 Felly, wrth gwrs, wrth gwrs, hi i ddweud miadau gwaith o'r Moron Pwyllwy pubredigiau y 2015. Rwy'n rwy'n mynd i ddim yn dymu i ei dd geographyr o'r Moron Pwyllfa a'r byd i fyddenidiaeth i ddwydiad yma yn erbyn maes syl永sgraffon. Agen dda i gymhwylltyn y Mae Gwnt answers y bydd y Labour Gwnt, ac mae'n ddwydiant sefydlu gydig i gyda ni ddwydiant i gyda ni, ac mae'n cynghi i ddwydo i gyda ni We are taking evidence in regard to that and proposals for the devolution of further welfare powers. Our witnesses today are Mike O'Donnell, head of partnership at Skills Development Scotland, Judith Bartherson, welfare rights coordinator at the Child Poverty Action Group in Scotland, Fiona Collie, who is the policy and public affairs manager at Carers Scotland, and Pamela Smith, who is the deputy chair of the Scottish Local Authorities Economic Development Network. Welcome to you all, and thank you very much for coming along and helping us with our deliberations this morning. I just want to open with a very general question to try to get the scene set if we could do that. Obviously, a significant bit of the Scotland bill covers the welfare area that you are all involved in, and you will have some expertise in. Do you foresee any practical challenges of delivering the new powers, especially in terms of how the devolved benefits interact with those that remain reserved, and how the new benefits system in Scotland fits in with the tax-raising powers or the tax credit framework? I do not know who would like to kick that off that very general question. We are all looking down, so I will pick on somebody. From a Skills Development Scotland perspective, what we are currently doing is looking at the current cohort of programmes that we deliver across Scotland to ensure that there is a good fit with universal credit, which has been rolled out, as you know, at the current time. Just what we have identified is, particularly with regard to the employability fund, the proposed restriction that the UK Government would place on training at last for more than eight weeks. We also know that the Government has allowed a period until April 2016 for that to be relaxed in a Scottish context. However, SDS has been working with the Scottish Government and with the DWP in Scotland, and we have asked the UK Government to respond to some questions that we have about how it would fit with the employability fund. For example, the employability fund in Scotland delivers across the skills and employability pipeline at stages 2 to stage 4. That each stage is considered to be a separate episode of training. A question that we are asking is, will DWP, in the roll-out of universal credit, also deal with it that way so that it would be eight weeks for each episode of training rather than collectively as people make a transition from stage 2 to stage 3 to stage 4? The other thing that it talks about is basic skills. For the definition, what are basic skills? What DWP are also saying is that there may be some relaxation around basic skills in eight weeks, but for basic skills there may be more time allowed for that, and we are waiting for a definition on that. Those are some other questions that we have asked the DWP and the UK Government to clarify for us. That is helpful. That is mainly the areas of clarity that you are looking for. Yes. I think that there are considerable delivery challenges. I think that, generally speaking, we already know that the current system has a lot of areas that cause problems for claimants, and the evidence for that is a very strong link with food bank use, a link to errors and delays in the administration of benefits. Together with that, our CPG's own early warning system, which gathers evidence of impacts of welfare reforms on claimants, shows a very high incidence of error in the system. Something like 40 per cent of our cases gathered through the early warning system are about error and delay. Obviously, there is a lot already known about problems in the system, which gives us an opportunity to address those very early on when new benefits are being developed. It is certainly not necessary that those problems are brought into the new system. As the structure of the benefits system is actually developed, it can be developed in a more simple and straightforward way. The more complexity there is, the more room there is for clashes and jagged edges in the system that impact on claimants. There is an opportunity to make sure that the delivery systems offer a streamlined, seamless journey for claimants. We suggest that, in designing that, Scottish Government puts at the heart, those vulnerable claimants that so often are at the sharp edge of those problems. Alongside that, there is also a particular opportunity to alleviate child poverty, particularly with regard to the welfare cuts in the new tranche of welfare cuts. There are opportunities in the Scotland bill to top up reserved benefits and to create new benefits to help claimants to manage those cuts. I am going to say about some specifics about carers allowance and new carers benefit. I do not think that we underestimate the scale of the challenge that is going to face the Scottish Government and, indeed, the reserved benefits system. However, there are some questions that we will need answers to, particularly in order to be able to start reassuring carers about what the system is going to look like in the future. First and foremost is the issue of clawback. If the Scottish Government of the Scottish Parliament were to choose to increase carers allowance, would that simply then be removed off of universal credit income support or pension credit? Secondly, there are some issues around whether the new benefit would be considered to be an overlapping benefit. That has considerable implications about what that might look like. If there is a decision that it is not an overlapping benefit, i.e. not an earnings replacement benefit, then we are looking at potentially being eligible in the future pensioners. There is a strong vocal number of carers who say that it is not fair that carers allowance stops when they reach state pension age. If the overlapping benefit rule is not there, we need to look at what the financial implications are as well as the practical and moral case for carers who are over 65 to retain carers allowance. There is also a question around the carers credit and the credit to national insurance from any new benefit that was created. It is important to ensure that carers retain that national insurance credit because carers allowance may be their only income and enable them to ensure that they can have at least a reasonable pension when they retire on the backdrop that they have lost significant amounts of income through not being able to work or having to reduce their hours. We want to be very clear that that national insurance credit will continue. I would like to set a context around the welfare and reform and local governance interests and, in particular, our interests around the conditionality and sanctions and the employability agenda. Last year, local government supported 25,000 unemployed job seekers into employment and 67,000 vulnerable individuals participating in employability programmes. Picking up what Mike has said earlier, the conditionality and sanctions regime, there will certainly be jagged edges because the question