 Good morning and welcome to the social security committee. I'm delighted to have you with us this morning. This is the 10th meeting in 2018. I remind everyone to turn their mobile phones off as they may disrupt the broadcasting. We've received apologies from Adam Tomkins' MSP. A giant item one is the decision to take items in private and to agree items three, the consideration of the evidence today, item four, consideration of the correspondence for local government and communities committee to be taken in private. Are the committee agreed? A giant item two is managing the implementation of Scotland acts. We will receive evidence on the social security aspects from the Auditor General of Scotland in our recent report. I would welcome Caroline Gardner, Auditor General for Scotland, Mark Taylor, Assistant Director and Maura Campsy, Audit Manager, Audit Scotland. I would like to invite Ms Gardner to make an opening statement. Today's report is the fourth in a series examining how the Scottish Government is implementing the new powers arising from the 2012 and 2016 Scotland acts. It assesses progress up to the end of January this year and provides an update since I last reported in March 2017. As you know, the 2012 and 2016 Scotland acts devolve a range of responsibilities for taxes, borrowing and social security. Overall, Scotland's public finances are undergoing fundamental change and implementing the new powers as a huge and complex programme of work. A significant part of the report focuses on the implementation of the new devolved social security powers. I am pleased to report that the Scottish Government's social security programme has made good early progress, but 2018 will be a critical year, and a significant amount of work is required to meet the planned timescales. That includes launching a new agency, Social Security Scotland, to deliver the carers allowance supplement in summer 2018, and putting the foundations in place for the IT infrastructure needed to deliver the devolved benefits. That will require effective working with other organisations, including the Department for Work and Pensions. The last time I appeared before the committee in September 2018, I outlined the lessons from our publication, Principles for a Digital Future. I am pleased to report that the social security programme has prioritised learning from other IT-enabled projects, and we found a number of examples where it is putting these principles into practice. The programme is not without risk, and I highlight a number of those, along with areas to prioritise in my report. In particular, making sure that enough time is built in for assurance activities for procurement, recruitment and succession planning will be key to managing those risks. The cost of implementing the new powers will be significant. The Government estimates that the social security powers alone will cost around £308 million to implement, and my report highlights the need to make sure that those cost estimates are refined as decisions about delivery are made and to report them transparently. Getting the right people with the right skills in place to implement and deliver the new social security powers will also be challenging. The size and complexity of the agency will increase significantly as it starts to deliver the full range of devolved benefits, and I have recommended that the Government needs to do more detailed workforce planning if it is going to achieve its ambitious timescales. Finally, convener, I would like to acknowledge the good engagement that my teams had with the Scottish Government's social security team throughout the audit. As you will be aware, there is a formal process for agreeing the factual accuracy of our reports with the Government. We listen carefully to its views, and we are always open to new evidence, but it is vitally important to Parliament that our conclusions are independent and are fully supported by evidence. Convener, we are happy to do our best to answer the committee's questions. Thank you very much. If I could perhaps open on an area that you said about the important working relationship between the DWP and the Scottish Government, we took evidence from the Secretary of State for Work and Pensions and asked her about the delays in the bedroom tax. The cabinet secretary has written to her, and it is quite unequivocal in that her concerns are increasingly concerned about the department not being consistent in displaying either the willingness or urgency to deliver what is very much a joint programme of activity. When I questioned the Secretary of State about the delay in the ability of the Scottish Government not to have to mitigate the bedroom tax but for that to be removed at source, she said that it was her understanding that there had been a delay and that the targets had been hoped for and ambitious. Let's call it a disconnect of understanding, but does that cause you any concerns about the working relationship at the moment and for the future working towards the delivery of other social security benefits? We say in our report, convener, that we found evidence of good working relationships on both strategic and operational matters at official level. It's harder for us to comment on the correspondence that you've quoted from there, but we also say in the report very clearly that delivering the Government's planned timescales will absolutely depend on effective working relationships. There is a risk, given the small scale of the benefits being devolved within the overall responsibilities of DWP but the very significant scale for the Scottish Government and for the people who rely on those benefits, that the balance of risk looks different from each end of that spectrum. That's one of the reasons why we think that more clarity about planning and continued close working between the two Governments is so important. It's probably also a good opportunity for me to flag with the committee that there's an on-going conversation between the two Governments about the audit and accountability arrangements. At the moment, it's not possible for me or for Audit Scotland to look directly at the workings of the DWP. That's reserved to my colleagues in the National Audit Office, so all we can look at at the moment is what's happening through the lens of our audit of the Scottish Government. I'm not sure if Mark wants to add to that in any detail. I think just to really echo what the Auditor General says about the importance of those relationships with which I'm sure the committee recognises and that whatever the discussions at ministerial level, our evidence in looking at the implementation of the new devolved powers was that officials are working very well together and that that work is on-going. I think the risk that we flag as the Auditor General said is that there's a lot still to do and it needs to stay like that and those both parties need to continue to be working together. For that to be successful, both parties need to play their part. Thank you very much. I'm going to open questions to the committee. You mentioned in your opening statement the size and complexity of the programme of change that needs to be delivered. Do you believe that Audit Scotland has the skills and staff available to deal with the new complex public service? How are you upskilling the staff to make sure that they do the best they can? That's a really good question and one that occupies my board, as you would imagine. This is new to all of us. It's new to the Scottish Government, it's new to us, it's new to Parliament and we're all having to build that capacity and expertise as we go. We are fortunate in that we've got very good working relationships with our colleagues in the National Audit Office, for whom the Audit of the Department of Work and Pensions has been a big part of their responsibilities for a long time, so we've been learning from them as we go. We're also grateful that the Scottish Commission for Public Audit of this Parliament, which oversees my budget, has approved some additional resources that we're investing at the moment in growing the size of the team working on social security. Mark Leeds on that programme, so I'll ask him again to talk you through it in a bit more detail. The thing to add to that is that we also currently, teams within Audit Scotland, are involved in housing benefit audit within councils, so again, bringing the learning that we already have about that together with, of course, a learning curve that we have around the introduction of the new powers. There's a distinction that I'd make between the detail required to understand the social security system and the different regulations and policies in there, and the broader look that we're able to do and reflect in this type of report about arrangements to set that up, how to manage the introduction of new and complex systems, and we're very well experienced and have a long track record of being able to comment on those sort of things. I think that the trick for us is to pull that together, and yes, of course, to build the team, to build the staff and to build the knowledge that we have on some of the detail. If I may, can I just confirm, so does Audit Scotland meet with the DWP directly at all to discuss planning, or is it all through your colleagues in national audit that you have to work? At the moment, the legislative position is very clear that I've got no rights of access to DWP or indeed to HMRC. Until the Scotland Act 2012 and 2016, there was no need for me to have that access. There was a clear line about what was reserved and therefore what was devolved. But as the Scotland Acts have come in, those lines have become more wavy. There is, as I say, a continuing conversation at the moment about what the new audit and accountability framework should look like to recognise that DWP is a UK body and that the audit responsibility is that of the national audit office, but equally to recognise that it's providing some very significant services on behalf of the Scottish Government and therefore this Parliament's got an interest. So getting the balance right to give me some access without duplicating the audit that's required is part of the conversation that's currently under way and that the Public Audit Committee has taken a significant interest in over the last few months. Is that lack of access providing extra challenge, would it be? I think so far it hasn't done, because our interest has been in the way in which the Scottish Government is implementing its new responsibilities and by looking at what they're doing and talking to our colleagues in the NAO, we can get a good enough picture. But I think as we reach the point where new benefits are being delivered, that starts to become more significant. We're discussing that regularly with colleagues in the Government and as I say, the framework itself is under review, but we are reaching the point where I think it could potentially become a problem. Okay, thank you. Thank you. Thank you. Mr McPherson. Parallel, just touching on the report and the points around data and IT, did you see evidence that the joint working is happening, particularly around data? And what is the risk to the programme if there are