Our paper on devolving welfare, snappily entitled Devo More and Welfare, is now available on the IPPR website here.
Our concern in making these proposals has been to formulate workable proposals which preserve important parts of the UK and its ‘social union’ as it presently is. There’s a lot of material in the paper discussing this, and why risk-sharing at a UK level is in the interests of all parts of the UK. Constraints also arise from the existing pattern of welfare spending and the structures that support that – the role of the National Insurance fund when it comes to contributory benefits, for example. However, we think it would be wrong to treat that social union as rigid; sharing risks for big things like old age or unemployment doesn’t mean other things can’t and shouldn’t be changed. We argue for recognition of the role of devolved governments when it comes to providing welfare benefits, bearing in mind the large role they already play in providing public services that are part of the welfare state – an approach we call ‘welfare pluralism’.
We endorse, broadly, changes in three areas. First, housing benefit should be devolved, given how closely it is linked to the devolved function of social housing. This would enable devolved governments to improve housing policy, by joining up housing benefit with already-devolved functions, and giving them more flexibility in how they invest in providing social housing.
Second, we support devolution of functions where this will improve social investment. This applies to two areas in particular: the Work Programme and welfare-to-work, and childcare. Devolving the Work Programme would involve a form of executive devolution, with Job Seekers Allowance and Employment Support Allowance remaining paid on a UK-wide basis. Childcare powers are already in devolved hands; the question is how that should be funded, and here fiscal devolution (as we recommended in Funding Devo More) addresses the problem. Devolving the childcare element of the Working Tax Credit would support this.
Third, we support a power for devolved governments to supplement UK level welfare, and removing existing legal restrictions on devolved governments providing cash benefits, provided they do so within devolved resources. This would certainly simplify action like that taken by the Scottish Parliament to redress the ‘bedroom tax’/spare room subsidy, and would enable a much wider range of possibilities for devolved governments that wished to undertake them.
Welfare devolution should not simply be about handing over more powers to devolved governments. It is about improving how devolution works, but even more importantly about improving social outcomes across the UK. This can produce benefits for all; it is about a win-win game not ‘making concessions’. It is also for all devolved governments; what we propose would be as applicable in Wales and Northern Ireland as in Scotland. It is also, importantly, about responsibility; in particular, we argue that fiscal devolution is a necessary prerequisite before devolution of welfare functions can take place.