is to what degree Scottish Government will have the freedom and flexibility to redesign programmes such as a work programme and a work choice if the condition is dictated by DWP in terms of participation by hours, by weeks and by content. We are developing and designing employability programmes to meet a sanctions and conditionality regime as opposed to meeting the needs of individuals, particularly the more vulnerable individuals, who may be disallowed from participating in activity that will help their confidence motivation, particularly those with disabilities, those with additional support needs and those ex-offenders. People who traditionally the work programme has failed in terms of 68 per cent of those completing the work programme remain unemployed at the end of it. If the Scottish Government is going to revamp and redesign a programme that at least supports more than half of those people who participate in employment, the freedom and flexibility to do that is going to be impaired by the conditionality and sanctions because the money in the programme, the legislative framework, will come with so many conditions. It is almost a poison chalice for the Scottish Government and for local government because we also fund our local programmes. We have our European social fund employability pipeline money and the participation conditions will be the same whether it is a Scottish Government, SDS, administered or funded programme or whether it is a local government. The other thing that I would like to highlight is that our interests in employability is because of the relationship with poverty and inequality and the wellbeing of our community. We know that people who are in well-paid sustainable employment are healthier and those communities are healthier and more prosperous. There is an issue also around people in work. We know that children living in poverty, there is a working adult in the household, the majority of children now living in poverty and the conditionality and sanctions regime will also apply to those in work who rely on working tax credit or in work benefit. Again, they will be encouraged to take lower contracts, contracts that might not meet their personal and financial needs or again face sanctions. There is an issue for Government, Scottish Government and local government. How do we deliver in-work support to enable people to up their skills levels and to enable them to improve their earnings potential and to increase their hours as well? There are a lot of jagged entries around the conditionality and the sanctions and how we actually lift people out of poverty and how we improve and connect with a whole fair work agenda. There is also a question around how the Government gets more policy coherence. If we have policies around the Scottish Business Pledge and using a number of instruments to implement social policy, how are we going to be able to do that? A further example of reserved matters, maybe not strictly linked to welfare, but it is another example, the apprenticeship levy at the minute, which is out for consultation, where the UK Government, because of pay-away-e, is reserved, will levy an apprenticeship amount on large employers of £250 or more. At the minute, we have no guarantee that any of that money will come back to Scotland for training, because apprenticeships and training do not involve matter. Local government and public bodies will also be subject to that levy. Again, there is another issue where we have training and skills devolved, but national levy through HMRC applied on the pay-away-e of large employers. There is a whole load of issues for us where there are jagged entries and how we can achieve our aspirations and ambitions alongside powers that are reserved at Westminster. I have a couple of people who want to ask supplementaries, Rob, before I come back to Carers, and specifically by that point you make there about the national insurance contribution towards apprenticeship schemes, that issue will become more relevant as we get through to the Scottish Government budget process, because if I understand it correctly, between the costs of the national insurance and the pension contribution to help support that training activity, it is now amounting to something like £300 million will have to be paid out to the Scottish public services back to the Treasury. Do you think that in those circumstances there is an argument that says that Scotland should keep that money to reinvest ourselves back into training? Given that apprenticeships and skills has devolved, there is no guarantee that that money is coming out of the public sector and the large businesses. Again, we do not know the detail of how it is going to be levied on the large businesses, but at the minute the Government through SDS pay a contribution to the training costs. Now, when money is getting tighter, businesses may fail to invest if they think that they are already paying twice. We already have the construction industry and construction skills where there is a levy and the engineering sector where there is a levy. Again, how will that rub alongside that and how will the local authorities be able to, as well as the public sector, invest in our workforce of the future? If we have a double whammy, if it is coming off, it can be 0.5 or 1 per cent. We do not know the value yet, either. If it comes back to the Scottish Government in block grant, is it part of a lower settlement overall? Is it ring fence for skills development? There are so many unknown variables at the minute. The consultation only closed on 2 October. I am sure that the Scottish Government, such as others, has made those representations. Can I understand from the panel whether others are aware of the issue? What consultation and interaction have we had with the UK Government in particular? Have you written to the UK Government about it? Is the family of your organisation done that? We have, because that has written. As far as I am aware, the Scottish Government has made representations through Rosanna Cunningham's office, and I believe that SDS is also looking at the issue as well. Can we get a copy of that, if that is possible, to show that we can understand the work? We are interested in doing stuff around the fiscal framework. As the fiscal framework develops, it will be important that we nail down those issues to ensure that the Scottish position is as fair as it can be, and we are doing no harm to Scotland in agreeing that fiscal framework. That would be helpful. The SDS's response is via discussions with the Scottish Government on that. We are having dialogue, but it has been through the Scottish Government. The other thing to say is that anything that supports employers to take on modern apprentices is something that we are trying to support. We have also got a Government to ask at the present time to look at increasing the number of apprenticeships that we deliver across Scotland from £25,000 to £30,000. Any levy that is put on employers makes it more difficult for us to engage with employers. I hope that they will come forward and offer apprenticeship opportunities. It was generally about some of the things that were said, convener. Thank you for turning into presentations and the post-answers, which were really interesting. I think that you said that you set my train of thought as a new benefit system