With the coming abolition of the Social Fund, local authorities might be expected to do something to fill the gap. Local authorities used to offer loans before the introduction of the Social Fund in 1988. Local government in Scotland now has a general power to promote well-being, and I have to confess that I had blithely assumed this power would make it possible to develop alternative systems for delivering financial assistance. The recent debate about the powers of the Scottish Parliament has prompted me to rethink.
Under the 1998 Scotland Act a range of powers were devolved to the Scottish Parliament, with a large number of explicit exclusions. In 2000 the UK Parliament devolved additional powers to English and Welsh local government, including a general power to promote well-being (Local Government Act 2000, s 2). The promotion of well-being includes a power to “give financial assistance to any person” (s 2 (4)). In 2003 the Scottish Parliament followed suit, creating a general power to promote well being. The 2003 Local Government in Scotland Act grants Scottish local authorities the same powers (s.20), using the same wording as the Act for England and Wales.
However, the Scottish Parliament does not itself have these powers. It is expressly denied that role by the definition of reserved powers in the Scotland Act. So, it cannot make provision for “Schemes supported from central or local funds which provide assistance for social security purposes to or in respect of individuals by way of benefits.” (Scotland Act 1998, schedule 5 F1) If the Scottish Parliament did not itself have a power to give people financial assistance, it could not have granted that power to local authorities – the only authority could have come from the UK Parliament. If that is right, it is possible that English and Welsh local authorities now have a power that the Scottish Parliament and Scottish local authorities do not.
Further note, 15th February 2011. The Scotland Office has written to say that they will be addressing the issue of competence in the legislation to ensure that the necessary powers will be in place. That should resolve the specific issue with the Social Fund, but it may recur in other fields if the general issue of competence is not addressed.