Scottish independence: SNP welfare plan ‘a risk’

Nicola Sturgeon: Shared deal only in Scotland's interests if Ministers could change policy 'from day one of independence'. Picture: TSPL
Nicola Sturgeon: Shared deal only in Scotland's interests if Ministers could change policy 'from day one of independence'. Picture: TSPL
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THE SNP’s pledge to design a radically different welfare system in an independent Scotland would result in a “serious risk” of disruption to claimants, a Scottish Government-commissioned panel concluded yesterday.

The expert group set up by Deputy First Minister Nicola Sturgeon to look at the delivery of the welfare system in the event of a Yes vote in 2014, said there would be a “common interest” in maintaining the existing UK-wide benefits system in a transitional period that could last until 2020.

The report warned that an immediate split would create “serious risk to the continuity of payments” to claimants on both sides of the Border.

A fully autonomous welfare system in Scotland could take up to 2020 to set up, the group suggested. In the interim, it acknowledged that the “downside” of having to share services might mean that an independent Scotland could find itself “unable to implement some of its early priorities for change to the benefit system”.

That view was supported last night by leading experts on welfare policy who said it would be “extremely difficult” for Scotland to plot its own course on welfare within a UK set-up.

The conclusion triggered a fresh political row, with SNP ministers having already promised to get rid of unpopular benefit reforms, such as the so-called “bedroom tax” immediately if Scots vote for independence.

Ms Sturgeon said she “tended” to back the idea of a UK-wide administrative set up if the two countries separate. However, she argued that such a deal would only be acceptable if it gave Scottish ministers the power to change policy as they saw fit.

But UK government ministers said the SNP had their “heart set on the impossible”.

Scottish Secretary Michael Moore said: “They want to leave the UK and keep the UK welfare system. But they only want to keep the UK welfare system if they can insist upon immediate policy changes. Most people in Scotland will regard this as a self-defeating contortion.”

The expert group on welfare, set up by Ms Sturgeon earlier this year, also concluded that, despite the continuing programme of benefit reform, Scotland’s total benefits bill will continue to rise, from £18 billion to £19.7bn by 2017, due mostly to increases in costs of supporting older people.

It also revealed that many benefits for people in other parts of the UK are processed by UK government staff in Scotland, with an estimated 40 per cent of all claims processed in Scotland relating to claims made by people in England.

Most benefits paid to people in Scotland are administered from within Scotland’s borders, it added.

With such a high degree of cross-Border integration, the group’s central conclusion warned against an immediate split of benefits provision if Scotland backs independence.

The report stated: “Immediately separating these services would present serious risks to the continuity of payments to people in both Scotland and England and so a challenge for both an independent Scottish Government and a UK Government representing the interests of the remaining parts of the United Kingdom.”

After receiving the report yesterday, Ms Sturgeon said such a shared deal “makes sense”. She added: “I think it probably makes sense if you read the detail of this report more for the UK government than it does for Scotland given the dependence of the UK on the infrastructure that’s in Scotland.”

Last night, experts warned that such a deal could be out of reach, pointing to the administrative tasks that the Department for Work and Pensions and HMRC would be required to undertake to suit both countries.

Dr Nicola McEwen, University of Edinburgh academic and ESRC Senior Scotland Fellow, added: “Shared arrangements for delivering benefits might be sensible in the short term to make sure those in need are provided for.

“But sharing service delivery would act as a significant constraint on the policies that could be pursued under independence.”

Other academics have already argued that Scotland would have little real independence if tied into the rest of the UK (rUK) administration as agencies would struggle to accommodate two different systems.

The battleground is crucial within the referendum debate because the Yes camp has identified opposition to controversial welfare reforms led by the UK government as a pillar of its campaign.

With charities warning of the “catastrophic” impact welfare reforms will have on the economy, Yes Scotland campaigners and SNP ministers have sought to argue that independence offers a way out.

The SNP government’s expert group on welfare is now expected to write a second report later this year offering longer-term proposals. However, ministers are now under pressure to show how an alternative form of welfare provision to that being proposed by the coalition government can be afforded.

Yesterday’s report, chaired by Ernst and Young director Darra Singh, acknowledged that there was as yet no plan for a new Scottish system. It concluded: “We felt that this was difficult to suggest at this stage without an understanding of what principles would underpin the establishment of the welfare state in an independent Scotland.”

The lack of a vision was criticised by third-sector groups and opposition parties last night.

Martin Sime of the Scottish Council of Voluntary Organisations said: “The report, given its time constraints, fails to look in depth at how the current cuts to welfare and public services will trigger increased demand for support – we still desperately need a wide-reaching assessment of what welfare reform means for Scotland.”

In other findings, the report concluded that 8.9 per cent of UK benefits is spent in Scotland, ranging from 11.4 per cent for Incapacity Benefit to 7.6 per cent for Housing Benefit.

It also concludes that the total administration costs for benefits in Scotland is forecast to reach £700 million by 2017.

Alistair Darling, the leader of the Better Together campaign, said the report had shown the benefits of a UK wide benefits system. “The report admits that immediately breaking up this system would present serious risks to the continuity of payments in Scotland and the rest of the UK,” he added.

Doctors ‘have been vilified in media war’

GPs say they have been “vilified” after raising concerns over controversial changes to the benefits system which has left them flooded with additional work.

MSPs on Holyrood’s health committee will be told today that GPs are struggling to cope as patients seek support regarding benefit payment appeals.

A group of Glasgow doctors has urged GPs to refuse to write support letters amid concerns, but say they have been subjected to a “media war” over their concerns.

Despite concerns raised with Atos, the firm overseeing many of the changes, and MSPs, GPs say the increased workload has continued unabated.”

“We have seen absolutely no evidence or desire from DWP or Glasgow City Council to address this issue apart from unconstructive and pejorative statements made about GPs in the media by a number of services and departments,” the Glasgow Local Medical Committee states in a submission to Holyrood’s health committee.

A spokesman for Glasgow City Council said its priority throughout the welfare reform programme has been to support the people who are most vulnerable to changes.

He added: “We remain disappointed GPs feel unable to write these letters. However, a GP’s workload isn’t a council’s responsibility and the BMA really needs to take it up with the NHS, or the UK and Scottish governments.”

‘Landlords ignoring advice not to evict tenants hit by bedroom tax’

Social landlords in Scotland have ignored advice from SNP ministers not to evict tenants who fall into arrears as a result of the bedroom tax, MPs have been told.

The chief executive of the Scottish Federation of Housing Associations, Dr Mary Taylor, said housing associations could not risk losing finance from high-street banks by adopting the no evictions policy.

Dr Taylor told MPs that its members had to operate as businesses.

Appearing before the Scottish affairs committee in the House of Commons yesterday, she said: “Housing associations are independent social businesses and they use the rental income to pay the usual high-street banks loans, to build the houses and to repair their stock.”

She added: “Arrears are already increasing. They will very quickly get into a position where they are in difficulties. They will find themselves in difficulties with their lenders in the first place, and they will not be able to employ staff or pay for the repair of houses, which is why they exist.”

Margaret Burgess. the SNP housing minister at Holyrood, has encouraged housing ssociations and councils to follow the example of SNP-controlled Dundee council which has pledged not to evict tenants who fall into arrears because of the bedroom tax.

David Bookbinder, from the Chartered Institute of Housing in Scotland, said the SNP’s anti-bedroom tax policy did not rule out evictions. He said: “The minister commended the Dundee approach of having no evictions. But that policy when

clarified says that they will not evict when tenants are making every effort to engage in paying the rent. That is not strictly a no evictions policy.”