any delays in the DWP in providing the Scottish Government with the data-required interfaces to IT systems and planned details as necessary? I think the first thing for me to say before I hand on to colleagues is that the social security programme is a bit different from the income tax programme. For the income tax programme, the Scottish Government has no choice but to use HMRC to collect and administer the new tax powers. In relation to social security, it's chosen to do that, so building that relationship and being very clear about the expectations on both sides of timescales involved is critically important. Mark, would you like to pick up the question of what we're seeing in data terms? So the working around systems and data is obviously a big part of the challenge between both the DWP and the Scottish Government of that exchange, and we've seen in some of the early implementation that that works going well, and it's part of our overall assessment that the good early progress has been made, and there continues to be some challenges in there. Perhaps more, I might want to add a bit more detail. Yeah, so as we've set out in the Exhibit 8 in the report, it sets out how they're trying to build all the components of the system and all the integration that will be required between DWP systems. As we set out, there's a number of risks around that. When we were looking at this, we were looking at the joint working and the planning and also the programme plans, and one of the recommendations that we've made is that they continue to review the joint delivery plans with the DWP and also continue to refine where the key decision points are, where things have to be made, so that's obviously some areas to prioritise going forward. You mentioned risks, so there are risks, because the benefits being devolved mean that DWP must provide that data. That's certainly my understanding to the Scottish Government to allow them to be able to deliver the benefits. You said that you're confident that there's enough correspondence and joint working going on, but are you confident that that data sharing will take place in due process? As I said, at the moment, the planning is in place, and that is a critical point, and it's something that will have to be managed, as the Auditor General said earlier, in terms of the DWP. The particular programme is quite small, so making sure that all the stuff that the Scottish Government needs stays up on the DWP's priorities will be critical going forward. At this stage, we're saying that the process is in place, but we continue to say that it will be important to keep that work going forward. I have another question, but I noticed that there's some supplementary questions. Yes, I think that there's a supplementary question from Mr Adam. I was just to continue on the data side of things. You said in your own reports about the fact that there are case management systems in the wave 1 and wave 2 that don't actually talk to one another. Is there a problem with the DWP's computer systems, where there are multiple systems that all the information is carried in various different ways? In fact, one of the benefits, and I can't remember off the top of my head which one, is a manual system. That's quite concerning. When we're talking about safe, secure and timely delivery of the service, where do you think that we're at with the Scottish Government and the Westminster Government? I'll use an example. I was very impressed with the joint working between the Westminster and Scottish Government and the Government and the Justice Committee earlier on this week, when they were talking about the British Transport Police and they were working in tandem. You could see that, but I'm not quite as convinced that that's the scenario we're at at this place with the social security powers. As I say, when we've looked at the implementation of social security through our audit of the Scottish Government, which is all that we can do at the moment, we have seen evidence of good joint working at official level, both on the operational things that need to happen and strategically about where they're going. It's probably worse being clear that the complexity of the programme ramps up very quickly over the next few months as we start delivering the first of the wave 1 benefits and putting in place the foundations for the remainder of the devolved benefits. If you look at the exhibit on page 21, you'll see that actually the wave 1 benefits are quite small in terms of the amount of money involved and the number of people affected compared to the post wave 1 benefits, which will come in after that. As the systems are put in place to deliver all of the benefits, that complexity gets much more complex and the relationships, the amount of work involved between Government and EWP, also ramp up at the same rate. That's one of the reasons why we've recorded the risks that we have in the report about the need for joint working and, for greater clarity, about the timescales and what exactly is required from DWP to the Government or vice versa. What information will the Government need to give DWP to make that work? In your opinion, DWP has never been great with us as an organisation sharing information, whether it be for legal reasons or whether it be for just the way it is. We know that it's very important that this has to happen, but it's awkward for you, because you're looking from a Scottish Government perspective, but how can you see it panning out when it gets to that stage? It is very complex and extremely vulnerable people that we're dealing with as well, so getting this part right has been both sides. From your perspective, how do you see this going over the next couple of years? You're right, it's a difficult question for me to answer because I don't audit DWP and, at the moment, I've got no powers to do that. It's one of the reasons why we're calling for more detailed planning, more clarity about the timescales for the post-wave 1 benefits in particular, and why the focus on getting that working relationship right all the way up and down is so important. You're right, we know that social security systems at a UK level are very complex and have had their problems in the past. They're also going through a lot of change with the roll-out of universal credit and so on, so there are risks there at the moment. I can't say much more than that. What we've seen so far is good joint working and there's risk remain and will become more important as we head towards the bigger pack of post-wave 1 benefits. Can I bring Mr Balfour in? Yes, if I can just carry on in regard to that issue of data and sharing of data. Clearly, from a DWP perspective, they can only provide the data that the Scottish Government wants and, in a way, the Government wants it. Are you confident that the Scottish Government has the experience to be able to make sure that it can answer the right questions so that the DWP can then provide the answers that we want? Obviously, if it's too scattered, DWP will find that difficult to respond to. From your perspective, is there the experience yet within the Scottish Government to know what information that we need to ask for? The overall conclusion of the report is that we've seen good early progress in that planning, but I'll ask Mutt to talk you through the detail of that. One of the things that we do know is that the Scottish Government has set out to work well with the DWP to understand the data that's available, the systems, what they require, how things work, a series of discussions called discovery discussions, which are really to understand what the needs of the systems are, what data needs are. Rather than the Scottish Government on its own involvement, working out what questions to ask, asking them and then getting the data, they're very much plugged in with the DWP in exploring what data is required and how the systems plug in with one another and how they need to plug in with one another. As colleagues have said earlier, much of the detail of that has been around the Wave 1 benefits and part of the reasoning for that, and we think that sound reasoning, is to learn from that process, to learn from those discovery discussions about how to do discovery discussions as much as what comes out around that particular set of benefits and to build on that as they get to the more complicated, more challenging benefits and the vast bulk of expenditure further in the programme and the post-Wave 1 benefits. From what we've seen, the Scottish Government has an approach that allows it to understand that, to engage with the DWP about that and, as colleagues have said, the initial relationships around that are going well, but much of the challenge remains ahead. If that approach continues, that will be part of the solution as the Government goes into those more complicated areas. In your report, you speak about the challenges in ensuring that we have the right people with the right skills to implement the act at a practical level, and you say that 110 staff have already transferred from the Scottish Government into the social security programme and that that may be putting pressure on other directorates. Just like to understand how you keep your eye on that and how you'll ensure that that doesn't become an unmanageable or very worrying risk. I'll start off by putting it in context and then ask Mark to talk about the detail. Obviously, this committee is focusing on social security, but, as I said in my opening remarks, the new Scotland Act to cover a much wider area, the tax-raising powers, the borrowing powers, the whole fiscal framework, and all of those are also requiring new people and new skills. So, we're very alive to the risk of making sure that people are there to do what's needed with the right skills and that it's not sucking out the capacity from people who are delivering business as usual or dealing with things like the UK's withdrawal from the European Union that's all happening at the same time. So, we know it's a big challenge for this programme. I think that Mark can give you more of a sense of what is happening, but also the risks that we think remain in there. Thank you. I think that the way we've reported in this report illustrates our approach, which is that, as well as looking at the detail of individual programmes in this case, social security, we're very mindful of what that overall implications for the Scottish Government as a whole are. As we say in the report, the need for the Scottish Government to continue its work can be much better at some longer term, medium term workforce planning and to build on its work it does to do that. So, we're alert very much to that, and we'll continue through the whole range of our work to report on the big picture, if you like. Within social security itself, colleagues and members will know that the initial recruitment exercises have kicked off and our understanding is that there has been a good response rate to that. The work is going ahead to get the additional people involved to deliver the social security services. As we found when we were looking at the staffing required to get things up and running, particularly around some of the specialist finance and