I missed it when it came out at the beginning of this month, but an interesting report from the Scottish Public Health Observatory has been trying to identify the possible impact of new benefit policies in Scotland on the health of the population. The figures are complex, but the basic principle behind them is reasonably straightforward. Their argument is built on the case that higher income leads to fewer deaths and less health inequality. Effectively, then, their report is an assessment of the potential distributive impact of different policies in Scotland. Critically, however, the distributive impact they are considering is not the distribution for individuals or households, but for deprived areas.
Part of their summary is a fairly confusing graph, which seems to suggest that the best method by far would be to increase means-tested benefits by 50%. The comparison being made, however, is with other policies with very different sizes and shapes – for example, increasing takeup by 1% (a very marginal increase, costing little) or introducing Citizens Basic Income and abolishing all other benefits (a very major change, costing a great deal). The details about what’s covered and what’s not are sketchy, and the figures are, of course, indicative rather than certain. The core of the message is this:
increasing means-tested benefits by 50% is modelled to have the biggest effect on reducing premature mortality (5% prevented) and narrowing inequalities in premature mortality (-8%). The results also suggest that the real Living Wage, Local Income Tax and increasing devolved benefits by 50% would be good policies for reducing premature mortality (~2% prevented for each). The two illustrative CBI schemes are also likely to be effective at narrowing health inequalities (-4% for CBI, and -6% for CBI Plus).
In the supplementary papers, Table 2a, it’s possible to find a statement of costs per outcome. This also needs to be treated with caution, because the costs of CBI cannot be introduced in part; but the best value for money, in the sense of effect for each pound spent, comes from CBI , improving DLA and PIP, increasing takeup and increasing basic means-tested benefits. The powers of the Scottish Parliament don’t cover all these options, but they do include powers to improve disability benefits and to increase takeup. There’s a case to consider, but there has to be a major reservation: at the level of individuals and households, there would be losers among those who are poorest.
Funeral payments are being devolved to the new Scottish social security system. The current arrangements are more than a little haphazard. The means-tested Funeral Expenses Payment covers some of the basic expenses (typically not all), but the scheme administered by the DWP has some of the worst features of any means test in the system. It calls for information about the deceased person’s estate, the funeral, the means of the applicant, the relationship between the claimant and the deceased person, and the position of other family members who might bear the costs instead. Only half the people entitled get the benefit. The average funeral expenses payment, successfully claimed by less than 4500 in Scotland, is a little under £1400.
A consultation document on arrangements for funerals in Scotland has given me some material to think about. There are about 58,000 deaths in Scotland every year. Currently 68% of people are cremated, at an average cost of £738 for the cremation itself, and 32% of people are buried, with an average cost of £1428 for the burial; but the fees vary from £586 to £870 for cremation, and £705 to £2,340 for burials.
Funeral arrangements can cause dreadful hardship. Some relatives walk away; some funerals are left to public authorities to arrange. Others find themselves with a large bill, about £3600 on average. Abolishing fees would not be cheap; on these figures, the bill would come to something like £56m a year, less £3m saved on Funeral Expenses Payment. And it would not be completely straightforward, because there are 15 private crematoria and numerous private cemeteries in Scotland. Many of the true beneficiaries would be people who are inheriting from an estate. But this is an area which affects everyone, and where it’s in everyone’s interests to make collective arrangements to manage a major foreseeable expense.
The Corporate Plan published by the new agency, Social Security Scotland, is brimming with good intentions. Under the agency’s name is the motto: dignity, fairness and respect. The key to this rests in how the agency deals with mistakes, and there will be mistakes: introducing complex systems for people with complex problems to resolve makes that inevitable. There are some good signs: a commitment to resolving issues “resolved quickly and at the point of contact”, listening, and ‘continuous improvement’, using feedback to improve the quality of services. The problem, however, rests in a bitter legacy of conflictual, adversarial approaches to managing agency mistakes. Several elements of the new system create hurdles to overcome: mandatory ‘re-determination’ (the decision should have been checked anyway on first complaint), referral out to the Scottish Public Services Ombudsman (another hurdle), and heavy reliance on the appeals structure. This may all work work against speedy and effective resolution.
To my regret, I’ve not made the shortlist for the Executive Advisory Board of Social Security Scotland. It’ll be interesting to see what the background is of the people they do appoint.
