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We did not have any forewarning. There is an irony in that because it is well rehearsed that intergovernmental relations with the previous UK Government were exceptionally difficult. However, even during the worst of those phases, there was an exceptionally good working relationship on the operational level between the DWP and the Scottish Government. That was one of the few areas in which that continued in a respectful way. We have genuinely never had this situation before, and the irony is that wider intergovernmental relations have improved. Having said that, I have made clear my views to the secretary of state. We have had those discussions and we now need to move forward.

I hope and believe that there is greater recognition that we are in a different phase now with the devolution of social security and that any change like this will have an immediate impact. A change that relates to benefits such as this one or to disability benefits, can have big consequences for in-year or future years’ expenditure.

We have been through a very difficult phase, but the secretary of state and I have had that discussion, and we are keen to move on and for that not to happen again. The responsibility for ensuring that that is the case lies with the DWP. I have been given those assurances, and I will take the secretary of state at her word on that. However, that situation cannot happen again, because that would mean that I would have to come in front of the committee with other matters to say that the Scottish Government did not want to make changes but had been forced into a position that it did not want to get into.

We delivered a public consultation, which I referred to in my opening remarks. The time constraints that we faced and the practicalities of moving forward made that very difficult.

With respect, given the live legal proceedings, I will keep my remarks to those general considerations.

It was built for a universal benefit—that is what it is for.

Mr Balfour, you and I have had many conversations over many years about the nuances of agency agreements. You and I both know that the agency agreement is to absolutely follow what the DWP does. There have never been any options for the Scottish Government to do anything different. That is not how agency agreements work, so we would not have got into that—

You raise an important point about benefit take-up in general. One of my first asks of the secretary of state was to do with take-up. I appreciate that the DWP has undertaken some work on that, and we have seen an increase in uptake, but we are still keen to see what more can be done.

As I said in my opening remarks, we, as the Scottish Government, are keen to play the role that we can in that regard, even though pension credit is not our benefit. Local authorities and others have played a role in that, too. In essence, I am very keen that the DWP does what the Scottish Government has done on that. For some time, the Scottish Government has had a benefit take-up strategy; we are the only country in the UK that has such a strategy. Take-up of pension credit is important, but take-up of other benefits is also important, which is why having a wider take-up strategy is important.

I will make just a couple of points.

We need to be really clear about what happens with consequentials. The fact that a secretary of state says that something might happen in July is not an appropriate basis for our deciding how to use that money, because, as you have said, convener, one budget might go up while others go down, so—

Ms Clark might agree with that principle, but she might want to check with everybody else in her Scottish Labour parliamentary group to ensure that nobody double counts the consequentials that we get and asks us to spend more.

Members might all agree on that aspect with regard to the consequentials, but—and I am speaking from bitter experience here—other members might well raise other aspects, and we will get asked to spend money more than once. That is not how we make a budget. I acknowledge that Katy Clark and Paul O’Kane in particular have been consistent on this issue, but, year after year, when it comes to, say, in-year adjustments or some other budget, we get calls to spend more money than we have. That is why I am sceptical. That said, I am, of course, happy to work with members, and I have heard the suggestions that have come forward.

Deputy convener, if you will bear with me, I will just bring up one other issue. All social security systems are built to deliver the Government’s policy intent, and I ask the committee to give some thought to exactly what it is asking this agency to do. Mr Balfour has said that he is disappointed that the system cannot deal with flexibilities, but how many flexibilities does the committee want us to build into it? We might have wanted to target the payment—or somebody else might have wanted to, even if we did not—but should it be targeted on the basis of age, benefit entitlements or whether a person is in a couple or is single? Do you want us to target it on the basis of geography or income levels?

There are many variations that we could, theoretically, have built into the system at great cost, but I have no doubt that, when we came back before the committee, Mr Balfour would, rightly, be challenging us on why we spent money building a system that did something that the Government did not intend to do. After all, the possibilities and variations are almost limitless. If that is the type of system that Mr Balfour wants, I have to tell him that that is not how our social security system is built, nor is it how any other social security system is built.

