where there were requirements for lone parents of children of different ages to seek work at younger and younger ages with their children and use that to look at the impact on mother's employment using the phased roll-out of the schemes. If there is a phased roll-out of the reduction in the age in which the children lose eligibility for those payments, it could be an opportunity to look at that for example for the child payment in Scotland. I suggest that we engage with academics in Scotland and elsewhere to think about can these policies be evaluated. I wanted to mention linking up social security policy to the economy. One thing that is often thought about at UK level is what is the impact of social security policy on working behaviour. Sometimes, policies are made very much to incentivise work, for example, things such as the working tax credit or reductions in the taper rate for universal credit or in-work retention bonuses and things like that. Other times, work behaviour is seen as a potentially unintended consequence of changing the security that you reduce incentives to go to work if benefits go up and there is more to lose from entering work. I mention that because there is one area of benefits policy that, over time, might become a more significant disincentive for work because of the particular way that it is designed. It might be an opportunity to reform the way that it is designed. That is the child payment. The Scottish child payment is a cliff edge. When you lose eligibility for it, you lose eligibility in total. It is not tapered away, so you can earn an extra pound or two of income. You lose the full amount of the Scottish child tax payment, which, say that if you had two children, it could be £40 when it is rolled out, for each of them £60. That can act as quite a strong disincentive for people taking a pay rise, working cover up extra hours. Reforming that, it would be more complicated, but reforming that so that it is tapered rather than a cliff edge, that could be a way to think about the interaction between benefits policy and impacts on economy and people's livelihoods in a slightly different way. Mary, do you have any further questions? One final question. In the submission to us, the Scottish Fiscal Commission indicated that the precuted several staff to begin work on the fiscal sustainability report. That will cover the look for the Scottish Government's funding and spending plans over a long time. It horizons over 30 years. Do you welcome that development? What do you think it will bring to the table? Will it assist with future budget settings? Again, if you cannot respond to that, you can certainly pop in a written response if possible, but I will pop that out to both views. I will come in just to say on your question that we have not been able to answer on international evidence of that prevention. I will come back to you in writing on that. I think that there are some good examples that we could point to, which would be good to follow up on. I think that it is an area that we could see more on in Scotland. In terms of looking at the longer term, I think that it will be helpful for social security. That long-term look, because, as Ruth Davidson and I said at the beginning, demographic change tends to happen quite gradually. We know that we will see an aging of the average age of the population. With the resulting comorbidities that come with that, it may put more pressure on some of the benefits. I think that that will be useful, that long-term outlook. Of course, it is very uncertain when you are looking over that period of time, but for some of those thinking about that cool caseload, it will be quite helpful. David, can we hear from you briefly? Yes. I was speaking to the Scottish Government's commission on Monday about their plans for this report and the lessons that can be learned from the UK fiscal sustainability report, some analysis that we did at the IFS a few years ago. It is a really good thing that they will be doing. I can completely understand why they have hired several new people to look at it, because I think that the complexities of doing it for Scotland, even more than doing it for the UK, because it does not just need to project forward, if you like, Scottish revenues and Scottish spending pressures, but it also needs to project forward what happens in the rest of the UK and how the UK Government responds to that because of Scottish Government funding, depending on UK Government responses. We have some very useful talks about what can be done there. This is a really good development. I think that social security will be an important part of those projections, as well as other services that are expected to be strongly linked to demographics such as health and social care. It is a fantastic development. Thank you very much for the answers to those questions from Marie. I will move now to questions from Miles Briggs and Jeremy Balfour. I have just one quick question, because I think that we have covered quite a lot with colleagues' questions. It was with regard to the work that we have after yourselves, and that is with the Minister with regard to upgrading of benefits. Specifically, the Scottish Government has announced that six social security benefits will be upgraded by 6 per cent from 1 April, given the cost of living pressures that we are seeing. If that is the direction of travel around upgrading, what sort of cost