WELFARE reform has been a key focus of the campaign for Scottish independence. Yes campaigners see the UK government’s welfare reforms – symbolised by the bedroom tax – as symbolic of all that is wrong with the Union, and an opportunity to mobilise support for independence.
And yet, the report of the independent Expert Working Group on Welfare raises questions about how different a Scottish welfare system under independence might be, at least in the early years.
The report recommended that the Scottish and UK governments work together, in the spirit of the Edinburgh Agreement, to deliver pensions and benefits on a shared arrangement basis for a transitional period.
The rationale underpinning the recommendation is sound. The bodies delivering public pensions and benefits are all under the control of the UK government, but they are scattered across the UK. Most – though not all – benefits applied for by Scots are processed in Scotland. But offices in Scotland also provide this service to claimants in England. The Child Maintenance Service, based in Falkirk, processes applications for the north-east of England. Scottish-based Department for Works and Pension (DWP) centres deliver working-age benefits for applicants in Yorkshire, the north-west of England and London. There are clear advantages – in terms of continuity of service to those dependent on welfare benefits and job security for those who deliver them – to shared service agreements even after independence.
But this would surely come at a price. Put simply, the greater the interdependencies and continuities, the less scope there is for doing things differently. Social security may be delivered across the UK, but the system itself is deeply integrated. Corporate functions and IT systems are managed centrally. Service delivery is dependent upon an integrated payment and accounting system run by the UK DWP. This core engine at the heart of the system calculates benefit entitlements based upon a UK policy framework.
Such a system can accommodate relatively minor modifications, as in Northern Ireland. Social security is devolved in Northern Ireland, but it conforms closely to the system designed for the rest of the UK. This is linked to the pre-occupation with maintaining parity in entitlements, and retaining the Treasury subvention that comes with it.
But the UK government’s welfare reforms have provoked debate about how far Northern Ireland can go its own way. Intergovernmental agreement will permit special arrangements around the delivery of payments – for example, to split payments within a household, provide bi-monthly payments, or payments direct to landlords. Even these minor changes require the design of a separate IT system for Northern Ireland to intercept with the core system once entitlements are calculated.
The Expert Working Group suggested that shared arrangements should be capable of accommodating any preliminary policy changes a Scottish Government might want to introduce. But beyond tweaking the template, as in Northern Ireland, it is not at all clear how this might be achieved. How, for example, would the removal of the underoccupancy penalty on housing benefit – the bedroom tax – affect the maintenance of an integrated system of processing and delivery? In practical terms, it would be extremely difficult to share the administration and delivery of services in the context of markedly different entitlements north and south of the Border.
Shared arrangements for delivering benefits might be sensible in the short term, but independence ought to provide an opportunity to do things differently. The challenge facing the Scottish Government is to present a vision of a new welfare system for Scotland’s future.
• Dr Nicola McEwen is Director of Public Policy at the Academy of Government, University of Edinburgh, and ESRC Senior Scotland Fellow. Her ESRC fellowship explores the opportunities and constraints of shared services and cross-border intergovernmental arrangements under independence.