developer. Can it be structured in a better way? I am paraphrasing you here. That brought me back to concerns that I had when I sat on the welfare reform committee. It seemed to me that there was a bit of an expectation beyond what we are actually studying at the moment in terms of the clauses of the Scotland Bill that are in front of us and what we will be able to do. That brings me on to the issues of top-ups, sanctions and how we deal with that. We have already talked about national insurance and pension changes that may take money out of the Scottish budget. Of course, we now have people who are going to be suffering from the tax credit regime changing. My concern is that there is a bit of an expectation that everything that happens can be sorted once the Scotland Bill has gone through. I would just like your views on that. I am very well talking about jagged edges. My concern is that there is a lot more going on than jagged edges. While we are talking about some of the small things that can be ironed out, there is a really big issue there, which is lack of money in Scotland. I suppose that there is the technical issue about what the powers are in the bill, and then there is a separate issue about how much money there is available to use those powers in a way that helps to alleviate poverty and stops more families falling into poverty. On the legal powers, the bill is currently drafted. It allows top-up of reserved benefits. It is not clear at the moment if that allows top-up of tax credits. Neither is it clear if there is an extra test of need for a financial assessment to be applied individually or whether that can be decided by eligibility rules for a whole group nationally. There are uncertainties there. If there are amendments in the pipeline, and there is some suggestion recently in the Scotsman article that there might well be, then amendments that make it clear that the Scottish Government would have the power to top up tax credits as well as reserved benefits and could do that via nationally set entitlement conditions would be a welcome clarification. On how to use that power, although that might not have formed part of the original discussion about powers that were to be devolved, I think that the question to be asked is what would happen if Scotland did not use those powers to top up tax credits and benefits. We know that what will happen is that there is a forecast that many more children and families will fall into poverty over the next few years, with all the associated impacts that come along with that on health education and prospects. I would suggest that it is feasible, both legally and practically, to use the power to top up, for example, children's benefits, child benefits, child tax credit and universal credit child element, which is the equivalent of child tax credit. That could be done to alleviate a number of things, primarily the fees and benefits. That is one of the main drivers of the increase in poverty. In the past five years, a family of two would have lost £900. I think that what I am trying to get at, Judith, is that the theory is fine. I do not think that you will find envy here that would disagree with the wish to do that, but what concerns me is how does a Scottish Government get the funds to actually do those things? It is all very well having the power, but, as you said at the start, if you do not have the funds to back up that power, how do you do it? You look at raising taxes while that goes across all the bands. You are then into the jagged edge of raising tax on the lowest paid as well, perhaps. You are then into the benefit cap, and there are lots of jagged edges around the benefit cap. There is the issue of giving one hand and taking away with the other. My concern is that the possibility that we are creating expectations with people is that it will be okay once the Scotland Bill has passed, but the reality is that we cannot say to people that it will be okay. Please do not worry about that. You make a reasonable point. There is expectation, but I am not necessarily sure that the expectation is that there will suddenly be a huge amount of money that will be able to solve everything. I think that some of the expectation is about a different way of dealing with people, a different way of treating people, a different way of delivering a system. I think that there has been a lot of conversations, particularly in the welfare reform committee and in the wider civic society, about what that might look like and about treating people with dignity. It is also trying to make it much easier for people to claim not just benefits but to access the other services that are available to support them. Although we might not be able to create more money, what we can do is to change the way that people experience the benefit of that system, but we can also change the way that people experience our public services and how they experience access to social care and to arrange their services, just to try to make that easier for them. Are those discussions on going with both Governments and the sector? Yes, they are. I guess that to sum that up before I come to Tavish, it might be feasible. The question is are top-ups affordable, but there might be some redesign issues that we can do to make it easier in the journey for people, even though it might not be affordable, as effective as we are. Thank you. On your earlier point about the training levy that was raised, it strikes me that that is not just a fiscal framework issue, but a constitutional issue, because you cannot have a levy on something that is devolved and then not have that money spent in Scotland. You raised some interesting questions about the sanctions and conditionality regime, and it is incompatibility with programmes at SDS and others that are taking forward in Scotland. A, any Government has to have some kind of sanctions and conditionality regime, because for all the reasons that we could obviously understand. That is A, and B, if I absolutely take your point, there is going to be a basic and potential inconsistency between a regime that is designed for programmes happening south of the border and, for that matter, Wales and Northern Ireland as well, so Northern Ireland is a different issue altogether, as opposed to Scotland. Your contention would presumably be that we should seek to have some ability to talk through that at ministerial level, Government level, to try to deal with that basic inconsistency. There should be conditions for any public sector support. It is how those conditions arrive and how they are enforced. The risk and the danger that we see is that programmes are designed to meet unrealistic conditionality regimes and the punitive measures of sanctions. We have to look at what is on offer and how we are assessing the needs of individuals and what support is put in place to meet those needs. We have to have arbitrary figures like you must apply for an excellent number of jobs. If you do not have the basic and core skills and if you could not compete and sustain a job, then that is an unrealistic action planning target for a jobseeker who may well have other barriers to employment. It is how we re-engineer our support to individuals and come back to how we join up some of the policy areas. If we take ex-offenders, for example, 30 per cent of their community service order can be