IT areas, that's where there was a bit more competition for staff effectively internally within the Scottish Government. From our social security perspective, we're comfortable that the programme itself has got the people that it needs to get things up and running, recognises a big challenge ahead to go from the relatively small numbers of staff involved at the moment to almost 2,000, ultimately involved in the agency, and that's a long journey ahead. From the programme's perspective, from social security's perspective, we're comfortable that the initial skill sets that they require have managed to secure. Are you aware of any particular challenges in any particular skill sets? Obviously, there are great opportunities here, and those could be seen as very attractive, meaningful, well-paid, secure jobs. Are there any challenges in specific areas? I think that one of the big things in here is that there is a good news story about creation of jobs and around 2,000 new jobs being created as a result of that. That places challenges on local labour markets, and the Government will be competing with others for those people in those labour markets. There will be particular skill sets within those and customer service skills, front and counter skills, where, particularly in Dundee and Glasgow, the Government will need to make sure that it has the offer for those people that it can attract the numbers of staff that it wants in those areas. There will be other employers in those areas on the lookout for those staff. Rather than having any particular concerns about particular skill sets, it's the overall scale of the task that is one of the things that the Government is alert to and needs to be alert to. One of the recommendations in your report is to develop and report more detailed estimates of costs of implementing the powers and regularly review levels of optimum bias. Can you say what the risks are if there were a failure to develop more detailed costs and to regularly review? I think that there are two elements to that that we wanted to draw out in the report. The first is the overall cost of implementing the Scotland Act, where the Government hasn't put together the full costs that it expects to incur in implementing them and how much they exceed the £200 million contribution from the UK Government that we think is important, because there are clearly trade-offs in future budgets between implementing those powers and everything else that is a legitimate call on government. The second is the specific cost of the social security programme itself, where the best cost estimates that are available at the moment are still the £308 million that were in the financial memorandum to the bill. We say in the report that that properly includes quite a significant optimism bias, but as decisions are taken about where to locate the agency, where the premises are, how to go about putting in place the IT systems, the Government should be refining its estimates and releasing the optimism bias as it's not required to make sure that it's a much better picture of what the costs are likely to be and covers more financial years than it is currently possible to see through the two-year budgets that we have at the moment. You said that there is a significant optimism bias in that £308 million figure, so from the work that you have done, would you expect to see that figure come down, or have you been able to adequately identify if that figure is appropriate? We would expect it to come down over time. It is, as I say, entirely proper to have a recommended level of optimism bias in at the beginning, particularly for a system that is dependent on complex IT, as this one is, where we know the challenges of that. However, it is important that, as decisions are made, it is possible to come up with tighter estimates that that optimism bias estimate is released. Mark, do you want to pick up on the detail of that? Dr General says that there is a 200 per cent allowance for optimism bias, so essentially that means that the Government has costed the initial estimate of what IT is likely to cost and multiplied that by three. The guidance allows you to do that because there is a tendency for everybody in private and public sector when they are costing IT systems to be over optimistic, and that is the nature of optimism bias. That approach is in line with what was expected. What we found was that, although initial discussions have taken place about now that we have decided more, now that we know a bit more about some of those early things, that there had not been any formal decisions about moving costs from optimism bias to the actual cost of those new things. Although you would expect the optimism bias to come down over time, one of the reasons for it being there is that it just disappears and it costs a third of the price. As you decide things and you understand more about your systems, then generally costs on the other side of what you understand will grow. The current estimate is £308 million. We are at a very early stage of the process. There are some decisions that have been made that should allow the Government to be a bit clearer about what the actual IT costs are with some more optimism bias still remaining. Our observations in the report are as time goes on, it is really important that the Government is clear about that, and it is really important that the Government is able to refine its estimates of cost and be transparent about those. Finally, to ask, we as a committee and Parliament are interested in the Government reporting on those more detailed estimates and the budget itself. That is one of your recommendations as well, that it should regularly review and report how regularly should we as a committee expect to see Government updates on their optimism bias and cost estimates? The first thing that we would like to see is more detail within the Scottish Government's annual budget about this. We say in paragraph 66 that the costs for implementing social security are included within a much bigger budget line in the Scottish Government's budget for non-tax implementation costs. Social security is not identified separately and we only have the years for 2017-18 and 2018-19 available. I think that as the Government moves towards a longer term approach to its budget with a medium-term financial strategy due for publication quite soon, getting both a longer term view and getting more specific about how much of this social security would be a very good first step. Once that is in place, it is obviously possible to be reporting against that budget in more detail. I think that it is for the committee itself to be clear how frequently it wants that, but I think that the first step would be simply to break down the budget a bit more than we currently have and to roll it out for more years than just the current one that we are now in. Your report states that there is a risk around the case management system that is going to be used for wave 1 benefits, not being able to be used for wave 2. However, your report also states that it is based on a multi-benefit system that delivers complex benefits in other countries. Those two statements feel like they contradict each other a bit. I wonder if you can just reflect and clarify for us. Of course. I think that you are referring to Exhibit 9 where we set out what we see as being the key risk to the delivery of the IT systems. It is important to start off by saying that the list is not things that have gone wrong but things that the Government needs to get right if it is going to be able to achieve its plans. We do say that the initial design of the case management system carries that risk. It is at a very early stage and it is a very small part of what will be a much more complex system delivering a wide range of benefits in two or three years' time compared to the very limited number of benefits in wave 1. We think that because of the way that it is being put together that risk remains. We include in the report on the right-hand column the ways in which the Government is seeking to manage those risks. We recognise that that mitigation is in place but it is my judgment that the risk still remains and it is something that I think the committee would want to keep an eye on and that we will be through our audit work. I want to follow up on the final point that you just made. Clearly, your report is a retrospective that you are looking back and that we are looking at lessons learned. As a committee, we want to make sure that things are happening. If you see an issue that is coming up between Scotland and DWP or around IT or other areas, how quickly do you report on that? Do you wait for the annual report or when you are doing a report? Or if something becomes very obvious very quickly, what mechanism is there for you, as the Auditor General, to report that to Parliament and to the committee so that we are not just doing lessons learned in four or five years' time? That is a very good question, Mr Balfour. The report itself is intended to have both that backward look but also the look forward, which is why we have things like these a bit that sets out the risks that we think need to be managed. The team is engaged with colleagues in the Scottish Government pretty regularly to get a sense of what is changing. After the passing of the bill last week, they have had a session to take stock on what happens next, what the priorities are, and we will continue that. In terms of reporting to Parliament, at the moment, I am in a rhythm of two reports a year. One is this report that happens in about the spring time around the implementation of the Scotland Acts overall, with that look ahead. The second opportunity is my annual report on the Scottish Government's consolidated accounts, which is generally around September of each year. If there were a very significant issue, I would report it in there as well and bring it to Parliament's attention in that way. The aim of this report is to make sure that we are not taken by surprise by something happening because we have that sense of what the risks are and how they are being managed before we get there. A couple of questions related to the answers to the ones that were just previously asked. First, on IT, we have discussed previously in another committee around the principles for a digital future report, particularly on I6 and the policing sub-committee. The report talks about the importance of breaking projects into manageable chunks, and that has been one of the key lessons from previous IT projects. Can I ask how the social security programme is doing in terms of that philosophy and approach and why that is so important in terms of delivery? We say in this report that the social security programme team has really prioritised learning from experience elsewhere. We see some learning from our principles for a digital future report in that. Morag, do you want to pick that up? I think that there are a lot of examples in the way that the social security programme is doing things. As Exhibit 5 shows, it is phasing how it is delivering the benefits, but it is also in the approach that it is taking in using components to make the IT platform up. It is delivering them