I will set the context for the welfare reforms with regard to local authorities’ interests, particularly those relating to conditionality and sanctions and the employability agenda. Last year, local government supported 25,000 unemployed jobseekers into employment and had 67,000 vulnerable individuals participating in employability programmes.
Picking up on what Mike O’Donnell said about the conditionality and sanctions regime, there are certainly a few jagged edges. The question is the degree to which the Scottish Government will have the freedom and flexibility to redesign programmes such as the work programme and work choice if the DWP is dictating participation conditions in terms of hours, weeks and content. We might find that we are developing and designing employability programmes to meet a sanctions and conditionality regime as opposed to employability programmes that meet the needs of individuals, particularly those more vulnerable individuals who may be disallowed from participating in activity that would help their confidence and motivation. Of particular concern are those people with disabilities or additional support needs and ex-offenders—people whom the work programme has traditionally failed. Sixty-eight per cent of those who complete the work programme remain unemployed at the end of it.
The freedom and flexibility of the Scottish Government to revamp and redesign the programme so that it at least supports into employment more than half the people who participate in it is going to be impaired by conditionality and sanctions. The money for the programme and the legislative framework will come with so many conditions attached that it will be almost a poisoned chalice for the Scottish Government as well as for local government—we, too, fund our local programmes and have our European social fund employability pipeline money. The participation conditions will be the same whether the programmes are administered and funded by the Scottish Government, by SDS or by local government.
Our interest in employability is based on its relationship with poverty, inequality and the wellbeing of our communities. We know that people who are in well-paid, sustainable employment are healthier and that their communities are healthier and more prosperous. There is also an issue around people who are in work. We know that there is a working adult in the households of the majority of children who are living in poverty, and the conditionality and sanctions regime will apply to those in work who rely on working tax credit or in-work benefits. They will be encouraged to take low-hour contracts and contracts that might not meet their personal and financial needs to avoid facing sanctions. There is also the issue of how both the Scottish Government and local authorities will deliver in-work support to enable people to up their skills levels, which will, in turn, enable them to improve their earnings potential and increase their hours.
There are a lot of jagged edges relating to conditionality and sanctions, how we lift people out of poverty and how we improve and connect with the fair work agenda. In addition, there is the question of how the Government can increase policy coherence. If we have policies on the Scottish business pledge and we use a number of instruments to implement social policy, how are we going to do that?
Although it is not linked directly to welfare, a further issue is the apprenticeships levy, which is a reserved matter that is out for consultation. Because the pay-as-you-earn system is reserved, the UK Government will levy large employers—those that have more than 250 employees—to fund apprenticeships and, at the minute, we have no guarantee that any of that money will come back to Scotland for training, because apprenticeships and training are devolved matters. Local government and public bodies will also be subject to the levy. Although training and skills are devolved matters, that national levy will be applied on the PAYE of large employers through Her Majesty’s Revenue and Customs.
For local government, there are loads of issues with jagged edges relating to how we can achieve our aspirations and ambitions when certain powers are reserved to Westminster.
09:45