SNP ministers have handed an eye-watering £35million contract to a firm in India to manage Scotland's benefits handouts.
The IT firm – based in Bangalore – will control the software that people use to apply for benefits, track their applications and make sure their details are up to date.
The move comes after the Scottish Government was allowed to set up Social Security Scotland to deal with benefits. Previously, welfare payments for Scots were handled by the UK government's Department for Work and Pensions (DWP).
But instead of retaining the DWP's IT set-up, John Swinney paid for a new system to be installed, which will now be managed by Indian firm Mphasis .
It also comes after we revealed last week that the SNP's freebie schoolbags for primary ones will be made in China, supplied via a company headquartered in Manchester, at a cost of £2.7million over two years.
Last night Harriet Cross, the shadow Scottish secretary, said: 'Taxpayers will be shocked to learn the SNP are sending millions overseas to prop up their ballooning benefits bill.
'The SNP's light-touch system is putting Scotland on course for a benefits bill that could hit £10 billion a year – while families are paying higher taxes and public services are crumbling.'
The £35million Social Security Scotland contract given to Mphasis is for running the Social Program Management (SPM) benefits platform.
John Swinney has insisted India is a source of untapped investment for Scotland
Shadow Scottish Secretary Harriet Cross has criticised the 'ballooning' benefits bill
The First Minister claimed on a visit to India that there was 'untapped economic potential' for Scotland via foreign investment from Indian companies.
Days after John Swinney's visit he welcomed a £6million investment by Indian firm Sarva Foam in a Scottish recycling plant, boasting that it would deliver 'green jobs' in Scotland while failing to acknowledge the £35million in taxpayers' cash flowing the other way.
Opposition parties have questioned why the Scottish system has been outsourced abroad, comparing the latest move to the commissioning of ferries overseas or buying buses from China rather than from Scottish firms.
Scottish Labour's social justice spokesman Mark Griffin said: 'We should be using public contracts like this to boost local business and the Scottish economy and create jobs in Scotland.
'All too often under the SNP good work has flowed overseas – from buses built in China to ferries built in Turkey. This seems like another example of it.
'SNP ministers should explain why this decision was made.'
Mr Swinney has often praised Scotland's technology and artificial intelligence (AI) sector and said he wanted to see it expand.
In March, ministers even published 'Scotland's Artificial Intelligence Strategy' which sets out how the government wants to grow the sector, stating it planned 'to harness the potential of AI to drive responsible and inclusive growth across our economy and make a positive difference at every level of society.'
In May, Mr Swinney told MSPs that a technology startup programme was to be expanded in Scotland, saying: 'This new technological revolution is made for Scotland to succeed in biotech, space, precision engineering, fintech, and more.'
Mphasis describes itself as an 'AI-led, platform-driven company with human-in-the-loop intelligence'.
The firm said the £35.4 million contract would keep the SPM system 'stable, resilient and reliable' to make sure 'people can continue to access the support they are entitled to without disruption'.
Mphasis is based in Bangalore, India, and will manage the benefits system for Scots
Their work 'is also intended to improve the platform's operational efficiency and reduce the risk of disruption from major incidents.'
The SPM platform handles benefit applications, eligibility decisions and payments for up to two million Scots, according to Mphasis. It comes after the Nats government was mocked earlier this month for announcing it wanted to increase the take-up of benefits in Scotland, when the number of people receiving some payments is already at a record high.
Ashish Devalekar, Executive Vice President at Mphasis said: 'Our ongoing relationship with Social Security Scotland allows us to continue to support one of the country's most critical public service platforms, and our commitment is to maintain continuity, improve operational efficiency and deliver meaningful outcomes for individuals and families across Scotland.'
A Social Security Scotland spokesman said: 'Contracts are awarded in line with the Scottish Government's procurement guidelines, which state that bids are to be treated equally regardless of the location. This ensures that we award contracts to the bidder offering the best overall value.
'Investment in technology ensures we are future proof and adaptable to changing demands for our payments, while delivering support reliably and securely to people across Scotland.'
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