Scotland Act 1998 (Modification of Schedule 5) (No. 2) Order 2013

Lord McAvoy Excerpts

Thursday 13th December 2012 Grand Committee

[The Advocate-General for Scotland (Lord Wallace of Tankerness)]

My Lords, I will provide the Grand Committee with a brief summary of what this order seeks to achieve. The order is made under Section 30(2) and (4) of the Scotland Act 1998; in other words, it is a Section 30 order, like that which seems to have dominated much of the political discourse in Scotland over the past 12 months, but not the same one. Section 30(2) provides a mechanism whereby Schedule 4 or Schedule 5 of the Scotland Act can be modified by an Order in Council, subject to the agreement of both the UK and Scottish Parliaments, while Section 30(4) enables the modification of other enactments where that is considered necessary or expedient in connection with other provision made by the order.

This order will amend Section F1 in Part 2 of Schedule 5 to the Scotland Act 1998, which I shall refer to as the social security reservation. It will also give certain pre-existing devolved enactments—those conferring functions on Scottish Ministers or local authorities—effect as if this new version of the social security reservation had been in place when those enactments were passed or made, rather than the version of the social security reservation that actually existed at that time.

The Welfare Reform Act 2012, which I will refer to as the 2012 Act, contains provision to abolish the discretionary Social Fund. It is the intention of the Department for Work and Pensions to commence Section 70 of the 2012 Act from 1 April 2013, subject to certain savings and transitional provisions. Thus, community care grants and crisis loans for living expenses will be abolished from that date.

Although no provision for any assistance to replace community care grants or crisis loans for living expenses is provided within the 2012 Act, it is the UK Government’s policy that the new assistance will be delivered in England using existing powers in the Local Government Act 2000 and that it will be for the Scottish and Welsh Governments to decide on what new assistance will be provided in Scotland and Wales respectively.

However, the social security reservation means that the Social Fund and all its elements are reserved to the UK Parliament. Therefore, new arrangements cannot be legislated for, or indeed provided for, by the Scottish Parliament or Scottish Government within their existing competence.

This Section 30 order will provide a new exception to the social security reservation to widen the legislative competence of the Scottish Parliament so that it can provide newly created assistance to those members of the community in Scotland who might previously have applied for a community care grant or crisis loan for living expenses. Payments made out of the Social Fund will remain reserved, as will other existing social security benefits.

Although in the future the Scottish Government may decide to legislate to provide new assistance to those members of the community through primary legislation, it is the current intention of the Scottish Government that local authorities should provide newly created assistance for an interim period of two years. To provide this assistance, those authorities will use their power under Section 20 of the Local Government in Scotland Act 2003, which is known as their power to advance well-being. However, Section 20 of that Act, as it was enacted by the Scottish Parliament, does not presently give local authorities a power in an area for which the Scottish Parliament could not legislate when the 2003 Act was passed. There may also be other Scottish ministerial or local authority functions that are relevant to the exercise of the new area of devolved competence that similarly need to be expanded. We therefore believe it expedient to modify any relevant devolved enactments made prior to this order to enable the Scottish Ministers and local authorities to use such functions to provide this new assistance. My Lords, this order makes that modification.

I assure noble Lords that funding is being transferred from the Department for Work and Pensions to the Scottish Government to allow that this new assistance be provided. Based on figures provided by the Scottish Government, set-up funding of just over £2 million has been agreed between the two Governments. Agreement in principle has been reached and we expect the transfer of these set-up funds to be completed shortly.

Within the current spending review, the Department for Work and Pensions has been allocated £178.2 million for the discretionary Social Fund. This allocation will form the programme funding for the new provisions in England, Scotland and Wales, with £178.2 million per annum being apportioned nationally. In 2013-14, programme funding of just under £24 million and administrative funding of just over £5 million—which includes funding for processes that may be put in place locally to review individual awards of funding— will be transferred to the Scottish Government. In 2014-15, programme funding of the same amount and administrative funding of just over £4.5 million will be transferred. A settlement letter outlining the indicative allocation was issued to the Scottish Government on 6 August 2012.

This Section 30 order is necessary as a result of the 2012 Act and the UK Government’s policy that it is for the Scottish Government to decide what new assistance will be provided in Scotland following the commencement of Section 70 of the 2012 Act on 1 April 2013. This order demonstrates the Government’s continued commitment to work with the Scottish Government to make the devolution settlement work. I hope that the Committee will agree that this order is an appropriate use of the powers in the Scotland Act. This draft order was debated in the House of Commons on 11 December and was subsequently approved on 12 December. The draft order was also debated in the Scottish Parliament on 11 December, where the Welfare Reform Committee resolved to recommend the draft order to the Scottish Parliament. I commend the order to the Committee. I beg to move.

[Lord McAvoy]

My Lords, once again I thank the Minister and his staff for the admirable help and support that they have given me in looking at this legislation. My admiration for the noble Lord’s organisational abilities is somewhat dented this afternoon because he was not able to get the order higher up the Order Paper. In addition, he does not seem to have arranged heating in this Room. I will move rapidly on.

This order is a result of the Calman commission set up by the Labour Government to look at further areas where devolution could be brought in. The Minister has explained it perfectly well and I have no intention of repeating all that. However, I have a couple of questions; perhaps, as an amateur at the Dispatch Box, I will ask the wrong questions but, as ever, I will try to work it out.

The noble Lord said, if I picked it up right, that £178.2 million was a proportionate share. Is that a Barnett-formula proportionate share? What is the connection to the money that has been spent in Scotland so far? Is there any relation in the Barnett formula calculation to the calculation of how much will be paid out? If there is a difference in one, it would therefore seem to be cash-limited. Is it that every case will be looked at, or that once the money is finished the allocation is finished? Does that mean that no more cases can be looked at?

We are in a rather fluid situation in Scottish political life at the moment because of the forthcoming referendum. Maybe my mother well named me “Thomas”—I do not know—but what guarantees are there that the cash transfer to the Scottish Government will be spent on these matters? In addition, is there any way that the Scottish Government can tamper with the money that has been allocated notionally—and hopefully practically—for local authorities in Scotland and not give them their full allocation? Local authorities in Scotland have quite justified concerns about how the Scottish Government allocate money to them. We dearly need to know whether there is any way, once the money is passed over to the Scottish Government, that we in Westminster have any avenue or platform with which to raise concerns. I may be chasing a hare that is not running, but if the Scottish Government do not provide all that money straight to their local authorities for the set-up costs, is there anything that we here can do about it? Were these safeguard issues discussed for the integrity of the money being spent for the purpose that we at Westminster are allocating it? Was there any mention of these two or three questions—on the finance, the proportion and how it is to be monitored, and safeguards to ensure that local authorities get all the money that is meant for them—during these discussions?