in interim bits. Within that, it is putting in short-term solutions, whilst it figures out what the strategic solution should be. For example, using the payment system over a five-year period, while it works out the strategic solution. There are lots of elements in which it is phasing things in different ways. That would be a few examples that I could use. The necessity for phasing and the benefits that it provides in terms of an approach to building a new IT infrastructure is reassured by the way things are being taken forward at present? As we say in the report, it is obviously a huge and complex thing that they are trying to do. Obviously, doing the sort of components and phasing all that and taking the sort of interim approach while they work out the strategic approach has risks in itself because there is a lot to manage doing it that way. I think that breaking it down in that way and the planning that we have seen so far, we see that they have prioritised the learning from previous things and put that in place by the approach that they have taken. It will be difficult to manage and that is why we make a number of recommendations around the planning and making sure that there is enough time for the assurance processes, the procurement processes and, obviously, getting the right people in place in time as well. Just as well, related but slightly separate, I was reassuring to read in the report that it says that good early progress is being made on the social security programme and that preparations are on track to deliver with one benefits and the agency. As you said in your opening statement, good early progress is being made. What evidence did you see from the programme that gave you this confidence and that reassurance? I think that what we are looking at is, as I was saying in response to Mr Balfour's question, the things that we would expect to see in place now if the programme is going to have the best chance of success over the next two to five years as the benefits come through. That is things like the governance arrangements that are in place, which we set out in Exhibit 6 and comment on the way that they meet most of the principles of good practice and have been refined as the programme moves on. The extent to which the IT systems are learning from good practice and from experience elsewhere and the things that we see around that, the phased approach that is being taken as more access, that brings more complexity to manage, but we are able to say that the programme management approach is at this stage fit for purpose with an overall Prince II approach, but below that the use of agile project management approaches for the individual elements with things that we do not always see, such as training in the agile approach for the staff involved and agile coach to help them learn as they go. There are some really good examples there and none of that takes away the risks of a big complex project that affects some of the most vulnerable people in Scotland over a short period of time, but it does help to mitigate them and that is why we are able to draw that conclusion about good early progress, while recognising that it has done an awful lot to be done over a short period of time. Is it on this area? Slightly different area, but just a short question, and please excuse me if this sounds slightly semantic, but I just thought it was interesting how you described in the report and again this morning that this is a critical point for the delivery of this new system and these devolved powers. You might be just elaborate on it, because a critical point can be interpreted in different ways. To some it may sound like a high-risk point, others it may sound. To me I interpret it especially after reading the report that what I think you were trying to convey was that this is an important point and this is a point where concentration and analysis is required, rather than that this is a high-risk point, for example. I welcome some clarity. I think what the team and I are trying to convey through the report is that, first of all, as we say, this is a very big and complex programme, one of the biggest that the Governments had to deal with since devolution for very good reasons, that some of the groundworks in place with the social security bill now passed, decisions made about where the new agency will be located, a programme of what the roll-out of the benefits will be. The Government has chosen to go for ambitious timescales for reasons that we all understand, with the first benefit being delivered this summer. The wave 1 benefits due to being placed by summer 2019 and to reach those milestones, there is now a lot to be done in terms of actually getting the agency up and running, getting the IT system in place for the wave 1 benefits, being able to engage with people in receded benefits and the wider community about the way that it works. There is an awful lot that needs to happen over the next 12 to 18 months maximum to hit those timescales. While we think that it is possible, we do think that there are some key things that need to happen in terms of the IT systems, in terms of workforce planning and recruitment and in terms of sharing information, transferring information between the relatively small group of people who have built the expertise already to the much larger number of people who will need to be involved in the future. Mark Cleary wants to add to that. One of the other considerations is all those things that are going on now. Yes, of course, they are critical for delivering wave 1 benefits, but it is really the foundations for everything else that follows as well. The critical point was about both those things, both about delivering the first set of benefits but also getting those foundations in place on which everything else is built. If that goes well, there is a good start available for all that. If the Government runs into problems over the next year, not only will there be potentially delays to those initial benefits—there is no evidence of that at the moment—but that will then raise real question marks about what comes next because of the importance of those key starting points that will be put in place over the next year. You have mentioned that on a number of occasions, and I never really thought of it this way because it is the biggest thing that has happened here since the devolution itself, but you have mentioned on a number of occasions that for the Scottish Government this is a major issue, a major project, a major undertaking. However, for the DWP, it is not such a big undertaking. What are the potential risks for that potential DWP complacency on the whole project? In its list of important things to do, it is not going to be near the top, but for us it is a number one issue. What are the risks of that? It is important for me to be clear that I did not use the word complacency. It is much more about the scale of those benefits for the Scottish Government compared to DWP. As you say, they look very different depending on which end of the telescope you are looking through. I had not even thought about it until you brought it up. The fact that DWP has a situation where it is effectively top of our to-do list to them, it is Mignana effectively. What is the risk with that kind of ideal? We say in the report that there is a risk that the DWP sees this as a small part of the business that it used to deliver and from their perspective it is, whereas for the Scottish Government it is a very major part of the overall programme for government, that is a risk that simply exists. The same risk applies in relation to the new income tax powers with HMRC, which is very big for the Scottish Government, much smaller for HMRC. The only ways that it can be managed are by good relationships between the two Governments from ministerial level down through officials, through as good and clear planning on the Scottish Government's side around what it intends to do when and what it needs. You have heard from Mark about the way that the discovery process has been helping Scottish Government people to understand what the implications might be of different approaches and different requests for data in that case, and then keeping a very clear monitoring through the governance arrangements of the progress that is being made and where there are delays, what the impact is and how they can be dealt with. However, the decision to work with DWP for the next three to five years around some key elements of this brings that interdependency into play, and it needs to be managed by both Governments, I think. Thank you. Are there any further questions, committee? Audisgeneral and officials, thank you very much for your attendance. I am sure that over the coming months, for all the reasons we discussed this morning, coming months and years, we will be seeing you again, but thank you very much for your attendance this morning. I will spend shortly while the witnesses change over. Welcome back. Our next agenda item is panel discussion on the topic of managing the implementation of the Scotland Act 2020. Welcome to committee. Jeane Freeman, Minister for Social Security, Stephen Kerr, director of social security, John Campbell, head of digital risk and security, and James Wallace, head of finance, Scottish Government. Welcome to you all. Minister, would you like to make an opening statement? Thank you very much, convener, and good morning to you and to members. I am grateful to you for the opportunity to be with you to discuss Audit Scotland's recent report on managing the implementation of the Scotland Act, where rightly a key focus was the new social security powers. I want to thank Audit Scotland for the way it worked with my officials over the past few months and continue to do so in the lead-up to the report's publication. It is a relationship that we each value and one that I believe is working well. Before I say much more on that, I want to express again and for the record my thanks to you and to the committee for making the social security Scotland bill even stronger and for your contribution to its unanimous passing last week. Now, of course, our focus rightly turns fully to delivery. As far back as September 2016, when I was with you to outline our approach to delivery and repeatedly since, I have been very clear that fundamental to our delivery approach has been the safe and secure transfer of the 11 benefits to make sure that people get the money that they are entitled to in the right amount on the right day and to the right account. I am reassured that the Audit Scotland report recognises good early progress that we have made on the social security programme. We are where we are expected to be at this point. Our plans for delivery of the first wave of benefits and the establishment of the agency are on track. As I said in my letter to you, convener, I am particularly pleased that Audit Scotland recognises the following key points that the programme has made good early progress and is now at an important point as it moves to deliver its first wave of devolved benefits. Universal Credit Scottish Choices were delivered on time in October 2017. Let me add continue to be successfully delivered as Universal Credit