does that present for the basket of Scottish social security benefits? What additional pressures will that have in the coming years? I saw that announcement just before coming into committee. Sorry, I did not have time to run the numbers, but you could ask the minister for that information. He will thank me for that. Clearly, it has come quite late in the process, but I will not make a comment particularly on whether it is a good thing or a bad thing. I think that it recognises particular pressures at the moment and some exceptional circumstances. I would not expect it to set a precedent particularly to move away from using September as the reference month for upgrading of benefits as is usually the case. It is a one-off because of quite particular exceptional issues at this moment in time. Of course, there are a lot more uncertainties in the macroeconomy and the global economy than we have had for many years. Inflation could be very bumpy for a number of years. Potentially, we need to think about how to ensure that an upgrading policy is able to capture that rather than just choosing one month in a year and assuming that inflation is generally stable across that period. The announcement has only just come out this morning. I am not sure if the UK Government will also follow suit. I do not think that there has been any announcements made on that. It is necessary for many people to have their incomes from social security to keep up the cost of living. However, it does have pressures on the budget. No doubt about that. Thank you. David, do you have anything to add, if not I can hand back? Very quickly, colleagues at the IFS have highlighted the particular difficulties around upgrading past inflation at a time of volatile inflation. Whether or not it will represent a change, the opportunity is to change this at a UK-level or Scottish-level. We have inflation forecasts. Inflation forecasts could be used to set benefit rates in a forward-looking way. I think that what I would try to avoid is a benefits lock where they go up by the maximum of forecast or past inflation. We have seen with the pensions triple lock that those systems can lead to ratchet effects and substantially push-up spending. I mention that because, for example, if inflation goes up by more than past inflation to take account that inflation is now higher in April, inflation in the coming September was likely to be quite a bit higher than what it will be in the subsequent year. One might want to think about this as smoothing and counting for the effect of actual inflation, rather than necessarily leading to a permanent uplift in the rates of benefits. The point that I am trying to make is that there is sense in thinking about how we upgrade benefits in a way that makes it more responsive to inflation but does not make it responsive in one direction than it is responsive in both directions. Otherwise, you could have an unintended upward ratchet effect on benefit rates and hence the cost of benefits. If you want to increase benefit generosity, that should be an active policy decision, not the unintended consequence of a well-meaning but not particularly well-designed policy like triple locks or double locks or so on. Thank you very much. In the interest of time, can I ask members now to group your questions together that you have remaining? We have not actually really rigidly stuck to the themes. I should be set them out anyway, so I will ask Jeremy Balfour to start us off and then I will go to Faisal Taudry. Thank you, convener. I have two questions, so the first one is aimed at David. David, you are interested in tapering in regard to some benefits. Can you point us to any evidence of tapering across other parts of the world in regard to things like PIP and DLA in regard to the new benefit coming here in Scotland? We have done a lot of research to say why should I get better if I am going to lose my benefit? If I can suddenly walk 20 metres or 25 meters, I will lose the car, so what is the benefit of me getting any better? Is there any evidence of tapering across the world in regard to things like PIP that we could look at here in Scotland? That is a very interesting question. When you mentioned tapering, I was thinking that you were mentioning tapering in relation to income, and I was going to say that of course, these are not income-based benefits. These are benefits based on need, and tapering would make it less generous, but you are mentioning a point about tapering in respect to health needs. There is some tapering in there with the different rates of support, so you have higher and lower rates depending on the severity of your needs on the different elements of things. One option would be to increase the number of these different standards of benefits so that you can potentially move up or down these things in a more graduated way. The risk would make it less of a big change if your health changes modestly. The risk with that is that with more boundaries between benefit rates, you would have more potential for disagreement about which potential benefit rate someone should go on. It could open up the floodgates to potentially lots more disputes about benefit rates. The other option, which I know is done in some other benefits, is to have a sort of timetaper—maybe we mean a timetaper as well—whereby you remove—rather than as soon as your health condition is changing, you get the benefit taken off