dispensed on employability. They can spend 30 per cent of their community service hours looking at increasing their core skills, etc. To some degree, that is an element of my nation, but it is a carrot and stick effect. One way to stop and re-offend is to get people into work. Most people who are unemployed want a job, but they do not know how to go about getting a job. Those who have multiple barriers are usually excluded and exclude themselves for fear of sanctions, fear of exposure, fear of putting their head above the part of it and then they will be pulled in. It is how we engage with people that were said earlier, how we are looking to meet their needs and how we join up different things that we do have control over as well. A lot of our vulnerable jobseekers will be in receipt of other services. The money and the austerity might have an impact on employability provisions. There are other monies that are being directed at those individuals that we can look at packaging differently. Someone who is receiving tenancy support is equally having to up their core skills, their literacy, communication, IT, etc. We can look at how we get multiple objectives met from the one public pound instead of continuing to operate services and silos. I think that our call is to have a much more integrated and aligned approach to individuals as opposed to just dealing with whatever badge they are presenting on that day, i.e. they are a jobseeker, they are a care leaver, they are an ex-offender, they are a young carer to actually look at the person in the round and look at our public services in the round and how we can actually better align them to get a better return on investment. It does not always mean more money, it means that we have to have a re-engineered or a redesigned approach. I take that absolutely. Any conditionality and sanctions system, at the very least, would need to have some ability to recognise the conditions of the individual that that sanctions regime is being applied to, as opposed to what I get at the moment, which is a very broad brush. Wallop, you do not take that box, that is you. I think that we need the flexibility to be able to meet individuals identified needs not just the conditions of receiving benefit. That has to be at the heart of any service of moving people from welfare into work, but also when they are in work employers also have a role to play. That begs the question and that coherence breaking out the silos, making sure that we have a more joined-up approach. The access to work programme of this is not part of the devolved package, but very much part of the area that we are talking about. Do you think that it would have been helpful if that access to work area had also been devolved to bring that more coherent approach? I think that all programmes that are aimed at assisting people to enter and sustain employment should be devolved so that they can then be integrated as a full package, along with the other monies that are in the system. Mike? It is just to actually build on Mike's point. I think that there is an opportunity in Scotland just now. Scottish Government will be closing a three-month consultation tomorrow around employability services in Scotland. The heart of the ask, if you like, for government is about how do we take a more individualised approach to employability in Scotland, so putting the individual at the centre of the intervention. I think that this is not just about the devolution, if you like, of the work programme and work choice. It is an opportunity to engineer the employability service that has been running in Scotland for about seven or eight years, if you like, in the current format and look at how do we take the new powers and the new resources that we have got and have a much clearer landscape. If you like, at the present time, I think that it is fair to say that the landscape currently is a bit messy. There is this oil and water mix, if you like, between devolved and reserved, and it does not serve the customer, the young person or the individual well, in terms of trying to pull that together. I agree with Pamela's point about the more that we get devolved in terms of welfare and employability-related services, the better fit we can get in a Scottish context in terms of taking it forward into the next phase. Judith, you are a comment to make, then. I will come to Duncan. Yes, two points, please, if I may. One is that there is a crying need for more research in the area of conditionality and the impacts on claimants. There just is not sufficient, so it is taken as a given that conditionality and sanctions are the effective tool to help people into work. That might be so, but the evidence is just simply in place. Given that, as Pamela says, conditionality is not just something that is applied through DWP but much more widely than that in already devolved services, it is particularly important to make sure that we do manage to integrate those programmes. Secondly, in terms of the new devolved powers, which are more narrow, the work programme in particular, although the powers over sanctions and conditionality are not being devolved, so somebody who is referred to the work programme by a job centre, if they do not attend, could be liable for a sanction. Once they engage and are within that two-year or whatever it may be period of the work programme, the powers are devolved to decide what arrangements they should be and how heavy or how light the conditionality is applied. The guidance at the moment, which is set by DWP to work programme providers, tells them how to apply that. It tells them, for example, to pay particular attention to people with mental health and learning difficulties if they are on ESA. It makes no similar suggestion that they safeguard those vulnerable JSA claimants. There is no reason why a devolved work programme could not put those similar safeguards for JSA claimants and apply a much more thought-out approach that protects those people. I do not think why that conditionality could not simply be switched off for ESA claimants, who, after all, are not, by definition, ready to go into work. They are simply ready to look at their health condition in relation to potential work and to take certain steps towards being more job-ready. I think that there is a lot that can be done to ameliorate sanctions and the effects of those on the most vulnerable. I am going back the way again. I am sorry, but I think that the question was raised earlier on Linda's question about how the new benefits system in Scotland would fit in with tax-raising powers or tax credit framework. We have had, from the Deputy First Minister, a position in which he does not rule out tax increases in a recent finance committee. The STEC made a very strong case that future tax rises would be necessary to tackle inequality. If we could have some comment on that, I am sure that you will have different views about how we could tackle what we would use that money for and how best we could tackle inequalities. If you have any views on that, I would be quite interested in those as well. I am a technician. My background is welfare rights, so what I know most about is how the tax credit system works rather than how the tax system works. Is tax credit a tax, or is it a benefit? It is a good question. It is not a tax, so it could be absolutely clear about