Should Universal Credit be stopped in Scotland?

Nicola Sturgeon, for the SNP, has written to the Prime Minister to ask that the roll-out of Universal Credit in Scotland should be stopped, anticipating the likelihood that Housing Benefit will be devolved to Scotland in the not too distant future.   The UK government has declined, saying that it’s business as usual and they don’t want to anticipate the Smith Commission’s decisions about devolution, due shortly.

The actual position in Scotland, according to the last statistical release, was that by the 14th August,  only 590 claimants were receiving Universal Credit in Scotland.   (They’re all in the Highlands, and I haven’t met any of them yet.)    Even if the numbers multiply exponentially from next April, which is what the DWP says will happen, this will still be a tiny operation for some time to come.  Ms Sturgeon can be pretty confident that Housing Benefit is going to be devolved regardless; it’s one of very few benefits which could be devolved without a substantial redesign of benefits in the rest of the UK.  The UK government knows it, too, but it wants to claim that Universal Credit is rolling out at a rapid pace.

It won’t be difficult to unpick HB from the small number of cases where housing costs are met by UC, but it’s an unnecessary complication.  I suspect that Ms Sturgeon is making hay by kicking up a fuss now, but she’s right in principle.  If it’s ultimately decided not to devolve any of the elements of Universal Credit – Tax Credit, JSA, ESA and Housing Benefit – there won’t be much left.  It’s going to be hard to identify which benefits can be devolved, and on what terms;  Attendance Allowance and PIP won’t be enough to satisfy the pledge.  If there was no real devolution of powers over benefits to Scotland, it would be a direct and immediate breach of the undertakings given by all parties prior to the referendum.



One thought on “Should Universal Credit be stopped in Scotland?”

  1. As you say Paul, you could unpick housing support from Universal Credit, as has happened with supported exempt accommodation, but it leaves the question of what do you do then. That unpicking works only because the housing costs are met from a different budget by local authorities.

    It’s clearly not possible to run Universal Credit and HB side by side without any linkage – you’d end up with two 65% tapers and a loss of £1.30 for each £1 net increase in income. For current non-FT work MTBs there is a passport to full HB where a benefit is received but Universal Credit is an in-work benefit too. Passporting to full HB for those in receipt of any Universal Credit would be far too generous. It might be possible to do something analogous to the the Disabled Facilities Grant assessment in England and Wales, where the grant is passported to those receiving tax credits on earnings under a certain amount but that creates a potentially huge cliff-edge. It may be necessary to create a multiple taper version of HB – one for non-Universal Credit cases and one for those getting Universal Credit. Where then though is the devolved power? The combination of Universal Credit only, Universal Credit plus HB and HB only (with allowances for age, children, disability etc.) does not make this simple, even without the cross-border issues.

    The new national ‘roll-out’ in early 2015 may very well be an aspiration in the light of Westminster proposals for welfare devolution and I suspect that there is some very serious head scratching going on inside the DWP at the moment (Advert – our Future Benefits Model is available at very reasonable rates to assist).

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