Equality and Budget Advisory Group minutes: October 2016

Attendees and apologies

Present

• Paul Tyrer, Communities Analytical Services, Scottish Government
• Angela O’Hagan, Glasgow Caledonian University and Scottish Women’s Budget Group
• Lorraine Cook, COSLA
• Chris Oswald, Equality and Human Rights Commission
• Eleanor Deeming, Equality and Human Rights Commission
• Karen Grieve, Equality Unit, Scottish Government
• Nicole Ronald, Equality Unit, Scottish Government
• Liz Hawkins, Communities Researcher, Scottish Government
• Chris Boyland, Social Security, Scottish Government
• Hazel Bartels, Social Security, Scottish Government
• Andy Park, Communities Economist, Scottish Government
• Jonathan Sewell, Income Tax and Fiscal Adjustments, Scottish Government
• Ian Storrie, Finance Policy, Scottish Government

Apologies

• Yvonne Strachan, Deputy Director for Equality, Human Rights and Third Sector, Scottish Government
• James Fowlie, COSLA
• Jim McCormick, Joseph Rowntree Foundation

Items and actions

Item 1 – Social Security Consultation

Chris Boyland provide some background of the intention to bring forward the Social Security Bill and an update as on the social security consultation to date: the purpose of which is to gather insight from people who have a practical understanding of what the devolved benefits are to be. The consultation will close on 28 October and this will be followed in early 2017 by a report on the returns/evidence (an external analysis of the responses) and the Scottish Government’s response to the consultation.

Eleanor advised that the EHRC has been working collaboratively with the SHRC on some joint initiatives in this area, namely:

1. engagement with civil society as to what the principles of dignity and respect at the heart of the system are and what this means in practice
2. research has been commissioned on comparative jurisdictions where there’s a social security system where these principles are at the heart to learn lessons
3. an offer has been made to EHRC colleagues in Manchester regarding cumulative impacts, the learning from which can be drawn upon in considering the system in Scotland

In response to whether there were any particular issues for particular groups to accessing the system to receive their benefits, Chris B replied that the principle issue was the way in which people have been treated in the context of their illness or disability. The most common complaints around disability benefit are around the processes to access it and the way people are treated, rather than the benefits they experience as a result of the money they receive. As a result, there is a move with the system under development in Scotland to do away with sanctions, and to instead have a greater focus on dignity and respect and the entitlement to accessing this support.

In response to how the Scottish Government is building equality into social security spending decisions, Andy advised that social security spending is demand-led and so the budget for this needs to be managed in a different way to other Scottish Government spending. Hazel added that there is still a lot of work to be done to ensure Scotland is able to make this capacity of payments so that nobody misses a payment.

There is a lot of joint working with DWP taking place around the implementation of a social security system in Scotland. There are some restrictions around what can be published as DWP is the data controller. Until Scotland starts to make payments, all the data belongs to DWP.

Until the Scottish Government gets competence, we cannot access details of current claimants. The only viable way of sampling to come up with a representative panel is for DWP to do the sampling for us. For a period of four years from early 2017, on behalf of the Scottish Government, the DWP will randomly sample 2,500 people in receipt of the range of benefits being devolved (as well as others who want to be involved) with sufficient numbers of claimants for each benefit to enable robust quantitative analysis to be carried out. Consideration also has to be given as to how the experience of those who have fallen out of the system can be captured.

Concern was expressed that the random sampling might exclude some of the smaller equality population groups who should be claiming benefits, for example, deaf/blind people and minority ethnic people. Oversampling was suggested as one way in which to ensure the experience of these groups was captured. Andy advised that it is their intention to look into each person’s individual circumstances initially to better explore these issues further.

Andy was also asked about the intersectionality of benefit claimants’ characteristics, and how it was proposed the challenges and pressure points people face when there is a change in one area of their lives which can have a hugely detrimental effect in other areas would be captured. In response, Andy stated that it is their intention to look at crossovers wherever possible, and that they are keen to resolve inconsistencies that have arisen in the current system.