full service rolls out across Scotland. That risk management arrangements are well established, that there has been good on-going engagement with stakeholders, that the programme has demonstrated good practice by revising its governance arrangements to reflect the needs of the programme. The current arrangements will need to be kept under review to ensure that they are well understood by staff and remain effective, that the programme is learning lessons from previous public sector programmes and, for example, investing in agile training for staff at all levels, which is something that I know Audit Scotland has previously highlighted as important, and that the Scottish Government has demonstrated good practice by establishing multidisciplinary teams in line with agile delivery. We have talked about this before in this committee. The structure gives delivery-level staff responsibility to progress the programme, allows quicker decision making and makes it easier to adapt and learn from day-to-day experience. We are following the advice of Audit Scotland to build incrementally in systems, in people and in infrastructure. Our costs will also be responsive to that approach and be refined incrementally. We are working to ensure that we have the resources that we need at the point when we need them, whether that be buildings to avoid unnecessary spend on overheads, staff in the programme or agency allowing us to support proper staff induction and training, to embed the culture of dignity and respect that is essential or in IT, to support a range of benefits being delivered in a phased and controlled way. There is one area where I disagree with the position set out by Audit Scotland in their report, which is in relation to the case management system. We have awarded a contract to IBM, which includes the development of a case management system to deliver the wave 1 benefits. We deliberately procured a multi-benefit system that can handle both the wave 1 benefits and the benefits to be devolved later. That system is used by a number of other countries to deliver a wide range of benefits. I do not believe that the Audit Scotland report captures that as accurately as I would have hoped and suggests that the case management system may only be able to process the wave 1 benefits. I understand that Audit Scotland's job is to identify risks, as indeed is mine, but I think that in this area the evidence that they suggest lies behind their risk is not accurate. I want to reassure the committee that that is not the case. The report also makes it abundantly clear that the Scottish Government cannot deliver devolution of social security powers in isolation, given the reliance on DWP for the safe and secure transition of the benefits. DWP is required to provide the Scottish Government with relevant, robust data and to make significant changes to its systems and processes to ensure an overall joined-up experience for people who will continue to deal with both the Scottish Government and the DWP. We require and continue to seek concrete assurance from the DWP that they have a parallel plan in place to match both the content and the pace of ours. I thank the convener for that opportunity to make those few remarks and I am very happy to take questions. Thank you very much minister. I would like to open with the question that I gave to the Auditor General. It is absolutely understanding how important that relationship is between the Scottish Government officials and the DWP and how much co-operative working is going ahead, but the example that we have of that is the bedroom tax, which is quite unequivocally from yourself. You led it to this committee and from the cabinet secretary's letter to the Secretary of State, a feeling that it was a delay and a disappointment to the Scottish Government, and yet the Secretary of State, when in front of us said she heard a sign that it wasn't, it was a delay and the timescales were hoped for and ambitious. Given that experience, does that give you concerns about how things might progress going forward? If I can quote, when I was here in September 2016, I said, and I'm quoting, in building our system, we will still rely on the DWP making parallel changes to its information technology systems, some of which are decades old. The timetable for that work will partly be driven by the DWP because we will be able to switch on our services only when the DWP has updated its systems. We have always been crystal clear that this has to be a parallel and co-operative operation. I wouldn't want to overstate the difficulties that exist in that. I watched the evidence that the Auditor General gave to the committee earlier this morning, and I think that she captured it rather well when she talked about looking at the same thing through different ends of the telescope. It is absolutely the case. I believe that our respective officials work well together and work continuously. I don't think that I can overstate how often they are in contact with each other across the whole of social security directorate, in finance, in IT, in policy development, in delivery and so on. It is true to say that, at Joint Ministerial Working Group, those relationships are cordial. Nonetheless, it is fair that, while we have the assurances from DWP ministers that this work for them is one of their priorities, it is absolutely my job and our cabinet secretaries to ensure that that is borne out in reality. The bedroom tax example has given us some concern, and our response to that has been to redouble our efforts to ensure that we continue to press that in the list of priorities that DWP has to deliver, not only do we remain high in that list as the commitment that has been given to us says we will, but also that DWP thinks about the impact of anything that it is doing to its own systems as a consequential knock-on effect to what we are doing. There are layers to this that are themselves complex—this whole thing is complex—but there are layers to this that are complex that we need to keep on top of. You have not received it quite yet, but I have written again to you convener to explain a delay in the transfer over of a code that has caused us some delay in the delivery of the contract that we have undertaken with IBM. That will not cause a delay to our current timetable for the delivery of wave 1 benefits, but it is an example of what the DWP does internally and can have a negative knock-on effect to what we are doing. We have to keep pressing on that. I know that the cabinet secretary is very keen that we have greater regularity and timetabled joint ministerial working group discussions, and we will be putting that proposition to Ms McVey. I am going to open to questions and I will go to Mr Griffin. Thank you, convener. One of the recommendations in the Audit Scotland report was to develop and report more detailed estimates of the cost of implementing the social security powers regularly reviewing levels of optimism bias. What is the Scottish Government's response to that recommendation? I think that that is exactly the right recommendation and would be exactly what we intend to do. As I said in my opening remarks and have said repeatedly, if you follow the Audit Scotland advice that we are doing, which is to deliver a large-scale project in manageable chunks—which I know that you touched on earlier with the Auditor General—that means that you build incrementally. Our overall priority, as you know, is the safe and secure transfer of those 11 benefits that affect 1.4 million people. We are taking full responsibility for them, benefit by benefit, which allows us to build the system, the IT system, the agency and so on incrementally. It allows us to build in time to learn lessons from delivering the first benefit and apply it to delivering the next benefit and so on and so forth. You will know that we are working from delivering an initial set of benefits that are more of a one-off nature, working towards the more complex area of benefits, for example disability benefits, which are regular payments with a more complex case management system and assessment evidence process. If you do that incrementally, you will refine and build your costs incrementally. We were right to start where we started at that £308 million figure. It contains the right level of optimism bias, which is advised by the Treasury in the Green Book. As we work through this year, we are building that system incrementally to deliver, first of all, the increase in carers allowance and, then, best start and funeral assistance. I describe it as refining down—James may have a better word for it—as our finance colleague. I describe it as refining down the costs within that £308 million figure, so that we are very specific about what we are spending money on. As the Auditor General said, as you go through that exercise, you begin to release elements of the optimism bias. I will ask James to add anything to that that he wants to. I will perhaps describe the approach that we take in the programme to optimism bias. That might be quite helpful for the committee to hear. As the Audit Scotland report draws out, we use the recommended level of optimism bias per the Treasury's Green Book, so we are following the best practice guide in terms of our approach. It is inevitable, as a result of following an agile delivery method, where we break up our project into manageable stages and manageable chunks that we deliver incrementally. In the early days when we cost out the programme, there are estimates, assumptions and optimism bias in that overall cost envelope. Over time, in the report, the journey that we are on allows us to manage out that optimism bias. We understand what we have delivered, we understand better what we still have to deliver and we understand specifically how we will do that, what we will buy, when we will buy it and how the various parts and components and capabilities within the system will fit together. That allows us to manage out the estimates and assumptions to bring down the level of optimism bias and, at the same time, perhaps have more clarity on precisely what it is going to cost. As I said, that is a journey that we undertake. It will follow the life of the programme. We will generate more clear and definitive estimates of cost or real costs as we come in and manage out the risk. The approach that is at the moment within budgets has been for the financial memorandum to include the recommended 200 per cent optimism bias for IT costs. The Green Book recommends 200 per cent because it has looked across past programmes of a similar scale and size and said that that is generally what people's optimism leads cost overruns to be. We account for it to make sure that there are no cost overruns to make sure that we have got the numbers in there and that this committee and Parliament knew about those numbers up front from the financial memorandum. In terms of annual budgets, the approach that we take at the moment has been to manage out optimism bias entirely for the year. It is always the case that the closer to today an event is, the more we will know. The more definite we can be about costs for 2018-19, for example, than I can be for 2020-21. The benefits that