A Scottish Social Security Agency

Alex Neil has announced, for the Scottish Government, that a new Scottish Social Security Agency will be established to administer the benefits that are being transferred to Scotland, along with any new benefits.  The rationale for the decision is given in a document reviwing the options.  This is the obvious decision, and a sound one.  It will make it possible to negotiate terms at national level, to develop the expertise that benefit administrators need and to adapt policies as circumstances change.

I’d be more concerned about an approach which is outlined in the report, which is a commitment to undertake the appraisal of future options in terms of cost-benefit analysis.  This, the report claims, is “the most robust and comprehensive way of comparing a set of policy options, as it also takes into account and monetises the most significant non-financial impacts.”  This was probably included to assure the Treasury of the government’s economic competence, but it comes with complications all its own.  CBA tends to over-weight the problems of people on higher incomes, which is why distributional multipliers have to be used.  Multiple or widespread smaller problems can outweigh serious issues that affect only a few people.   And it can be used to disguise the implications of policies, rather than to reveal them – just look at what’s been offered in the business case for Universal Credit.   We need a system of appraisal that focuses on the other issues that the Scottish Government and Parliament have rightly identified – dignity and respect.  The crude utilitarianism of CBA could lead us away from that.

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