immediately, and you have a phased withdrawal of the benefit. I must say that I am not an expert on international benefits systems, and I can say more about this, but I think that the idea of saying that, actually, we are not going to withdraw money straight away, we will withdraw it in stages so that you can adjust your changes in circumstances, that is actually potentially a good idea. It would come with costs, but that would both boost the adjustments in people's income and potentially make it less of a concern, as you say, about people being concerned about the incentives around taking actions to improve health. I know that there have been schemes of that for in-work benefits. For lone parents, there were schemes where lone parents could keep more of their benefits when they went into work precisely so that they did not think that there was no incentive to go into work because they got to keep the benefits for at least a period of time whilst they were in work. Those schemes do this for other benefits, so they have for other benefits in the UK. I do not know about disability benefits internationally. Maybe Emma knows about that. No, apologies. I do not have anything further to add there. Again, I am not an expert on international benefits systems. Okay, thank you. That is helpful, and it is quite interesting to think about whether you can have a time tapering. Moving on to my final question, that is the fiscal framework, which is a mystery to most of us. However, obviously there is negotiations going on around the fiscal framework at the moment between the UK Government and the Scottish Government. I suppose that my question is about social security. How important is this negotiation going? If you were advising the Scottish Government, what would you be asking for? Who do you direct that to first? I am happy for Emma to start, if she wants to. Yes, of course. David will give a fuller answer on this, but there are a couple of specifics in terms of some of the issues that I am aware of with the fiscal framework and social security. First, it is really important that social security is a full part of any talks and re-negotiations on this, because up until now it is quite often very much focused on income tax and social security. It is less understood in the context of the fiscal framework. A particular issue that I want to raise is around the issues with spillover, because that comes up quite a lot in terms of development. When we think about developing changes to social security, the transfer of benefits, the extent to which there will be implications in terms of spillover, so that a change in Scotland needs to additional spending in the reserve system, and that money is requested back from the Scottish Government by the Treasury. The issue that we have at the moment is so much uncertainty over when spillover rules would apply. There has not really been a test case necessarily of it. The only one that I know has been raised and resolved is in relation to whether the Scottish child payment led to an increase in uptake on universal credit. Would that be a spillover? As far as I understand, written submissions to the Parliament has confirmed that the Treasury would not view that to be the case. However, in terms of replacement for carers allowance in particular, there are a lot of very valid concerns that might need to spillover impacts in terms of some of the way that is used as a passport to benefit in the reserve system. It would be good for there to be more understanding of how those issues are resolved and resolved quickly within policy development, because it is constraining the speed at which things can be considered and the understanding of the implications, not just for civil servants working on this but also for those of us outside of government who are trying to potentially look at the implications and not necessarily advise, but look at the issues that are on the table. It is where there is so much uncertainty about spillover that it is quite difficult to do. The issues can linger and, if they are not resolved, they put a bit of a halt sometimes on scrutiny and policymaking. That is a particular issue, but I will refer to David. David, just before you come in, I am conscious of time and I understand that this is a big issue. You could maybe put some of this in writing to us, but my specific question for you, David, is that, in regard to any divergence in benefit criteria going forward, can this be reflected within any negotiation? If, in a year's time or 18 months' time, the Scottish Government or the Parliament decide to increase the mobility to, say, 50m rather than 20m, much more people will get that, should that be reflected within the fiscal framework now or is that something that is simply impossible to do? As I said in my answer to an earlier question, I think that it is vitally important that the Scottish Government bears the cost of its own policies, but I do not think that it would be appropriate in the fiscal framework to have a mechanism by which, in effect, the block grant increases to help Scotland pay for benefit changes that it wants to make itself. In the long run, the only way to fund increased spending, unless it does generate further savings in other areas, is to have higher taxes or to spend less elsewhere. As I said, I do think that there is a role for the fiscal framework to potentially provide some additional flexibility in the short