we are delivering today, we know much more about how we are doing than we know for a wave one that is a low-income benefits procurement. We know that IBM is delivering that. We know that as a fixed-price contract of £8.3 million. We know much more about what will future delivery look like for benefits that are much further down the line. We do not have that level of detail yet, so we remain with the estimate. It is a managed process. In my view, it is in line with the green book. It is in line with best practice. It is an inevitable consequence of following an incremental approach to design and build. I will add to that. James is, of course, absolutely correct when he says that for benefits that are further down the line, we do not yet know the same level of detail as we do for the ones that we are about to deliver. Although that is absolutely correct, I do not want the committee to think that we are not doing any about that. All the discovery work, the discussion, the involvement with the experience panels—all that—is under way for all those benefits, but it is at an earlier stage inevitably than the ones that we are about to start delivering from the end of this summer. One of the recommendations that the Auditor General made in our evidence session this morning was that the budget and annual budget for social security should be separated from how it is set out just now as the non-tax implementation. Do the Government plan on doing that and introducing a specific line in the budget and the years ahead purely for social security? That is with respect to a question from Mr Mackay, our finance secretary. I know that James will have something to add about the statement that is due later on and quite shortly, and how Mr Mackay plans to move ahead at this point in terms of the overall additional powers that have come to us through the 2016 Scotland Act. Obviously, I will have discussions with him on that, but that is not a decision for me. I think that, as the minister said, it is a decision for Mr Mackay through the budget process. The approach that we have been taking up to this point is to rely on the financing constitution portfolio in the Scotland Act 2016 non-tax implementation line within the budget. That is a level 4 budget that Audit Scotland rightly pointed out and does not, perhaps, have the level of clarity that would be preferred in the future. The approach up to now has been one that gives us flexibility to not ring-fence money that we may not need in that year to ensure that the Scottish Government is making best use of its finite resources. I think that in the future that is likely to change. I think that that would be advantageous for us to be able to scrutinise the budget and the cost, being attributed to the particular parts that the committee has an interest in. Finally, I will ask about revising the optimism bias downwards as we go on and get closer to delivering. How regularly do you plan to report to the committee that revision of the optimism bias and the overall budget? We should probably use the correct phrase. You used mine, which was not quite right. The phrase that James used is to manage it out, which I suspect is the more accurate one. I will stick to that. It would be fair to say that, as we move through the delivery of the increase in carers allowance towards the end of this summer and then into the detail to be ready to deliver both best start grant and funeral assistance payments towards the end of the year into the spring of next. I think that it would be reasonable that we might be able at that point to come back to you with more detail and begin to show in practice what we are talking about just now. Thank you, convener. Good morning. I would just like to ask a couple of questions about the way that you are implementing the Scotland act. There has been a real welcome focus on the fact that we can do things differently and that those who are engaging with the system feel that they are being treated with dignity and respect. Do you see the Auditor General speaking earlier about challenges around staffing, making sure that we have the right people in the right place with the right skills? Is that issue of dignity and respect being taken through all of those negotiations and discussions? Do you see IT in having the right staff and so on as being central to making sure that people are treated in that way? Thank you for that. I think that it is a really important question. The fact of the matter is that we can collectively be pleased about the legislation that Parliament agreed last week and the content and the spirit of that legislation. The reality is that for 1.4 million people, it will only mean anything when they see it in terms of how they are treated and what they receive from the agency in terms of due respect and the recognition of their right to receive the support that they are entitled to and how the agency deals with them. That is a really important question. I know that Stephen May has some more to add to what I am about to say. There are undoubtedly challenges with respect to certain skillsets. IT is one where there are challenges across all sectors in Scotland about the availability of the right level and quality of digital skills in the workforce and the work that is going on elsewhere on that, but we will be in that competition, if you like, along with everyone else. However, there is another way of looking at the challenge of the level of recruitment of staff that we have before us. We are looking to recruit a total of around 1,500 between Dundee headquarters in Glasgow and around 400 locally-based social security staff. That gives us the opportunity to look afresh at how we conduct recruitment and how we open that up to engage as diverse as possible a workforce, bringing to you a range of experience and skills, but that you can, through your induction, training and continuous staff development, develop further to be the workforce in specifics that you need now and into the future and build that culture. We have taken the opportunity, if you like, of that challenge to engage quite widely with a range of organisations to help us to understand how we can make our recruitment process as open as possible, encouraging people to apply, and how we can work with, if you like, the supply chain of organisations in and around the country, particularly around the Dundee area, not exclusively the city, but around the Dundee area, around Glasgow and the surrounding authorities area, to get people thinking ahead, as we recruit incrementally, to what they might need to do themselves to acquire some of the skills or some of the experience or hone some of what they already have so that they can have a good chance if they apply to us for employment. We are looking not just at what the workforce looks like now, but at the supply chain of organisations that work with people who either want to upskill or want to enter the labour market, perhaps return to the labour market or enter it for the first time, and what we need to do in terms of the kind of employment opportunities that we should be offering in flexible working, part-time working, understanding the demands on carers, for example, and so on and so forth. There are undoubtedly challenges in recruiting the right skillsets in the right place, but, although we are not being dismissive of those challenges, we are also seeing an opportunity here to build in from our recruitment itself the kind of culture that we are looking to deliver that meets the spirit of the bill. I do not know if Stephen MacDonald wants to add a bit more around that. Not much, minister, but, as we are seeing a few things, when we embarked upon this programme and established the directorate, we went about it in quite a different manner. Instead of creating an almost hermetically sealed group of officials working in social security that would then reach out to other parts of governments, we established the directorate that had the core skills built into it from the very beginning. We have dedicated HR professionals, for example, who were in at the very start of this journey, who have put in place quite comprehensive materials on induction, learning and development, training, knowledge, transfer, as and when people move in and around the directorate. We also, for those of you who slightly longer memories published in March 2016, the Government's first substantive paper in social security, which set out the principles that we would follow, one of those being dignity in respect, as you have mentioned. Those principles have been turned internally into values in the directorate across the agency, so diversity has become a really significant theme of activity within the directorate. All of that is done to create the best possible offer to people both in the Scottish Government and elsewhere in the UK Government and from the public and private sectors to come in and work on the devolution of powers and social security. I think that the way we have approached the recruitment in Dundee has been really innovative. We have done some quite different things for the civil service. We are currently sitting with, I think, eight people for every job that we are looking for in Dundee and many more people looking to apply in the future as well. From our point of view, as the most senior leader in the organisation, taking forward social security, the principles around dignity and respect are really key to how we develop the agency and how we develop the skills that people need to deploy in the programme over the next few years. I just add to that. I do not want the committee to think that we have the directorate working away and then we start the agency and there is no particular connection. The thinking that Stephen has described and the practice of how the directorate has been formed and how it works is deliberately determined in order to feed into what the agency will become. We are not going to create the culture in the agency from a standing start. We are creating it in the directorate in order to feed it into the agency. That is the right thing to do, but it is also particularly advantageous in terms of those who are now charged with establishing the agency, finding the property and beginning the recruitment exercise and so on have come through that culture and that approach. That is what they now bring into how the agency itself will expand and grow. We are clarifying on the back of that point that the agency chief executive, for example, continues to be a member of my management team, so even if he wanted to take a different approach, I would not let him. That is really helpful. Thank you very much. That was a comprehensive response and I am grateful. With regard to lessons learned, it is fair to say that universal credit has had a troubled roll-out, so there is a large-scale change. Have you been watching that and learning lessons? I certainly have. One of the first things that I was given, not long after I was appointed, was a piece of work that I cannot recall the author, but it was an analysis of what had happened to universal credit in terms of how it had gone wrong. A large part of that analysis was about the decisions that politicians had taken to