that. It is not connected with the income tax system at all. There is not a simple definition of what is a benefit, but a tax credit is more akin to being a benefit than anything else. It is just not because it is delivered by HMRC. I did not interrupt, but since she mentioned it earlier, it has been going round my head which one was it, but it is not clear. I am not an expert in taxing all those high-level economic things. To state the obvious, our benefit system is paid for through taxation, and that is the mechanism that we use to tackle those inequalities. There is a good argument that that is the mechanism that Scotland could use for its new powers over tax to look at how income across citizens can be better shared. We have good mechanisms through benefits and tax credits to make sure that people in lower-income bands get a better share of the national cake. Would that not be more appropriate in the circumstances of the basket of taxes to Scotland that is much wider? The risk-reward balance becomes much more easy to manage. Beyond the powers that are coming in a couple of years' time, it is not my area. I am afraid that I do not think that I have got the analysis to comment. I am coming at it from a slightly different perspective in terms of looking at the whole preventative approach. If you were investing additional monies to top up benefit or tax, then who gets the return on that investment? If we are looking at prevention in terms of poverty, poor health, low education, then we again have to take a long term view to say that any tax that is raised is part of a preventative approach and that it is an investment in the future. In the future, you will have to invest lower amounts in health and wellbeing in criminal justice and homelessness, because you will have in theory citizens who are more productive, more prosperous, able to meet their own way in life through increased earnings. However, there is the other side of that. If you then use your tax raise and power to top up benefit, how much further does the benefit get cut? How much further do you then have to use those powers to subsidise issues that you have no control over? It is a very difficult dilemma, because there is only one pot of money. We have to be able to take a much longer term view, because we are looking at things from three years to the next, or in some cases one year to the next. If we are looking at a pure preventative approach, we are probably talking 10 to 15 years at least to invest in the social capital of your community of your citizens, to start lifting those embedded issues, because individuals who are vulnerable have multiple issues and they have deprivation on a broad spectrum. It is not only around income, although it is a well-known fact that increased income alleviates a lot of the other issues. However, things are so embedded that it will take a generation almost to try and reverse in some of our communities, particularly those where there are pockets of deprivation, social and economic, and how you actually deal with those communities as well as those individuals. There is a much broader issue around investment and how we invest in prevention and how, in the long term, we change the scenario and deal with the root cause instead of putting on some sticking plasters to deal with the symptoms of the issue. That would be my take. Fiona Hyslop, I agree with Pamela Hyslop. When you talk about raising taxes, you have to look at why and what we want to achieve by doing that. Are we providing a sticking plaster for a problem just now, or are we looking to plan for the future? An example would be part of my field is about social care. An example would be the difficulties that many people face in getting the social care services that they need. If we are raising taxes, we should be investing in that, because that helps individuals with health and wellbeing and reduces costs in another area. I do not think that we can look at it in one area. We need to look at what we are trying to achieve and what different elements of that we may need to raise more money for, or we may need to change policy and the bigger policy discussion about how things work better together. Sometimes it is really important, because for carers, one of the biggest things that provides some stress and makes them ill is trying to deal with a number of different systems, to deal with the benefits system, to deal with the social work system, to deal with health systems and a myriad of others. We just need to know why we are doing that and have a clear plan to make sure that we achieve what we want to do, but it is a purpose. I am going to come to Rob now, because I want to get into some more specific areas, particularly start on carers issues. We have got to home in on how we can make better use of the limited pot for a start, but it is obvious to me that when we are talking about dealing with people differently and more careingly, that perhaps goes hand in hand with reducing the bureaucracy that there is that they have to face up to in these different systems, so that you actually perhaps can reduce the costs of administration and use more money up front. Because thinking about carers allowance, it is an earning replacement benefit and therefore subject to overlapping benefit rules. What is the opinion of the panel about the overlapping benefit rule? Is it a necessary part of a social security system, and if so, should it apply to carers? I will answer the second part of that. It is problematic that it applies to carers, because caring is a reality across age groups. As I mentioned earlier on, particularly for people who are receiving the state pension, I simply do not understand why their carers allowance is taken away from them. Their caring duties do not end. Our view is that, although carers allowance should be seen as an independent income for carers, it should also be seen as a recognition of the caring role that somebody has. That should be across age groups. It should be, for example, if someone—some of the disability can be a carer—about 20 per cent of carers have a long-term condition or disability. People with disabilities, older people, are providing care already, so I think that there is a problem with it in that extent, but there is also a problem in trying to explain it to people. When someone phones up and you say that you have to apply for carers allowance, you will get a letter that says that you qualify for carers allowance but we are not going to pay you it, but you have established the underlying entitlement and you need to take the letter to the pension service and you may get an addition to your pension credit. It is really, really difficult to explain to people and they go, why? I quite often go, actually I am not going to bother, so it is a barrier, particularly a barrier to older people. We know that access to pension credit opens up other passporty benefits and other passporty support, so I think that our view that there needs to be something to prevent that problem occurring, whether the overlapping benefit rule remains or not, we need to try and change the system to make it much more clearer for people how they access the income replacement part of it, the universal credit and the pension credit elements and they do not have to create all these additional problems for them. The others in the panel have got to