term. In a report with David Bell and David Iser, we recommended enhanced borrowing of zero powers. Some of that was for forecast errors. Some of that was saying that there should be some discretionary resource borrowing, potentially limited to around £400 million a year, about 1 per cent of the budget, at least initially, given the wider UK fiscal framework. That would give time for Scotland to make changes to benefits and plan how to fund them over several years, not having to do it immediately. That would give the flexibility that Emma was talking about at the moment, because the fiscal framework really does the strain borrowing. You have to find the money straight away for policy measures. I think that the fiscal framework could give additional flexibility of a modest degree to make policy a bit smoother in that area. I can forward you some information after the session. Thank you very much for that. I am going to ask the members that have remaining questions, because we are over time to get their questions on to the record. I will ask them to ask them, and then I will ask both of you if you can perhaps submit in writing answers to those questions. We have some questions from Faisal Chowdry, Pam Duncan-Glancy and Emma Roddick. If we can get them on the record, that would be fantastic, and then we can get answers in writing. My question is to both Emma and David. How is it possible to plan for six years ahead, given the current levels of economic and price volatility? Do you have another one, just because we are going to get them to answer them in writing? Okay. Thanks very much for that, Faisal. Pam, if you can ask yours. Thank you, convener. My questions were around the child poverty targets specifically, and you have said in submissions that it is unclear from the medium-term financial strategy or in other documents so far how the spending choices will progress towards meeting those targets. It would be helpful if you could set out whether you believe that the spending choices of the Government will meet the child poverty targets and also your view on whether it will meet them for the target specific priority groups and finally what you would expect to see in the spending review from the Government in order to meet the child poverty targets. Thanks very much for that, Pam. I think that those are great questions that we need to have their answers to, and Emma finally yours. Thank you, convener. I had a question around child poverty. I think that we expect that reducing child poverty will create budget savings in other areas, but it is hard to solidly link underspends or reduced spends elsewhere to a reduction in child poverty. Are there ways that you can suggest to monitor those effects as good as possible, and how can we evidence knock-on effects and evaluate success on that level? My other question was about the fiscal framework review. It is fair to say that a hybrid social security model comes with a lot of challenges. We hear a lot about the limitations on future planning due to threat of changes to the block grant, extra costs of diverging from UK policy and so on. Does having a hybrid reserved and devolved social security system make financial sense? Can we ever protect the social security budget from risks effectively while we are so intrinsically tied to UK policy decisions? Thank you very much for those questions, Emma. I would like to thank witnesses for coming in today, and we look forward to receiving your written submissions to those final remaining questions because I think that the answers to them will really help us in our role as the committee. Thank you very much. I will suspend briefly for a change-over of witnesses. We are now going to consider agenda item number 3, which is support in legislation. We are going to consider the social security uprating Scotland order 2022. We were also due to consider the social security uprating miscellaneous amendments Scotland regulations 2022 at this morning's meeting, but the committee received a letter from the minister yesterday, which explained that the miscellaneous amendment regulations are due to be withdrawn and relayed. Hopefully, the minister will be able to provide some information with regards to that this morning. I welcome to the meeting Ben Macpherson, Minister for Social Security and Local Government. The minister is also joined online by Scottish Government officials. We have Simon Cooch, who is the head of cross-cutting policy unit, Camilla Ware and Dondo, Solicitor and Dominic Merlin, economic advisor, social security analysis. I invite the minister to make an opening statement. First of all, I offer my sincere thanks to you and the committee for accommodating the last-minute changes to the scrutiny process for the social security uprating miscellaneous amendments Scotland regulations 2022, which had been the intention for us to discuss today. As the convener has alluded to, the committee will be aware of the cost-allowing pressures that have grown significantly since we took the decision on uprating benefits some time ago as part of the Scottish budget process. We know that those pressures may rise further, and we know that they will disproportionately impact the poorest households. That is why I took the decision to see what more could be done to support people using our social security powers. In response, I am now seeking to use the uprating regulations to provide additional