speed up the process to set deadlines and timetables that were more about political advantage or defraying political attack than they were about deliverability. I should say that it was Mr Kerr who gave me that article to read, but it stopped with me and it made a significant difference in us being very clear about the need for the planned incremental phased approach and that the most important thing is the safe and secure transfer. So, while I completely understand why many citizens across Scotland would have wished us to have gone quicker as they see it, to go any quicker would have been to risk the delivery. That was a strong lesson. I think that there are other lessons in looking at how universal credit has been rolled out. One of those is not giving the staff charge with the delivery of universal credit time to understand and be trained in delivering one change before you produce another for them. That is why, in our planning, we have not only break points between the delivery of one benefit and the beginnings of delivering another to learn any lessons and to fix any glitches that have appeared in the first one, but that is also time for staff to become confident and familiar in the delivery of one benefit before we ask them to expand their understanding for the delivery of the next one, so that we build in that time, so that people feel confident in what it is that they are doing and how they are handling applications and inquiries and so on and so forth, so that they can then give the best service to the individuals coming to us for support. I just wanted to pick up on some of the points that I also raised with the Auditor General around first of all wave 1 and then IT. It was reassuring that the Auditor General report stated that there had been good early progress of the social security programme and that preparations are on track to deliver the wave 1 benefits and agency. Minister, could you expand on how the Government are ensuring that transition of the safe and secure benefits ahead of wave 1? What do you see as key to continuing good progress in delivering the programme? I think that one of the strongest aspects of our approach to ensure that we get that safe and secure delivery is exactly that following that Audit Scotland advice about manageable chunks, incremental delivery, learning lessons and applying them and so on and so forth. We have had that discussion at the committee before. There continues to be a number of parallel work streams that go on, so we passed the legislation last week. Work goes on in terms of the consultation of the first set of draft regulations that will then obviously be coming before yourselves. We will work together on that exercise benefit by benefit as all of that work comes forward. We are working now to look at the construction of the charter, establishing the commission and all of that. We will be transparent and open with the committee about making sure that we are informed. Behind the scenes, if you like, officials continue to work to ensure that we recruit those staff, the first group of staff that we currently have advertised for, both in terms of the group of staff who will be based in Dundee in the headquarters, the right number to deliver the increase in carers allowance, and then we move on to supplementing that with additional recruitment for best start and funeral assistance. We have recently advertised for the first batch of local delivery staff, 18 posts, where they will be working with one, possibly two authorities, depends on the size of the authority to add flesh to what the model of local delivery will look like. That is continuing. All of that work, and at the same time, of course, colleagues in charge of the IT build and the contract with IBM are working to ensure that the systems are in place for that first wave of benefits, the case management system that is capable of delivering for the first wave of benefits and growing for the subsequent. Alongside all of that is the continuous discussion with DWP to understand, as I believe was said in the previous evidence session, to understand their systems and their processes and therefore what they need to do to give us the data that we need, but equally for them to understand what we need. It is no great secret that some of the DWP's IT systems are old and a number of them need to work at the same time to give us the data that we need. That is one of the major risk factors that we are trying to manage. Everything about this programme has a level of risk. It would be a very foolish minister, indeed, who said that a programme of this scale and size has bits of it that have no risk, every bit of it has risk. Our job is not to pretend that risk does not exist, but to put in place all the elements that we need to mitigate and manage that risk. We are doing that and what we need is, as we have touched on before, greater clarity from the DWP that they are doing a parallel exercise at their end to match ours so that we are all working at the same pace and on the same timetable. Where other pressures come on DWP from their ministers that any changes that they then make as a consequence of that do not either knock us further down their priority list or are not made without thinking through and discussing with us what the consequences might be to a plan that we have in place with them to deliver something like the abolition of the bedroom tax at source. Good morning minister. One of the things that you have said on a number of occasions is that you hope that parallel processes are in place in the DWP. One of the interesting things that the Auditor General brought up today was the fact that, for us, this is the biggest thing since the evolution itself. That is a major issue. I had not thought about it until she expressed it today because we are all excited about delivering these powers, but to the DWP this is not top of their to-do list. When you are talking about the parallel process of the DWP, how do you feel going on forward? I know that you are chanting at the door to say that this is the most important thing, but how do you feel things are going on at the other side? You know that it is multiple platforms that they keep information on. How do you say that, if it is not their top priority, how do you see things progressing at this stage, apart from continually battering down their door? I would not want us to think that there was no progress because there is undoubted progress all the time with the DWP. I thought that the Auditor General's description of the situation was a very helpful one when she talked about people looking at the same thing through different ends of the telescope. I think that that is probably very accurate. I understand if you are the Department of Work and Pensions, it is a very large department up until now. Everything that you have done has been about the UK as a whole, all the nations and regions in that. You now have to start thinking about a significant part of that—it is very significant from our point of view—in the grand scheme of things for the DWP. It is a relatively small number of benefits, but you have to start thinking about that being delivered by a Government that you do not work to and that you are now dealing with a set of new officials who have their priorities and their direction of travel set by that different Government and now, indeed, set by legislation from this Parliament. You have to think about how that works and how you manage that. I think that there is a lot of learning that needs to happen, not only the learning that we are doing in understanding the DWP system, but there needs to be a bit of parallel learning at the other end about what devolution is about and what it means when you have a Scottish Government and a UK Government to try and work together. However, there are powers in that place and decisions that are made in that place, and therefore you need to find a way of accommodating and working with that in the same way as we need to find a way of accommodating and working with the fact that we have some of the benefits transferred to us, but not all of them. Our system has to be able to work with theirs, equally theirs has to work with ours. It is not as straightforward as just lifting up a power and going, there you go, you do it now. There are consequential changes to their internal IT systems and so on that are essential in order to allow us to do what we need to do. There are transfers of data that are critical for us to be able to continue to pay, simply to know who we pay, which bank account, what is the national insurance number, making sure that that data can be pulled out for Scotland, for example, as opposed to a UK department that deals with the whole of the UK and does not have to, has not had to up until now distinguish that part of its number of people that it is working for who are based in Scotland, who live in Scotland compared to living somewhere else, is a new thing to do. I completely understand the challenge that we present to them and the complexity at their end, but I do not doubt that successive Secretary of State, I think that we are now on our fifth, has given us the same assurance, and I do not doubt that for one minute that that is genuine, but what I need is that assurance to now be demonstrated in practice in concrete terms, which is why the cabinet secretary wrote in the terms that she did around the bedroom tax. For citizens in Scotland, we will continue to mitigate the bedroom tax, but what we want to be able to do is streamline that process so that the individuals have the same person-centred experience on the bedroom tax as we intend them to have on their living benefits. For the individuals currently in Scotland for whom the bedroom tax is mitigated, they will not be financially disadvantaged by that delay, but it is indicative of one of the areas that we need to pick up and raise at a higher level with the DWP Secretary of State. You need to think through consequential changes to systems that you want to introduce for the rest of the UK that you need to have conversations with us to look at how those can be mitigated and not delay what we are trying to do. I understand that it is about £47 million to mitigate the bedroom tax every year, so that will impact on the 18-19 budget in that we were expecting to have that money for your sales where? Well, no. The money that we currently spend to mitigate the bedroom tax will be money that will be, instead of being disbursed the way it is currently disbursed, it will be paid to the DWP to compensate them because they will abolish bedroom tax at source inside universal credit, but what that means is that we pay them for what they perceive to be a loss. That is the great clarification. Thank you for that minister. Last week at the work and pensions committee, Kip Malt House described the important issue of split payments and ending payments to the one householder as a bit of a political symbol. He said that he felt that it was a sideshow. I am sure that he will share my dismay at that at his lack of knowledge about the impact of financial coercion on victims of domestic abuse. However, there was something else that he said that I found quite troubling, and