view on the overlapping benefits rule, etc. We know that carers anywhere, it is a quite broad church in terms of geography, age and stage of development. From my perspective, my interest lies in ensuring that benefits and allowances and so on do not get in the way of being able to provide an equitable service to carers, allowing them to access a skills intervention if required, to allow them to develop their on-going skills and participate in society. It goes back to an earlier point about ensuring that there is an alignment between employability and welfare, if you like, as well. We need to allow equal access to the services that are available across Scotland. Rob, do you have enough of that? No, I was just going to add a bit to it. The definition of a carer's benefit in the Scotland Bill has been criticised as being too limited to not allow people who are gainfully employed under 16 or in full-time education to qualify, but it also limits the amount of hours that they can work. Have you got a view about the potential for simplifying that and opening it up, Judith Patterson? Yes. I do not think that the overlapping benefit is a feature that is necessary to carers allowance. As Fiona says, particularly for people over pension age, it leads to a lot of confusion, because most of them are on a benefit that overlaps with, i.e., state retirement pension. You end up in a position where you are claiming a benefit that you are never going to get, and you are advised to claim it, and that is the correct advice. You get a letter saying good news that you are not entitled, but you get extra means-tested entitlements, so it is worthwhile. It is a ridiculously convoluted process. However, for working-age people, the overlap is with benefits such as job seekers allowance, employment and support allowance, which perhaps has some justification. The overlapping benefit is generally not used so much in the benefit system as it used to be. It is a bit of a dying-out breed. Generally, the divisions between benefits are dealt with by the fundamental entitlement conditions themselves. You do not get entitled to one benefit if you are entitled to another. Carers allowance is not dealt with in that way, but it overlaps. What needs to be considered is what carers allowance is paid for, so for some people it is paid because they cannot combine work and their carer responsibility, so the benefit is replacing those earnings as an earnings replacement benefit. For other people, it is because they have extra costs associated with their carer responsibilities, perhaps because they do not live with the disabled person that they care for, so they have extra costs of travel, all kinds of things. That suggests two possible types of carers allowance, one extra costs and one earnings replacement. It could even be one benefit with two different types of allowance combined within that benefit to help people with those different costs. Extra cost benefits in the system traditionally do not overlap with anything. They are like DLA or like PIP. They are paid on top of any means-tested benefits and are generally very helpful and more straightforward and universal. That would be a very straightforward, streamlined, claimant-friendly direction to take carers allowance in. If you got rid of overlapping benefits altogether, including for people who came out of work in order to claim, you would be in the situation of people being compensated through the GSA at £70, plus carers allowance at £70, which some people might feel was unfair. You could have an earnings replacement part and an extra cost part. I will roll out a specific round the definition as well. Can I ask for a comment from you on the definition issue? To be honest, we are quite concerned about it. We feel that the flexibility should be there to enable the Scottish Parliament to look at what carers allowance should look like. If we put restrictions on it, it creates complications. For example, particularly the study rule, I personally know a lot of carers who study, and a number who have chosen to study full-time and have lost their carers allowance, yet they are still caring. I think that that is the key element of it. Carers allowance is called an earnings replacement benefit, but I really do not know how you could say that £62 is an earnings replacement benefit. It is meant to be an earnings replacement benefit, and, thus, things like work and study are not necessarily meant to be off-limits, but it is meant to compensate for you to be able to do that. I think that what we need to change is a recognition of caring. That is simply what it is. It is a recognition of caring. It is an independent income for carers in their own right. They may have an opportunity to top that up through employment, but the reality is that, for a lot of carers, it is simply not going to be possible. I think that your idea around having the earnings part of it but also having the carer recognition part of it is a very good one. The fundamental point that you are making is that, regardless of how we might design it, because those are design issues for the future, currently, as far as you understand the bill, we do not have the ability to design how we want it to work. We are concerned that, the way that it is drafted, it is too restricted. I want to just make sure that we get that point. We had some discussions that indicated that there would be flexibility, but, following on from that, there has been a statement around the debate in the House of Commons by the Minister for State that seemed to indicate otherwise that there was, in her opinion, good reasons for those restrictions remaining in relation to other state support. Sorry. Was it a supplementary measure to that? Otherwise, I was going to bring Malcolm in there, could I? Fiona has gone into the issue around the discussions that have been taking place, which is an area that I am looking to... Let me come back to that, because there might be other areas where that generic question will apply to, if you see where I am coming from. I want to ask about Chelsea, but, following on from what you have discussed there, most of the jagged edge that we are discussing are within working-age benefits, but clearly the last discussion was really the relationship between carers allowance and the pension system. I wonder whether, in fact, the housing element of universal credit is another example of that, because I think that the Scottish Parliament is being given powers to vary the housing element of universal credit, but when you become of pension age, housing becomes part of pension credit. So I just wondered if that is another jagged edge and whether that is just something else that we have to live with, whether anything can be done about that. That absolutely is a jagged edge. In the briefing paper that Spice have produced, it has illustrated very clearly how the Scottish Government would have, for example, the power to top up the local housing allowance rate so that people renting in the private sector had a wider choice of tenancies that they could live in, but that power would stop at pension credit age, leading to the palpably unfair situation of somebody losing money at pension credit age towards their rent, if nothing was done about it, and potentially having to move house at that point. Would the Scottish Parliament have powers to do