support, which will primarily help low-income families and unpaid carers. In order to do that, it is necessary to withdraw the previous regulations and relay them under expedited procedures that I am doing today. Please accept my apologies for any inconvenience that causes. However, I am sure that you and the committee, more widely, will understand the reasons why, and I sincerely hope that you will support them. I understand that the committee will now consider those regulations on 31 March, but given the interests that the committee will have, it is worth broadly outlining the changes that have been made now. Of course, I am happy to come back later in the month if the committee wishes me to do so. I am now proposing additional support by further increasing several forms of devolved social security benefits and assistance from the previous 3.1 per cent increase to the 6 per cent rate. That will apply to job start payment, young carers grant and funeral support, and subject to parliamentary approval, uprating will now be almost doubled for those benefits. Best start grant will also be increased by 6 per cent, and we will bring forward future regulations that will also affect the increase to the carers allowance supplement. We will also now increase child winter heating assistance by 6 per cent, greater than the 5 per cent that is already proposed, supporting 19,000 families of severely disabled children with heating costs. As the committee is aware, we have already taken the decision to double the Scottish child payment from £10 to £20 a week, a 100 per cent increase, which will immediately benefit around 111,000 children. We increased best start foods in August 2021 from £4.25 to £4.50 a week, a 5.88 per cent rise, which exceeds the rate of inflation and is close to the 6 per cent uprate for other benefits, so there is no change to that benefit. Turning now to the immediate task in hand, the committee is considering the Social Security Uprating Scotland Order 2022. That uprates benefits for which we have executive competence, but which are currently administered by DWP under agency agreement on Scottish ministers behalf. We have no discretion around the level of uprating of those benefits. The agency agreements in place with the Secretary of State for Work and Pensions, which allow DWP to deliver those benefits on behalf of Scottish ministers, mean that we are committed to uprating those benefits at the same rate as DWP. They are therefore uprated by 3.1 per cent in line with the CPI. It is, though, a matter for the Scottish ministers to make an order affecting the uprating, which is what you see before you today. I would like to thank the committee again for its scrutiny of the uprating order and its forbearance around the need for urgent changes to the uprating regulations. I look forward to any questions that the committee may have. Thank you very much, minister, and thank you for providing that clear and concise explanation of why we will be looking at relayed regulations. Given the pressures that households are feeling across the country right now, I think that that will be a welcome decision for us to make on the 31st. As of today, do any members have any questions? Jeremy Balfour. Good morning, minister, and good morning to your officials. Obviously, we will look at this on 31 March, which is fine. I want to show that we can look ahead with the appropriate planning. With the increase in regard to those benefits, presumably that cost will be met out of the Scottish Government budget rather than from what has already been planned. Where is that money coming from? Is it going to come from the social security budget that was approved by the Parliament, or is it coming from a different budget from a different department? When we passed the budget, we were told by Kate Forbes that every penny had been accounted for, every money had been spent. This is obviously extra money that wasn't in the budget. Where is that money coming from? That's an important question, without needing to get overly detailed into the complexities of the internal correspondence within Government, although I'll bring Dominic in after me for anything further that he may wish to add that it's relevant. We have collectively, as ministers, looked at the situation before us of the real pressures that families are encountering and going to encounter in the period ahead. We are determined to provide assistance and help where we can, using the powers and resources that we have. We have looked at what we could absorb within the social security budget. The additional amount that we are allocating in the financial year ahead is £2.7 million in order to undertake the upgrading. We have absorbed that in the social security budget. Will that mean that there will be any other... I suppose that I'm trying to work out whether it's about £2.7 million coming from us. Was it sitting there for a rainy day, or had it been allocated for a different purpose and is now being transferred probably quite rightly to this? I'm just trying to work out how much flexibility do you have within your budget for this. Budgets always have a degree of flexibility, and we have decided to... This will involve considering the cross pressures in the course of the financial year, but we have come to the position that we feel that we can absorb a £2.7 million increase. Does this have any knock-on effect for other things that you might have