Employability services budget slashed

13th December 2015

UK spending review estimated to cut £40m from devolution of new powers.

An estimated 75 per cent cut - reducing anticipated funding by around £40 million a year - to Scottish employability services from the UK spending review will severely affect Scotlands ability to implement a new service in 2017.

Cabinet Secretary for Fair Work, Skills and Training Roseanna Cunningham has today written to UK Secretary of State for Work and Pensions Iain Duncan Smith to outline serious concerns over how the UK Government Spending Review will impact on unemployed Scots.

The changes announced will deliver a significant cut to funding for newly devolved services and therefore limit what Scotland is able to deliver.

In line with the Smith Commission recommendations, the Work Programme and Work Choice were to be devolved in less than 18 months. The Scottish Government embarked on a wide-ranging public consultation over the summer the employability support services people in Scotland want, and how they could help those furthest from the labour market.

Ms Cunningham said:With employment services due to be devolved, we have listened to people in Scotland on the employment support they need, and how to develop a distinct Scottish approach that treats people with respect, and better supports those with real difficulties to find work.

The Work Programme as it stands is not fit for a modern Scotland. After hearing from those who use these service, communities, businesses, training providers and the trade unions, we now know what we want to provide. However, our ability to deliver this has been significantly impacted by poorly thought through Westminster policy proposals that have not been brought to our attention in an acceptable fashion.

We estimate DWP intends to cut its spend on Scottish programmes to be devolved by around £40 million annually – around 75 per cent. This undermines the agreed intentions in Smith and comes on top of existing limitations in powers being devolved. It is our view that the Smith Commission envisaged the Scottish Government having greater influence over these issues from April 2017 and this cut diminishes their recommendations to an unacceptable level.

The UK proposals will magnify the challenge of helping those further from the labour market into work. The prospect of an even more intensive use of sanctions will magnify the already disproportionate impact on young people and those with disabilities in Scotland who are subject to sanctions by JobCentre Plus.

I have today written to the UK Work and Pensions Secretary seeking an explanation on the implications of the UK Spending Review announcements for Scotland and have demanded an urgent meeting of the Joint Ministerial Working Group on Welfare to discuss the issue.

The clarity needed to procure services has also not been forthcoming from DWP with a number of information requests by the Scottish Government remaining unanswered after several months.

The lack of information on this vital issue is unacceptable and this latest move will have serious implications on both unemployed people in Scotland and the support they require.