anything about that? Again, I think that you need to be looking at whether there were top-up powers to reserve benefits that might actually allow something to be done about that particular jagged edge, which would mean supporting people on pension credit throughout. I think that potentially there is action that could be taken. I think that it would be a shame if the powers were not used for people of working age because that would seem to be an insurmountable problem. I think that that was a helpful clarification, but what I was wanting to home in on was the comment in your own paper again from the child poverty action group in terms of more immediate opportunities to reduce childcare costs. Faced by parents, CPAC believes that in order to focus support on those on lower incomes, the most effective approach would be to use new powers to top up benefits, to top up childcare support within working tax credit, universal credit, and the context of that is your advocating that compared to the UK Government's tax-free childcare scheme. I do not know a lot about that scheme because it has not come in yet. I suppose that one question in relation to that is whether the UK Government would still pay the £2 into Scottish people who were contributing to that scheme. I do not know if anybody knows the answer to that question, but the main question really is in relation to the topping up of childcare support. Obviously, that has been flagged up by the UK Government this week as something that could be done, although Linda's point remains that it would obviously be how you would pay for it. However, I just wonder how you see that and again whether there would be any potential knock-on consequences from that in terms of adverse effects somewhere else in terms of people's family income. I think that in terms of the tax-free childcare scheme, you are quite right that it is not in foreshet, but, in our view, it is not a scheme that will help parents on the lowest incomes by its very design. There are very problematic aspects of it as well. The most problematic one being that parents have to make a choice between claiming a tax credit or tax-free childcare. That is not a choice between claiming childcare support within tax credits. You have to take or leave your entire tax credit award in order to take up tax-free childcare. If you make the wrong choice, you end up being much worse off. That is not a happy position for claimants to be in. I think that the choices that they need to make are complex enough without being presented with one with such dire consequences. The tax-free childcare scheme is not one that supports the people who need the help the most. In the long term, our preference would be that the childcare system is funded on the supply side, so that there is funding put into high-quality childcare with universal access. Parental contributions are capped. However, that might be more of a longer-term ambition. In the short term, we have a system to help parents with their childcare costs, and that is the tax credit system that will be moving towards universal credit over the next few years. At the point that Scotland is able to use those powers, that will be further down the road, but there will still be a large cohort of tax credit claimants, as well as a growing cohort of universal credit claimants. In order to be fair and not to introduce more jagged edges, top-ups would need to be considered for both those cohorts, which present issues in relation to working with both HMRC, who deliver tax credits, and DWP, who deliver universal credit. However, it is feasible, and co-operation with DWP in relation to universal credit needs to happen anyway, because there are direct powers in relation to universal credit. It seems to me entirely possible to work with DWP to put in place other Scottish-specific measures. With tax credits, the tax credits are going to be diminishing in importance in the system over time. A way might need to be found to directly compensate tax credit claimants if it proves more difficult to work with HMRC for that to happen within the system. I agree with you on the supply side and the top-ups, but can you tell us, in terms of those, presumably, people earning on higher incomes, whether they would benefit from the tax recharculers under the UK Government's proposals? Do you understand that? They would still get the advantage of that if they were parents in better employment? Who did not get tax credits? I have not got the analysis in my head, but parents in better paid work could be better off with tax free childcare than on tax credits. Some parents would be entitled to tax credits at all, and with tax credits becoming less generous in any case over time, there will be more parents coming out of the tax credit system and relying on their wages alone. Those parents could benefit from tax free childcare. Given that income tax is to devolve your understanding as they will still be able to get the tax relief from the UK Government? As far as I understand it, the tax free childcare system has connections with the income tax system, but it is not actually a fundamental part. It is not delivered through income tax as a tax allowance or as a tax refund. The connection is that you set up a different account, and for every £8 that a parent puts in and the Government puts in, too. That sort of 80p-20p split reflects the basic rate of tax, however it is not paid or collected through the tax system, so it is separate. It should be applicable in Scotland, too. That is all fascinating stuff in terms of its detail and its depth, but it is beginning to lead. I am sorry that it is just me where I am, folks. I am feeling a bit frustrated because what we are really saying here is that what we are going to implement is a very expensive bandage system. A very expensive elastoplasts are going to have to be applied to a system that is not working, so we might not be able to afford a elastoplast to actually do the job. That is a heck of a frustration that I am getting myself into around those issues. I was going to say on that convener that there is a distinction between feasibility and affordability in those terms and whether something can be practically done and whether something can be afforded or two different things. The other thing that I wanted to check was in terms of the feasibility around the tax credit system. At the moment, tax credits are administered through HMRC, not through DWP, so they are technically not classified as a benefit. They are more of a tax rebate. Under the proposals that are framed in the Scotland bill, would they not find themselves excluded? The issues around tax allowances and rebates are not going to be devolved as part of the tax powers that would come to this Parliament. I think that, again, to make the distinction that the convener helped to bring out earlier on, tax credits are not a tax that they are much more akin to a benefit. You are absolutely right that it is not clear in the Scotland bill what comes under the umbrella of benefits. It is not clear whether that would include tax credits or not, but one would expect that it should. The clarification ought to bring that within the umbrella of potential top-ups, powers to top-up benefits and tax credits. They used to be part of the benefit system. They were renamed and given to HMRC to administer, but the