been thinking about in mid-financial year? You might have been thinking that we could maybe be a bit more generous here, or we could maybe think about this benefit there. Is that now being put on my back shelf because you're bringing much money forward fairly early on within mid-financial year? It is not our intention that this will have an impact, particularly on those accessing social security. We have decided to consider this, as I said, as an absorbed cost and pressure within the social security budget. Dominic or Simon, I don't know if you want to add anything to that that may be helpful and appropriate. There would be nothing to be minister. I'm not sure if Simon has anything further to add. It looks to me like everybody has frozen there for a little while. I don't know if anybody did have anything. I understand that Foisal Chowdhury has a question. I don't know if I missed it or not, but carers' allowance supplement was going to be kept at its higher rate after Covid. Did that just fall by the wayside? As I said in my opening statement, the carers' allowance supplement will be uprated by 6 per cent. In terms of the carers' allowance supplement additional payment, which we passed legislation on just a number of months ago, that is a point of consideration for the Government on going into the period ahead. I am sure that we will discuss that with the committee and, indeed, in the chamber in points in the months ahead. I can confirm that the carers' allowance supplement will be uprated by 6 per cent. Pam, do you want to come in, Pam Duncan-Glancy? Thank you, convener, and thank you for all I make to take the question. I know that I indicated in advance that I might not have one. I have two questions if that is okay for the minister. Obviously, we face a considerable cost of living crisis right now, and I believe that that is well meaning and the right thing to do. We heard this morning that the IFS said that it was well meaning but not well designed the way that you have done it. I do worry slightly that, on Thursday, the papers that we got for this committee suggested that you were going to replicate and, in fact, in not so many ways, you were not going to upgrade at all. Can you set out what has changed between Thursday and today to take you to this decision? Not because I think that it is the wrong one, but because I am keen to know that we are taking decisions properly with robust information and in a considered fashion. My next question is about the benefits that we are being asked to upgrade today around the 3.1 per cent that are still being delivered under agency agreement. It is not so much a question more of a statement to put on record that, again, it is another frustration of mine that we could have been doing something a bit differently had we been fully delivering those benefits in Scotland. What you have done in other areas shows what we could have been doing for disabled people and carers had we not been using agency agreements still at this stage. I will come to those two points in turn. Of course, the regulations that were based on the September CPI followed the position that had been undertaken in years past since we introduced the social security benefits to operate on that basis. The rising cost of living pressures that we have seen both pre-invasion of Ukraine and since have changed the situation for all of us and for families affected in particular in lower-income households and unpaid carers. As a Government, we are committed to doing the right thing and helping people where we can. We looked carefully at the situation, we looked at what we could do with our powers and our resources. We have done what is necessary to make sure that we can deliver that uprating. With regard to the point about the social security benefits that are delivered on their agency agreement, we cannot create a two-tier system because we have people in the Scottish system and people in the reserve system until they transfer into the Scottish system to clay those on disability benefits. I appreciate the position of Pam Duncan-Glancy, but this Government is moving at pace to undertake the delivery of devolved social security and to transfer in a safe and secure way people into our system. We are still in a pandemic that made it challenging for us to do that to our original timetables, the timetables needed to change not just for the Scottish Government but for the DWP. I think that the fact that Social Security Scotland is about to launch its 12th benefit on Monday, seven of which are new, is pretty remarkable in the period that we have had since 2018. We are building an institution here, an organisation that needs to be strong not just in the period ahead but for years to come and that relies on building a strong foundation. In an ideal world, would we have everyone in our system as quicker than has happened, of course, but that takes time. It is not like we just get a USB stick from DWP and plug it into our computer. It is a much more complicated process than that and we are undertaking it with diligence and responsibility. Can I make one further comment, please? I will also just to connect the record. I said that we got our papers on Thursday, we didn't, we would have got them on Monday. Forgive me, I was getting confused with which committee papers I was describing. I thank you for that answer, I thank the minister for the answer and respectfully suggest that I