Item 2 – Tax

Andy advised that a number of models were being developed within the Scottish Government to look at the impact changes to tax and the benefit system have on people and finances. These use family resources survey as their base, and because of the nature of the sample, they are limited in terms of the analysis that can be carried out. In advance of having full powers and responsibility, the Scottish Government will not have full access to this information and will be unable to look at the impact across, for example, different types of disability. Andy welcomed any suggestions on how this could be improved. EBAG regularly discusses deficiencies in data, and members advised that they would be happy to engage with tax colleagues on policy formation to help get this right. It is important that advancing equality is the starting point for policy and other decision making rather than policies and other decisions being made and the equality impacts assessed afterwards.

Andy also advised that it was not in the Scottish Government’s gift to make flexibilities, such as split payments, in respect of universal credit payments. Under Smith, the three flexibilities agreed were fortnightly payments, housing flexibilities, and direct payments to landlords. As there is nothing in the legislation at the moment to consolidate the principle on split payments, i.e. that split payments should be an option, DWP would have to be asked to do this. Andy added that, as part of the options appraisal, a multi-criteria analysis is being carried out. One of the five criteria groups is ‘equality and inequality’, and it will be up to ministers to apply their own importance to the results as these are not being weighted in the analysis.

Jonathan provided a brief update on the Scottish Rate of Income Tax (SRIT). The understanding is that this is being delivered successfully, although there will not be any outturn of data on SRIT until two years after implementation. The digitalisation process is continuing which is an important strand of the model in terms of inclusion. Access to data is tricky as HMRC remain the owners of the data and there will be no point at which this will transfer to the Scottish Government. There is a need to keep this under review and to develop a method of accessing data to inform policy costings, but the confidentiality issues are causing some problems.

Item 3 – Finance update

Ian provided the group with a brief update on the Draft Budget. Following identification over the summer that the Autumn Statement was an issue in terms of the block grant allocation, Mr Mackay wrote to the Finance Committee to propose that the Draft budget was delayed until after the Autumn Statement. On 21 September, it was agreed that the Draft Budget will be published in the week commencing 12 December. The Finance Committee would like to see scenario planning before this date, and Mr Mackay has committed to publishing aggregate budget position scenarios. Spend on new Programme for Government and manifesto commitments will be prioritised, and areas of historical spend will require re-prioritisation as a result, particularly if they are not delivering better outcomes.

Ian advised that the Draft Budget chapters had not yet been commissioned due to uncertainties around the format the new Cabinet Secretary will want the document to take alongside new tax and spending powers. Ian also mentioned the Fraser of Allander Institute report which provides a helpful indication of how the UK Government may respond to Brexit. The adjustment to Scotland’s block grant is a permanent one now. Rather than following the current process, a working group has been set up to consider what system should be in place when we have spending power to ensure scrutiny and transparency whilst not exposing ourselves to financial risk. The Budget Review Group has already met once (29 September) and will also consider whether the suite of budget documents we currently publish are the right ones for the new process developed. Ian encouraged EBAG to discuss what could be considered before the Draft Budget is published.

Some initial feedback in response to Ian’s contribution included that more consultation with interested groups, such as EBAG, would be useful around the Draft Budget process; and that in the week of Minding Scotland’s Money conference (12 September), no mention had been made of the EBS as part of the Draft Budget process which was disappointing.

In conclusion to the meeting, Paul advised that EBS leads have been commissioned to start production of their portfolio chapter and have been encouraged to talk to their Budget leads to help inform this. The 2017-18 EBS will be similar to that produced last year due to the short amount of time available between the Autumn Statement and the publication date, and it is intended to have at least one thematic chapter (on Inclusive Growth). Discussions will be on-going with other areas as to what else could usefully be included which will be informed by the key themes identified by EBAG, but there is unlikely to be a chapter on social security considering the consultation is still in progress.

Those who had participated as part of the thematic discussion were thanked for their contributions.