The future of working practices in Scotland Contents

5Devolution and employment support

68.In the past the UK Government has been responsible for all employment support services—which aim to help people who are not currently in work to find employment—but, following recommendations made by the Smith Commission,136 the Scotland Act 2016 provided for the devolution of responsibility for the creation of employment schemes to assist those at risk of becoming long-term unemployed and help disabled people into work, including schemes which seek to help employers find suitable employees.137

69.As responsibility for these programmes has now been devolved the Scottish Government will receive an additional transfer of funds, based on what the UK Government spends on these services in England and Wales. In 2012/13—when it was agreed to devolved these responsibilities—spending on the programmes for which the Scottish Government is taking responsibility was approximately £53 million per annum,138 but the 2015 Autumn Statement stated that the UK Government would be focusing more on early intervention and therefore funding for the programmes which were to be devolved to the Scottish Government was being decreased. The UK Government’s new programme will have funding of around 20% of the programmes it is replacing,139 and in 2015 the then Secretary of State for Work and Pensions wrote to the Scottish Government indicating that the transfer of funds for these services would be £7–13 million per annum.

70.The Scottish Government has raised concerns about the affect cuts made by the UK Government to employment support have had on the level of funding transferred to the Scottish Government in respect of these services, stating that this will put severe financial restrictions on the ability of the Scottish Government to bring forward new programmes in these areas.140 The STUC and Disability Agenda Scotland have also raised concerns about the pressure funding for employment support programmes is under,141 and called for funding to be set at a level which is “commensurate with the challenges faced by disabled people getting into employment, and the return on investment that this could create”.142

71.Funding for employment support programmes is under significant pressure, and cuts to spending by the UK Government on programmes which have now been devolved to the Scottish Government have reduced the funds which have been transferred to the Scottish Government, which will have full responsibility in these areas. We recommend that, where the UK Government is planning to change spending in a way which will affect devolved funding, the Government engage with the devolved administrations at the earliest possible opportunity on implications for devolved policy. In the case of employment support programmes, we call on the UK Government to enter into discussions with the Scottish Government about whether there is a case for additional funds being transferred to Scotland to enable these programmes to be enhanced.

137 Scotland Act 2016, Part 3

139 House of Commons Library, Work and Health Programme, December 2016

141 Q852, STUC (SES0009)

142 Disability Agenda Scotland (SES0024)

2 March 2018