don't suggest that this is about a USB stick transferring information at all. We have had since 2018 at least to get moving on this and so there is still a considerable amount of time passed. I know that the minister understands that I also understand that it is complex but we could have been operating disability benefits and carers benefits by 6 per cent today and we are not. I just want to mark on the record that I think that that is unfortunate that we have not been able to take that decision because we are still not delivering those benefits here in Scotland for the people of Scotland. I respect Pamdan Glancy, of course, highly, but I would just emphasise again that we have built an agency from scratch since 2018 that is highly performing, employs nearly 2,000 people and we have delivered several benefits. We will deliver our 12th on Monday, start delivering our 12th on Monday and seven of those benefits are new and only available in Scotland, some of which we are discussing operating today. For that minister, I can see from the chat that Simon might want to come in. I don't know if you want to bring him in. There seems to be a delay. Simon, we can't hear you. I'll go to a question from Miles Briggs and then we'll try and see if we can get Simon back in. Thank you, convener. We've had a good run without Gremlins being in the system really with this committee. Morning minister, good morning to your officials as well. I wanted to ask you to outline the £2.7 million that you've identified in this year's flexibility to do this. Has there been any other money also identified, which potentially as this cost of living crisis goes forward, there would be flexibility to come back to committee on? As the member knows, there's significant pressure on the Scottish budget for the financial year ahead across the portfolio. The finance secretary has emphasised that many times to Parliament. As I said, we have identified the resource that we can absorb within our budget. We continually look to see where we can use resources efficiently and for the benefit of the people of Scotland on a regular basis. We've had to work hard internally to identify the resource and make it available. We're glad that we've been able to do that. I'm not at this point going to specify or able to specify if there will be other resource available in the course of the financial year. Of course, as the member will know, budget is allocated and then we go through the process of the financial year and there's reconciliations and reconsiderations of positions. However, I can emphasise that, throughout the process of the next financial year, just as the Scottish Government always does, just as all ministers and myself and the cabinet secretary in social security do on a consistent basis, we look at what resource is available and how we can utilise that to help the people of Scotland and particularly to help low-income households and unpaid carers with regard to social security. I suppose that the key point that I'm trying to get at is looking at potential unrealised additional take-up or unmet need, for example, and where are your projections on that? I think that most people would expect more people potentially to seek some of these social security benefits. I'm just wondering in terms of that spend, where that is being targeted and if we do see additional people coming forward, where that flexibility has potentially now been lost? There's no loss of flexibility in that regard. We set budget allocation on projections, and, of course, that involves the Scottish Fiscal Commission, but we project on the fact that we will also be encouraging people to uptake benefits. You'll know, both in the legislation of the 2018 act and in Scottish Government policy intention and documentation, that we are strongly committed to promoting benefit take-up and to undertaking what's necessary. We've had good discussions at the committee on how, collectively, we can all play our part in promoting benefit take-up, and I think that that becomes even more pertinent in the period ahead. I'll just call again on all members to work with the Government and to work with the different public bodies involved in that collaborative effort to raise awareness in communities of what support is available, encourage people to apply if they think that they might be eligible, and to tell their friends and their neighbours about it so that we can spread the word of what support is there. Of course, some of the benefits that we would be promoting are some of the ones that I've set out today that we intend to operate by 6 per cent. I appreciate that. What would be useful, and I don't know if the minister would commit to that, in terms of our financial scrutiny as a committee, to be able to also see some of this potential flexibility within budgets? I don't know if you had a chance to see the previous session we just had, but I think that there is a lot of work around what is approaching a three quarters of a billion pound future projection and where we can have oversight of more information on that. I think that that would be helpful for the work that we are trying to do. I did see some of the previous session. I am certainly happy to have correspondence, of course, with the committee, on the important points that Mr Briggs raises. It would be a question for the committee. This is not just a question for social security ministers but also for the finance