The Chancellor’s spending review announcement of a savage budget cut in the next financial year will lead to the Work Programme’s eventual abolition in 2017.

The effect on Scotland’s ability to help people into work, grow its economy and diversify its workforce, will be devastating.

Under Smith, the agreement had been to devolve employability funding and services. But in ending the Work Programme, George Osborne has effectively pulled the plug.

Now, Scotland is left with a black hole as it attempts to overcome the challenge of how it can develop meaningful services to help those who need support into work.

All in all, it’s a pretty terrible situation. But how has it been allowed to happen?

The Work Programme, once the pride and joy of the UK government, has always been deeply unpopular and largely unsuccessful in Scotland.

But by ending the Work Programme, as well as the Work Choices scheme which provided specialist support for people with disabilities, Osborne has left the Scottish Government with mere scraps to work with. Having planned services based on the expected figure of £100m, Holyrood will now only receive £7m.

In short, the employability deal brokered by the Smith Commission might as well be dead.

With the UK Government in control of Job Centres and Universal Credit, it will continue to hold all the cards, and its punitive approach will further harm some of our most vulnerable people.

The employability deal brokered by the Smith Commission might as well be dead

As well as flying in the face of the Smith agreement, the Chancellor’s behaviour is a clear breach of its no detriment principle that neither the UK or Scottish governments should suffer financially from policy decisions made by the other.

Scotland needs to set up its own social security scheme to deliver the benefits of further devolution and construct employability services. The Scottish Government had prepared for this by having extensive consultation with stakeholders.

Sound principles were published, echoing what the third sector had stressed about the need to maintain dignity and respect for individuals, providing efficient services that give value for money, and investing in the people of Scotland.

Unfortunately, however, without the full devolution of welfare and the integration of services, we are faced with setting up a more confusing and complex system for people. And the potential for it to cost more than is necessary should not be under-estimated.

The on-going discussions between governments on the fiscal framework are, of course, critical to what happens next.

Whatever happens, we must fight for the right package for Scotland’s public services, current and new, and most importantly the people who use them.

Looking back to the early days of the Smith Commission, I remember hearing optimistic words about how it represented the end of things: here was an enduring settlement to give the Scottish Parliament the powers and resources it needs to do the job properly.

Many other, and in the light of what we now see, more canny observers of the Smith Commission, had quiet reservations about the whole process being a closed-door deal with politicians trading powers for advantageous sound bites. Citizens and their experience of public services seemed nowhere to be seen.

What the people in Scotland are now left with is beyond insulting. We deserve better and everybody knows it.

For this reason the Scottish Government should refuse to sign up to the fiscal framework until Scotland’s citizens get what they were promised in good faith under the Smith Commission.