PRIVATE companies will be barred from involvement in assessing people for benefits under the new Scottish social security agency, it has been revealed.

Social Security minister Jeane Freeman told MSP's profit-making should not form a part of decisions about people's medical capability or making decisions about whether they qualify for help.

The Department for Work and Pensions has employed first French firm Atos and latterly American privatisation specialists Maximus to carry out work capability assessments. Both firms have faced criticisms from campaigners.

Ms Freeman said the new system would make faster, fairer decisions and offer face-to-face assistance to those seeking 1o of the 11 benefits over which the Scottish Government is to received devolved control. Local councils will continue to administer Discretionary Housing Payments and the Scottish Welfare Fund

Outlining the plans to Parliament, she insisted an enhanced service could be more humane yet still be efficient, with annual running costs estimated at £150million.

It the Scottish social security agency is to have a central headquarters, but will attempt to provide a local presence across Scotland, often by sharing premises with existing public sector agencies. The location for its HQ will be decided in the autum, but Ms Freeman said the new agency would employ at least 1,500 staff - making it, overnight, one of Scotland's largest government executive agencies.

Ms Freeman said: “One of our fundamental principles is that profit should never be a motive nor play any part in assessing or making decisions on people’s health and eligibility for benefits.

“We are building a system based on dignity and respect – this means an assessment process which isn’t demeaning or deliberately difficult.

“I am very clear that assessments should not be carried out by the private sector."

She said the agency would have a local presence and a human face so that people could get one-to-one support.

“Setting the new system up is a hugely complex task but a challenge that we relish and one that we are absolutely determined to get right,"" she added. It is extremely important that we start how we mean to go on – by listening to people and seeking expert opinion."

The agency will administer benefits worth around £2.8 billion in annual payments, including carers' allowance, Sure Start maternity grants, cold weather and winter fuel payments, and a number of disability benefits including Personal Independence Payments and Disability Living Allowance.

However Ms Freeman claimed "too much" of the system remained reserved to a UK system blighted by "deficiencies and faults".

but too much remains reserved and will continue to be delivered in a UK system that has all of the deficiencies and faults our consultation responses so eloquently detail.