I will quote him directly if I may. That is him talking about splitting the payments at source. If the Scots decide to introduce that, if they can work their way through the complexities and introduce it and it works well, we can certainly have a look at it. I would be interested to hear your reflection on that. It appears to me from that comment that Mr Malt House does not understand that it is the DWP that would need to take action to end this at source and to ultimately make things better for women survivors of domestic abuse. I found Mr Malt House's comments about split payments in universal credit as a sideshow. I found that deeply disappointing. That is probably the kindest description that I can have about how I felt about that. I think that potentially for many of those for whom this is a very important matter and could make a significant difference to them, it is positively offensive to not understand why this is critical and important. In terms of the notion that if we Scots want to try it out and see if it works, and they might look at it, that is a significant failure to understand. That is something that has to happen inside universal credit. Therefore, for us to do what we want to do, what we are now legislatively committed to doing, it has to be delivered by the DWP. I would wish it were otherwise because we could be more assured that we would be able to do that, but universal credit is a reserved benefit. Split payments within universal credit has to be delivered by the Government and the agency operating to that Government, the DWP. We need to negotiate with the DWP how it can be delivered for those living in Scottish postcodes. That is, as we have discussed before, a process of iterative negotiation. As anything like that is, where the DWP is the deliverer—they and only they hold the delivery lanes—we need to negotiate with them. First of all, on the technical requirements to do that, where they might start at an end and say that this is exceptionally complicated and cannot be done, we start at the other end and say that it can. Those iterative discussions, in a sense that Auditor General was referring to, it was her colleague who talked about the discovery phase. That is essentially what that is, where we respectively go through our understanding based on expertise in both areas—both the Scottish Government and the DWP—about technically what needs to be done with the existing infrastructure system to do that, to get to a point where we agree what needs to be done, and then we need to begin the iterative negotiation about how much DWP believes that will cost them that we should pay. That is exactly what we have done so far in terms of the Scottish choices on universal credit, the two that we have been able to deliver. We have gone through that process with them and continue to do that on split payments. Undoubtedly, it is just self-evident that it would be significantly more straightforward if the UK Government agreed that split payments was something that they would want to do for universal credit as a whole, because then that would work for women and others in Scotland. Until they reach that view, we need to continue with our discussions and negotiations with them, first of all, on what needs to be done to make it happen, and secondly, what is the charge? I believe that they are taking this issue seriously. There is a difference between how politicians might view the issue and how officials engage with us on effectively what is the devolution programme for the benefits. We have talked that through in terms of how officials engage with us. They engage positively and co-operatively, but their politicians might take a different view on what are priorities in that. Clearly, that is Mr Molhouse's view. It may not be the Secretary of State's view, but I do not know. However, so far, the UK Government has shown no inclination to introduce default split payments. We have always had a very clear commitment as a Government to do that as the third of the universal credit flexibilities that we have power over, but we need the DWP to deliver it. To the panel, I have two questions—one to the minister and one to Mr Kerr. I was interested in your four-way remark that the chief executive of the agency still seats in your management team and if he steps out or she steps out of line, you would bring them back in. I am sure that Mr Johnson was talking about what we would all agree on. However, I am interested in going forward. How do you see the relationship between the traditional service and the new agency working? What degree of latitude will the new chief executive of the agency have to come up with policies that they believe work for the agency rather than necessarily being fed by any Government of whichever colour? David Kerr heads up a division in the directorate at the moment. The agency has not yet formally established and that will happen later this year. At that time, I become what is called a Fraser figure in terms of the relationship with David. I look on from afar dispensing wisdom and making sure that the agency is delivering to its corporate plan, which is approved and discussed by ministers. There is, as you probably know, between executive agencies in the Scottish Government and ministers, a framework document that sets out the roles and responsibilities quite clearly in terms of what David and his team and people in the agency will be delivering over the next few years as well. I will also be conducting his performance appraisal and there are all sorts of informal checks and balances in place that happen in those relationships. The other point to make the committee aware of is that the people working in the agency remain Scottish Government civil servants. It is not a non-departmental public body that is separated from Government. It is essentially part of Government in the way that the division that David heads up is now. Okay, thank you. That's a helpful clarification. Minister, if I could just ask you a quick question. One of the questions that I think I asked the earlier panel was in regard to how, as a committee, how as a parliament, we are aware, if things do start to maybe go off track or delayed, either for whatever reason. Clearly, three years today, we will all be facing the electorate if we choose to re-stand again. I am presuming that the commitment from the Scottish Government is that all the benefits will be up and running by that period of time. What mechanism do you see that we as a committee can make sure that we don't end up in a situation that three or four months out suddenly you have to come and say, oh, by the way, it's all gone and we're not going to deliver X, Y or Z. For example, my understanding, and I think my colleague M, and I'm talking to her this last week, that we still haven't seen the minutes of the last meeting between the ministers. I'm just wondering, will they be available and when will they be available? Secondly, how often without overburdening in you or your officers will you be reporting to the committee so that, if there are flags waving within your department, those will become to the committee? Well, thank you for that timely reminder, Mr Balfour, that three years today will be the next Holyrood elections that does concentrate everyone's mind, I'm sure. First of all, I should say that it is entirely for the committee to decide how often it wants me to come and report to it. That's in your hands, and I would always respond positively to those requests. I think that what we've demonstrated so far is an absolute desire to be as open and transparent as we can be about what progress we're making and where there are difficult issues that need to be discussed. I give my absolute commitment to continue to do that. I think that there are kind of almost like given milestones on the journey where it would be legitimate for the committee to expect me to at least provide you with a written update and for you to then determine if you wanted to see me. The obvious one of that, I should think, the most immediate one, has two things in it. First of all, that we do successfully deliver the increase in carers allowance supplement and that the agency is then formally up and running. It may be indeed that you would welcome an invitation to visit the agency headquarters and hear from Mr Wallace and his team and so on about what they're doing and how they're progressing. Mr McClintock, again, is our chief digital officer about some of that important IT infrastructure work and we will happily extend that invitation to you. I am quite happy if the committee would find helpful not only to extend that invitation to you but to give some thought to where I think there are key milestones where I should be helpfully providing you with an update on our progress as well as, for you to determine if you think those are right or not, as well as advising you as we go on our progress in terms of the charter, which of course is going to be agreed by the Parliament, so it should be coming back to you so that Parliament can benefit from this committee's views on the content of that charter. I think that I already made a commitment in terms of the independent commission that I would want a discussion or views from this committee about the skillset and experience that you think it would be desirable to have before we go ahead and establish that commission, so we'll progress all of that. On the point of the minutes, they are currently with the UK Government to agree. The cabinet secretary, as I have said, has made clear that she wishes to have and she will put that proposition to the secretary of state that we should now have a year's worth of dates set in the diary, so quarterly meetings set in the diary, so that we then all work our diaries around and don't get into the girdle that you can get when you're trying to get a range of busy people to one place at one time. If we can agree that and agree those dates, you will know when they are. We are very conscious of the time that it can take and has taken for finalised agreed minutes to appear and for you to have sight of those. We'll have a discussion with the secretary of state and her colleagues about how we might speed that process up. That may be that we shift the nature of the minutes from verbatim to clear agreements and actions and so on with some context. Verbatim minutes always produce a bit of chewing and froing about the use of that word as opposed to that other word, but we need to have that discussion with our counterparts in the UK Government so that we can reach agreement. It is a joint ministerial, but we're very conscious of that and we're looking to see what we might do to improve that situation. I thank you for your kind words about the social security bill, but I think that our discussion today is focused on what you said in the chamber that day, that the hard work starts now and we've got a lot of it ahead of us. I thank you very much for your attendance at committee tomorrow today. We will be discussing a work programme going forward and I'm sure the committee will be interested in taking up those offers to visit the agency and to work with you going forward. I thank you very much and to your officials.