SCVO Briefing: Scotland Bill 2nd Reading

Introduction

SCVO, as the umbrella body for charities and voluntary organisations in Scotland, takes a strong interest in policies and legislation concerning Scotland’s future, primarily as these often have an impact - positive and/or negative - on the people and communities our members work with. As it stands, the Scotland Bill fails to recognise the sea change of opinion in Scotland and the wish for further devolution.  The third sector’s primary concern is that the process being undertaken remains closed and top down, with no avenues for people and communities to have any real say in how these powers are shaped. Charities and wider civil society (who work with those who will be affected by the proposed changes), while appreciating the efforts of Lord Smith to engage more widely, nevertheless feel that the Commission failed to acknowledge to the sector's aspirations for devolution. In addition, it is felt that the wishes of people affected by further devolution have been ignored by the Westminster government. Despite the extensive evidence of how current policy has devastated people’s lives, we remain concerned that any further devolution – as shaped by the clauses – will not enable us to repair some the damage already being done. Our message to MPs is this - if we want to deliver lasting and effective devolution, it must be driven by people not politicians.  This applies to all communities across the UK as much as it applies to Scotland.

Overall assessment

Our view is that the current timetable and process for the Scotland Bill is flawed because it is rushed and excludes the opportunities for people to engage directly in this important constitutional legislation. Whilst the commitment of the Scottish Government to engage people widely on how the new powers will be implemented is commendable, the current top down process of engagement ultimately limits the scope and ambition that could drive the very nature of the powers being debated. It is therefore likely this process will not serve people well. There must be opportunities for the public to directly influence the process and contribute their views on legislation which changes the way their country can be run and the services which touch people’s lives.   We urge Scottish MPs to go back to their constituencies to gather views and knowledge to shape the debates to come, and political parties must open up their own processes to involve people affected in shaping their amendments to the Bill.

Scotland Bill - Specific points

• As evidenced in SCVO's response to the Smith Commission,  it was clear that many in the third sector would like to see the full range of welfare powers (except pensions) devolved to the Scottish Parliament to enable it to design and implement its own, more compassionate and empowering system.
• The Scotland Bill’s provisions for welfare powers prescribe tight parameters which potentially limit the policy options available to the Scottish Parliament. We note that the new powers, despite the ability to top-up reserved benefits, will not allow the Scottish Parliament to mitigate against the punitive sanctions regime.  Indeed, Clause 21 may well reduce the current flexibilities which have allowed the Scottish Government to mitigate some of the effects of conditionality through the Scottish Welfare Fund.
• The Bill imposes definitions of key groups including people with disabilities and carers. This is creating concern as it again limits the ability of the Scottish Government to seek alignment to existing Scottish provision and to create more holistic support for people with disabilities and their families. The Expert Working Group on Welfare provided a route map for this endeavour.
• We would like to see the immediate devolution of all powers over supporting people into employment to the Scottish Parliament. As agreed under the Smith Commission, all employment programmes currently contracted by DWP should be devolved without exceptions such as Mandatory Work Placements and without limiting conditions such as length of programme or those who might be eligible for such support.
• Despite the introduction of a consultation phase, concern about the potential abolition of the Human Rights Act is echoing across the third sector and civil society. On a linked point, we remain concerned about further welfare cuts and the impact this will have on any final settlement which comes to Scotland.  The effect of the Scotland Bill as it stands may be to limit the ability of the Scottish Government and Parliament to develop a better approach to social security – one driven by the rights and principles within the Human Rights Act and the UN Conventions.
• There is no provision to address the impact of the income tax proposals on Gift Aid as the legislative process develops. Waiting until anomalies become untenable is not a sensible strategy. We provide a technical note at the end of this briefing, given that this issue is of particular concern to how the third sector in Scotland operates.
• We are concerned that the Bill’s provisions may unduly limit the ability of Scottish Ministers to legislate with regard to equality issues as agreed under Smith.
• Evidence to the Scottish Parliament’s Devolution Committee makes it clear that a simpler approach to devolution of the Crown Estate should be investigated. Regardless of the legislative approach adopted this should facilitate the transfer of Crown Estate assets and revenues to community bodies.

Conclusion

It is clear that a lot of work will be required to transform the Bill proposals into coherent and effective legislation. As the devolution process proceeds, it is vital that the UK Parliament pushes for further discussion with the people of Scotland. The Scotland Bill, as presented, is deeply flawed. We must never lose sight of how these clauses may directly affect the lives of many people and communities – and of their potential, if better crafted, to mark a new direction for Scotland, particularly in relation to the welfare powers. The Scotland Bill process has shown markedly that the debate around further devolution – to Scotland, to cities and to other home nations – has been limited to the political sphere.  It is a weaker debate because of that, as it doesn't take fully into account the challenges in relation to inequality, the economy and labour market facing the UK.   What matters to people must shape the next stages of devolution.

Technical note: income tax and Gift Aid

Gift Aid needs to be considered alongside the devolution of income tax. Gift Aid is a relief on income tax that benefits charities and community amateur sports clubs (CASCs). Last year Gift Aid provided over £1 billion to the sector in the UK. Although the issue of Gift Aid is not covered in the draft clauses, income tax is. Therefore Gift Aid is clearly a practical issue in relation to the draft clauses on income tax that needs to be addressed. If income tax rates were to differ between Scotland and the rest of the UK, and Gift Aid continued to be a direct relief on income tax, then there would be complications for charities and CASCs, and for donors. Yet at the same time, it is an important principle that Gift Aid reliefs remain connected to the tax paid by the donor, and outside the vagaries of public spending cuts. The trust that donors have in ensuring all their donation goes to the charity they support is paramount. How all of this will operate within the new fiscal framework is clearly a complex matter, and we hope to see some solutions proposed that will make it as straight-forward as possible for our members to stay within the law, to claim what they are entitled to, and to ensure that organisations retain the trust and confidence of Scottish donors. SCVO has been working closely with the Charity Tax Group on these issues, and would welcome further discussions with the UK and Scottish Government to ensure the implications for Gift Aid are given appropriate consideration. For more information on this particular issue please contact us.

Contact

John Downie, Director for Public Affairs Scottish Council for Voluntary Organisations, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh EH3 6BB Email: john.downie@scvo.scot Tel: 0753 054 2263 Web: www.scvo.scot

About us

The Scottish Council for Voluntary Organisations (SCVO) is the national body representing the third sector.There are over 45,000 voluntary organisations in Scotland involving around 138,000 paid staff and approximately 1.3 million volunteers. The sector manages an income of £4.9 billion. SCVO works in partnership with the third sector in Scotland to advance our shared values and interests. We have over 1,600 members who range from individuals and grassroots groups, to Scotland-wide organisations and intermediary bodies. As the only inclusive representative umbrella organisation for the sector SCVO:

• has the largest Scotland-wide membership from the sector – our 1,600 members include charities, community groups, social enterprises and voluntary organisations of all shapes and sizes
• our governance and membership structures are democratic and accountable - with an elected board and policy committee from the sector, we are managed by the sector, for the sector
• brings together organisations and networks connecting across the whole of Scotland

SCVO works to support people to take voluntary action to help themselves and others, and to bring about social change. Further details about SCVO can be found at www.scvo.scot.