essential characteristics have remained the same. They are not through the tax credit system. I think that it is certainly possible, and with some clarification, that will be helpful that Scotland will have powers to top up tax credits. I wanted to talk about the clarifications and the discussions that have been had. Obviously, you are giving evidence to the committee that you have had input to the Scottish Government in terms of the approach that they are taking. What direct approaches and discussions have you had with the UK Government? At the end of the day, the amendments that are tabled, the amendments that are accepted by the Government or the gift of the Secretary of State and the UK Government, what discussions have you had in those respects across the witnesses? Obviously, I do not work alone. I have been working with my colleagues at Carers UK, and they have been meeting with various ministers and officials from across the UK Government across the DWP. Along the process that we have been seeking amendments, we have been seeking clarification and working with MPs from each of the parties. Obviously, it is now moving into the lords, and a similar process will take place where we try to seek amendment there and we try to get support for that amendment from all sides. It is probably broadly similar from what I do here. My colleagues in London, of course, are working with us and are seeking to get the same amendments and clarification. Obviously, we are still in a position where we do not have all those answers and we do not have all the clarification. As I said, it is very important that we get that as soon as we can. Most of our representations are through COSLA, and a lot of the opinion is aligned to the Scottish Government, so a lot of it is a giant representation through the local and Scottish Government to the UK Government. I do not think that we have been campaigning on any separate issue or have any different view from what we are promoting through the Scottish Government. Apart from when it comes to the devolution, we will then look at what comes to the local Government, and we will have a different debate with the Scottish Government around that. Mark, I just ask a very general question. You have been trying hard to get things changed in terms of the amendments and the discussions that are going on. Has anyone at any stage had any movement or change in anything that you have suggested, or seen any movement or change so far? I do apologise. The key one is the one that I raised about the eight-week rule that came up. We have asked for clarification. We were hoping to get that. For us, there is a timescale here because we are in a commissioning process around the employability fund. We have asked the UK Government to give us clarification. We asked for it. We were told that we would get something in August, we were told that we would get something on 3 September, but we have not received any clarification on that as yet. Is there anyone in terms of lobbying that you have been doing, seeing any changes or any impact from—you might have had an impact, but have you heard any movement by the UK Government in terms of what you are trying to do? I think that I am probably clear about the fact that there obviously was no amendment accepted at the passage. I am just trying to get that on the record so that— Yes, yes. I just do not assume that the amendments were put in and weren't taken. I apologise, but I had to leave to deal with another matter, so I might have missed it, but it just in case has not been asked. It follows on from Mark's questions about practicality and affordability—the ability to do something and the ability to afford something. I have listened this morning carefully and I have heard a whole range of issues where we could top up or add new benefits. There are lots of other ones that have come at other meetings and other evidence on that. Can you put a figure on how much that will cost? No, I cannot put a figure on that. We have not done that kind of analysis. Can you put a figure on how much the suggestions that you have made this morning will cost? I think that we could look at that, because those welfare cuts were announced in the summer. The powers that the Scottish Government might or might not have been unclear, so the suggestion to use the powers is a fairly new one. I think that we need to do that analysis and we are prepared to do that to be helpful. It would be helpful, because it sounds very expensive. I think that that information is probably out there in relation to the impact statements that the DWP have produced on the costs of their cuts in the UK, so it probably could be analysed to work out the costs for Scotland. Against that, you have to put aside the costs. That is one side of the equation, the direct costs of topping up, the other side of it is the costs of not doing anything and the knock-on effects on health and education and so forth, because the reality is that those families will have less money and they will be presenting to other services for support. One way or another, the consequences will have to be dealt with in Scotland. Linda Scott has a supplementary question. It is something from way back. It is something from way back. Okay, let us get way back to the future. It was talking again about work programmes and things such as sanctions and conditionality. I was getting a bit confused about some of the things that were being said in relation to sanction applied, but there may be an element of conditionality that could be done in Scotland, which is not what I have been picking up by what we are talking about. When I have been looking at the Scotland bill and doing some background reading, it would seem to me that the conditionality is going to stay at Westminster unless that very much gets changed. I would like a quick view on that and the reality of it and whether, in fact, it would be much easier all round if the whole thing was devolved in terms of the conditionality aspects of the work programme, etc. That was a great experience. Our belief is that the conditionality will remain in the effects and impact, and it would certainly be a lot neater if it was all devolved and we could re-engineer our total system there. Whether there is flexibility is another issue as to how they are then applied. I think that it has been quite variable across the 32 local authorities how sanctions are applied and also how the work programme providers refer people for sanctioning. A lot of it is quite subjective in their view that they have not complied or that they have not given a good enough rationale as to why they did not do x or do y. There is some subjectivity in sending people for sanctioning. That is perhaps why I was picking up. Unless somebody else has got any other questions, I think that this is probably the end of the process here. I am grateful to you folks for coming along. This is an incredibly complex area and with many threads to it, so I am grateful that you are trying to make it more visible to us about what all this means. Again, thank you very much for coming along. We meet again next on 29 October. I can also give late apologies for Alison Johnson. She put a note into herself after the start of the meeting. There are very understandable reasons why she could not manage today. I close the meeting and thank you very much.