There is scope for localism in the welfare state

February 4, 2010

Chris Leslie, Director
Local Government Chronicle

Very few politicians have dared touch the idea of decentralising the welfare state, primarily because of its close affinity with UK citizenship and the potential pitfalls and undesirable consequences that could arise if handled incorrectly.

For instance, if unemployment benefit were to vary from one area to another, there could be a risk of ‘jobless tourism’, where people would move to areas paying higher rates.

There would also be a host of criticisms and perceived ‘injustices’ around the borders between differing areas, with neighbours in identical circumstances receiving different sums.

This issue falls right at the heart of the ‘postcode lottery’ question. It is one thing for a service to vary from area to area, but quite another for a cashable payment to do so, especially where that payment is supposed to be in substitution for earned income, rather than a marginal or insignificant amount.
Devolved

The concept of ‘new localism’, now well-discussed over the past decade, has always conceded that devolved powers need to operate within a framework of national minimum standards.

Perhaps it is the case that welfare benefits are better determined for the nation as a whole for practical reasons as well as on the grounds of fairness.

However, there are legitimate issues raised by Kent and others in this discussion.

For example, how else can a local authority be significantly motivated to deliver savings in social policy expenditure if the prevention of welfare dependency does not yield part of the future savings to that authority itself?
Decentralise

No local council is likely to work tirelessly on this area only for all the future benefits savings to accrue to the Treasury in London.

It might not, therefore, be necessary for a council to have powers to vary the level of benefit payment, but it might be a legitimate ‘ask’ to have future budgets delegated to councils for them to subsequently administer.

From my point of view, it would be far better to decentralise the accounting flexibilities on a greater array of benefits to councils so that the rigid divisions between ‘annual managed expenditure’ and ‘departmental expenditure limits’ that operate at the government level can be disentangled.

This would create more scope for preventative invest-to-save programmes that could make a real difference on the ground.

The public might not notice a difference in cash benefit levels, but they would certainly notice a proactive change in approach from the welfare state in general.


Explore More