Let us be really cautious about the practical challenges and costs involved in the suggestion that the system must be more flexible. It has to be built with specifics in mind. I have given but a few examples of how we could build a system that dealt with theoretical changes that might or might not happen in the future under a different Government, and all of them would have been a waste of public resources.

Thank you, convener, and good morning.

Just weeks before our original regulations were to be laid in Parliament, the United Kingdom Government announced a significant change in policy that had a devastating consequence for our delivery of a universal benefit. Nevertheless, these regulations mark a significant milestone in the delivery of our winter heating benefits, following the introduction of our child winter heating payment in 2020 and our winter heating payment, which replaced the UK Government’s unreliable cold weather payments last February. Although the provisions that are laid out in the regulations are not what I had expected us to be delivering, they will help ensure that vital support for this winter’s fuel bills is available to eligible pensioners who will otherwise be without support.

My officials engaged extensively on the proposals for delivery of our universal benefits, and we received a record number of responses to our consultation, with more than 900 individuals and stakeholders taking the time to provide their views on the delivery of the benefit, now and in the future. Given the late notice of the UK Government’s decision and the timescales for delivering the benefit, it has not been possible to engage further on the revised policy.

The Scottish Government acknowledges that there are other pensioners who are likely to face financial difficulty and who would benefit from this support. However, given the significant reduction in the funding that we expect to deliver the pension-age winter heating payment, it is no longer practicable to deliver the benefit on a universal basis. We will continue to call on the UK Government to reverse its decision to means test winter fuel payments and to reinstate the payment for all pensioners, and I have committed to keeping the eligibility and the scope of the pension-age winter heating payment under review, to ensure that, where possible, we maximise the benefit’s impact.

Our focus now is on ensuring that eligible pensioners receive the support that they are entitled to this winter. It is no longer possible for Social Security Scotland to deliver the benefit this year and, therefore, the Department for Work and Pensions will deliver it on our behalf under an agency agreement. Although Social Security Scotland will have no role in administering the pension-age winter heating payment this winter, officials have been working closely with the UK Government to ensure that the DWP is prepared to deliver the functions required of it under the Social Security (Scotland) Act 2018.

In Scotland, we actively encourage people to apply for the benefits that they are eligible for and strive to make applying as easy as possible, with support every step of the way. Although pension credit, which will be central to increasing take-up of our new winter heating benefit, is a reserved benefit and therefore Scottish ministers have no official role in administering it, my officials have been engaging with a number of stakeholders to help raise awareness of the link between pension credit and the entitlement to the pension-age winter heating payment. That will ensure that we can reach as many people as possible this winter.

Under the regulations, pensioners in Scotland in receipt of a relevant benefit will automatically be paid £200 or £300, depending on their age. I am immensely grateful to the members of the Scottish Commission on Social Security for giving their time and engaging constructively with officials on the draft regulations shared with them in April, and for agreeing to scrutinise those regulations retrospectively. Wherever possible, we will always aim to give sufficient time for scrutiny ahead of laying regulations, but in these circumstances, that has not been possible.

I welcome the opportunity today to assist the committee in its consideration of the regulations.

As I alluded to in my opening remarks, the UK Government’s changes to winter fuel payment eligibility will reduce the Scottish block grant by an estimated £150 million in 2024-25. That is more than 80 per cent of the cost of the Scottish Government’s replacement benefit. Particularly given that the chancellor’s late decision was taken without notice, despite officials from both Governments working closely on the social security programme, the financial constraints and the lack of prior consultation with the Scottish Government mean that ministers have reluctantly concluded that eligibility must be restricted to those in receipt of a relevant qualifying benefit.

You raise an important point. Many organisations and different parts of Government have done what they can to increase take-up of pension credit, and I pay tribute to councillors and to the many MSPs who have done their own proactive work to encourage their constituents to come forward and claim what they are eligible for.

We have always known that the uptake of pension credit was challenging and that it needed to be increased. I am delighted that councils have responded proactively and encouragingly to the situation that we are in this year. I thank them and everyone else who has been involved in that work, including the many organisations, third sector charities and so on that have done their utmost to increase the uptake of pension credit.