Chamber and committees

On your earlier point, the third sector has often made the argument that being able to pay staff the real living wage and hold on to staff is probably more cost effective than having high staff turnover. That is not to underestimate the challenge, but having the certainty of multiyear funding, with staff knowing that they will have a contract next year, prevents people from leaving to look for other jobs because funding is uncertain. That is probably why multiyear funding has been the third sector’s key ask above all else, and its importance cannot be overestimated.

When we work with a stakeholder on a long-term basis, I expect them to receive a multiyear grant. As I said earlier, we want that to be the default. However, it is not always appropriate, such as when a project is coming to an end or is given a short-term funding arrangement, such as a one-year, one-off payment. Officials are processing grant proposals now, and we will monitor progress across the fairer funding principles, including multiyear funding, to make sure that we can roll that out as quickly as we can. It will become the default and presumption rather than the exception.

Officials meet the SCVO and other umbrella organisations for the third sector regularly. I cannot remember exactly when I met the chief executive of the SCVO, but I recall having a discussion last year. Multiyear funding is always, understandably, a key ask in those discussions, and we will continue to work with the SCVO and others on moving to the new system of multiyear funding.

Our relationship with the SCVO and other bodies is good. The SCVO has been an extremely important partner on Covid recovery, so other ministers have met it and have heard its input on that. We will continue to do that. It is an important relationship.

If it is okay, we will come back with the latest figures, convener.

Yes. The cost of living crisis is huge, and we have tried to prioritise support for households—particularly low-income households. Over the past year, we have invested £3 billion in that—£1 billion of that was available only in Scotland. Some of that money had to be reallocated and reprioritised to ensure that we were able to do that.

Looking forward, the levels of pressure on household budgets remain the same, so we are looking to do what we can through the budget to support household incomes. We are doing that against the backdrop of a very difficult financial settlement in respect of the autumn statement and the consequentials.

Members will be aware of the reductions in capital allocations over a number of years, and the pressures on capital budgets and resource budgets. If we add to those the inflation levels, that means that every pound that we invest is worth less than it was last year and the year before that. That is before we consider the impact of the pandemic, which continues to impact on the recovery of public services.

All those are backdrops that no one would want in trying to move forward to support households and tackle child poverty. The backdrop is extremely difficult, but we have tried to prioritise support for low-income households as best we can.

It is, of course, for the committee to do that if it wants to. We can come back to the committee with some timeframes, if that would be helpful, so that you know what is happening for your own planning purposes.

I will say a couple of things about that. The commitment in the customer charter is to handle the client’s

“application and enquiries as quickly as we can”.

That is Social Security Scotland’s commitment, and it is still the case. Alongside nearly 70 other performance measures, the charter measurement framework considers what proportion of applications for low-income benefits were processed within 10 days.

The background to that measure was that it was chosen at a time when the framework was being developed, back in 2019, and it reflected, and was based on, the 10-day statutory timeline specifically for processing funeral support payment applications at that time. That was before the introduction of many of the current benefits, and the organisation is now very different from what it was back in 2019. That includes the Scottish child payment, which we have just been talking about, with regard to the number of applications that have come in.

Taken together with the other measures, that measure helps to provide the context for performance against our charter. However, I do not think that it was ever a target as such, and it was not intended to reflect standard processing times across all low-income benefits.

It is not that it is not important, but what is most important is that we get it right. Jeremy Balfour and other members of the committee will be aware of the complexities around some of the disability payments, for example. The information that is gathered often comes from various sources, and we need to get it right first time rather than have to revisit decisions. Although the processing measurement—it is a measurement, rather than a target—is important, it has to be seen in the context of all the other benefits that Social Security Scotland is now administering.

I do not know whether Kevin Stevens has anything to add.

That goes back to the points that I made in my opening remarks. We see it as a priority to tackle child poverty and poverty among some of the marginalised and low-income households in our society. Even before the cost of living crisis, the social security system that we had established in Scotland reflected the fact that we wanted to do more to support people and to have a different system that was based on dignity, respect and fairness. The funding and budgetary decisions really follow from that commitment. The introduction of the Scottish child payment and the investments that we are making in the other benefits reflect that.