portfolio and how the committee may want to consider those points. I think that that is something that the committee would have a dialogue with you about. It looks like Simon left and came back in, and we would like to perhaps try again. I will bring Simon in before I move to Marie McNair, who is online, who has a question. Simon, we still do not have any volume from you, unfortunately. I think that perhaps we might have to come back with that in writing, unfortunately. Could I please move to Marie McNair, who is remote with her question? Thanks, convener, and good morning, minister. From your letter to the Presiding Officer, you are aware that in light of the cost of living crisis that you plan to bring forward, our legislation will increase that lift to 6 per cent for Scottish benefits and is really welcome, and it will help some people to cope with the impact that the crisis is having on household incomes. You set that out because it is not possible for a disability benefit because of the current welfare uprating of Westminster's uprating policy. However, the resolution foundation has asked the UK Government to uprate higher for many benefits as administratively possible, but at least the UK Government and tax credits. That could include DWP disability benefits. It would be an obvious way to assist with the cost of living crisis. I have not seen any in our remote possibility that they are going to do this. Is that also your understanding of the position? Thanks, Marie McNair, for those important questions. I think that we have had no indication from either UK ministers and the DWP or the treasury of an intention for them to uprate above the September CPI of 3.1 per cent. Of course, we would encourage them to do so. We have set our intention and our determination in the regulations that we are now laying to uprate the six social security benefits that we can fully determine up by 6 per cent. Of course, we are increasing the Scottish child payment by 100 per cent. We are doing what we can with the powers and resources that we have to provide assistance. I would encourage the UK Government to do the right thing and operate social security benefits across the UK, particularly in areas in which there is the current dual process of delivery and introduction by the Scottish Government and case transfer with regard to disability benefits, in particular, child disability payment and adult disability payment. I would encourage the UK Government to increase PIP and disability living loans for working-age adults up above 3.1 per cent and to look at universal credit again. The case to increase universal credit and the other benefits that they control are compelling. I hope that they will do the right thing in the March statement. Thank you very much for that. Before we move into the formal part of the session, I will bring Pam Duncan-Glancy back in with a final question. Thank you, convener. Has the minister considered any other ways or mechanisms where you could apply the equivalent of the 6 per cent up-rate to disabled people in Scotland or carers who receive carers allowance in Scotland? Have you looked at any other mechanisms that could be used to get that money into people's pockets? I am not fully clear on the specifics of Pam Duncan-Glancy's question, so I hope that the generic answer will suffice, but please let me know if you have any further points. In terms of cost of living support, we have taken the action with regard to the council tax position in terms of the action that Ms Forbes took just a number of weeks ago. We have the council tax reduction scheme, the Scottish welfare fund, which we are still significantly investing in, and the mitigation that we are undertaking with regard to the bedroom tax, which of course costs us tens of millions of pounds a year. There are a number of different measures already in place to support as much as we can. I think that the advantage of social security is, of course, that allows us to, with the system that we have, which I know that all the committee supports, with the devolved social security system, to get money into people's pockets. That is the real advantage of one having that system and continuing to develop it in a coherent and strong way for the period ahead and decades to come. I will remind committee that only members in the minister may take part in the formal debate. I invite the minister to move the motion. S6M-03002, that the social justice and social security committee recommends that the social security apparatus in Scotland order 2022 be approved. Do any members have anything that they wish to add on top of their questions before they are on the record? No, not seeing any indications. As no member wishes to speak in the debate, I will put the question on the motion. The question is that motion S6M-03002 be approved. Are we all agreed? Thank you. We are all agreed. The motion is therefore approved. I invite the committee to agree that the clerks and I will produce a short factual report of the committee's decisions and arranged to have it published. Thank you very much. That concludes the committee's public meeting this morning. I thank the minister and his officials, even if we had some gremlins. We couldn't hear from the officials for their evidence this morning. I now invite members who are joining us remotely to leave this meeting and join the private session. I suspend for that. Thank you very much.