With regard to the largest part—£208 million—of the difference in respect of the personal independence payment, the SFC forecast an increase in the number of successful new applications, partly as a result of the prevalence of mental health conditions and worsening long-term health conditions, and the cost of living crisis leading to people being more likely to apply. That is why the forecasts are as they are.

The other point to make is that the £776 million above the level of funding from the block grant adjustment is money that we are having, by and large, to find from a fixed budget. That goes back to some of the key issues around the fiscal framework and the fact that it needs to be reviewed. Some progress has been made on that, but we are still very much in the foothills of those discussions with the UK Government.

Another point concerns borrowing powers. If we look at the actions that most other countries have taken during the cost of living crisis, we see that they are able to use borrowing powers to respond to that crisis, whereas we have had to find additional money within a fixed budget, which has its limitations.

We have made those decisions because we believe that they are the right decisions and the right priorities.

That is obviously an important question. As part of the ending destitution together strategy, which we published with COSLA, the Scottish Government is funding the Scottish crisis fund project, which is delivered by the British Red Cross. The project aims to support people across Scotland who are facing crisis, including people with no recourse to public funds. It provides crisis funds via a cash distribution network and helps with wider advice and support for people who are facing destitution.

Understanding the level of demand for cash assistance is one of the project’s key objectives, and the British Red Cross is collecting data on grants that are delivered through the project. That will help to build a picture of the circumstances of people who are facing crisis situations, including people with no recourse to public funds. The data will not identify the number of people in Scotland with no recourse to public funds. That condition is applied widely to people who are subject to immigration control under UK immigration law, including international students and people on employment visas, so it is quite difficult to get those figures.

Since April 2022, the Scottish Government has provided £362,500 to the British Red Cross to support the delivery of the Scottish crisis fund project, and officials are finalising funding for the rest of the financial year.

We recognise that we are talking about a vulnerable group of people. As I am sure Foysol Choudhury will know, there are huge limitations to the support that can be given through public services. We are very constrained by UK Government rules on that. However, we have provided that important crisis fund through the British Red Cross.

We had quite a long discussion at Tuesday’s committee meeting about balancing local government’s demand for more flexibility—which I am sympathetic to—with making sure that discrete areas of spend, such as homelessness, deliver the progress that we need to be delivered. The question is whether the progress that has been made on the housing first programme and the rapid rehousing transition plan would have happened if that money had not been earmarked for the purpose. Those are not easy things to balance.

If local government representatives were sitting at this table now, they would say that those are joint priorities and we need to trust local government to get on and deliver them. We have joint accountability for the delivery of those joint priorities, so we need assurance about that.

The discussions will continue. I am keen to make sure that local government has that flexibility, albeit against a very challenging backdrop. Again, we have discussed at length the £570 million that has been made available for local government against that challenging backdrop, while bearing in mind the fact that we had only £800 million of consequentials from the UK Government budget settlement. We will, no doubt, continue to have these debates, but within that global amount are some really important discrete areas of spend, and homelessness is definitely one on which we need assurance that the good work that has been done jointly with local government continues.

We cannot shy away from the fact that difficult decisions will have to be made across the public sector, not just in local government. The Accounts Commission pointed out that, based on the profiling of the budget set out by the UK Government, years 3 and 4 look particularly challenging. Even though things are tough, this year and next year will be the best time to look at reforms, at how services could be delivered differently and at whether there are some services that could be shared while maintaining a policy of no compulsory redundancies, to which most, if not all, councils have committed.

That will mean having to look at how things are done differently but, if you look at the quantum of the budget that we have and at how we have allocated it, bearing in mind inflationary pressures, you will see that we have tried to do what we can to give local government a fair settlement in the circumstances.

It must be recognised, however, that this is probably the most challenging budget settlement since devolution, because it is not just about the quantum of money; it is about inflationary and pay pressures. Those heap problem upon problem on an already stretched budget. We have tried to set out our rationale, and we have used our tax-raising powers to raise additional moneys to put towards the NHS in particular. We will continue to discuss with other parties what other options people feel could be brought to the table, but there are no easy answers here.