A short research note from the James Hutton Institute offers a gloomy prediction for the future of Scotland’s remote areas. About half the country is sparsely populated, in the sense that it takes a journey of more than 30 minutes to reach places where 10,000 people live; large parts of the country are, more or less, wilderness. Low populations mean limited development, limited opportunities and limited services – schools, banks, supermarkets and fuel have to have a population base to justify their existence. The projected populations of the islands and Argyll and Bute are expected to fall by a third; the population of the Highlands is likely to fall by a quarter.
Lesley Riddoch offers a splendid piece in the National, crackling with ideas about the kinds of things that could be done to help remote areas. The article’s not helped by a headline that suggests a different kind of content, but Riddoch’s article points to to issues including energy, land ownership, housing, communications, and local governance. I know that some people will question whether human beings ought to be allowed into empty and wild spaces, but we need to question the wisdom of allowing half a country to wither away.
I’ve just shared a brief interview on Good Morning Scotland with Jim McCormick, of the Joseph Rowntree Foundation. Jim has prepared a report called A Scotland without poverty (not to be confused with a Poverty Alliance report of the same name) proposing a ‘leadership strategy’ to develop effective anti-poverty policies. The main proposals include an extension of free child care to 15 hours a week, getting more people into work and building career ladders, more intensive employability support, improving housing conditions, extending financial inclusion, improving takeup and taxing Winter Fuel Payment.
This is much too limited. The first problem is that it doesn’t address the principal conditions shaping the lives of people who are poor, which are not about work – they mostly affect people who are not part of the labour market, including long-term sickness, disability, childhood and old age. There are very limited responses to two of those , and even less about the first two. The second problem is that for those who are engaged with the labour market, work is too insecure and unpredictable to build resources. Work is not the answer. Even to reduce poverty, we need to ensure access to the conditions of civilisation – the phrase is Tawney’s – with a secure foundation of health, education, housing and public services. Even within the limited framework of devolution, those are indeed issues that a Scottish Government could address.
The weakness of that comment is one it shares with the Rowntree report. Jim refers to a ‘leadership strategy’ – a strategy issued from on high – and I have just done the same thing. Poverty is a difficult, complex, multifaceted set of issues. In that situation, it’s not possible to insist on priorities in one field without sacrificing others – so how should those priorities be decided? We need to look at what matters to the people who are experiencing poverty, and build from there. ‘Leadership’ is not the way forward: try listening instead.
The briefing paper I wrote for the Poverty Alliance on the Scotland Bill has been put online here. The slides are here. Both pieces should have a short shelf-life, because the Scotland Bill is still under review, but the Poverty Alliance will update the briefing as we go.
When the press reported that a House of Lords committee had condemned the Scotland Bill, I was sceptical. The Scottish Office has consistently taken the line that no devolution is possible without foreknowledge of the outcomes of future decisions, and that position is inconsistent with devolution in principle. The report of the Economic Affairs Committee is a different kettle of fish. They identify seven problems with the fiscal framework, and I think they are right about six of them. The seven problems are
- the absence of an agreed fiscal framework
- the lack of a fair, need-based mechanism for resource allocation – Barnett is not it
- how the block grant should be adjusted to allow for tax receipts
- Smith’s second ‘no detriment’ principle, which calls for footling cross-compensation to be made for every decision taken – the Committee calls it “a recipe for continuing conflict”
- the lack of an explicit mechanism to pay for joint activities such as international aid
- the unrestrained borrowing powers, and
- the lack of transparency and scrutiny.
The only thing in this list I disagree with is the point on borrowing powers – there is no good reason why any public authority should not be able to issue bonds, if people want to buy them.
The criticisms of the settlement are not an argument to delay the Scotland Bill, but, nearly a year after Smith reported, they are good reason to get the UK government to stop digging their heels in and think harder and more clearly about the mechanisms that are needed to deliver a devolved settlement.
There are some elements of potential immigration which the government has no real control over, but they’re not necessarily the ones getting all the publicity. Currently there are probably more than five million Britons living permanently abroad – a widely cited figure from the IPPR was 5.6 million. More than a million of these are in Australia, more than 800,000 in Spain and the USA, over 600,000 in Canada. (It may also be worth noting that 18,000 British citizens live in Bulgaria, one of the countries which the tabloids have been convinced is going to disgorge lots of people into the UK.)
The picture relating to benefit dependency is slightly different. According to current DWP figures, 1,221,000 benefits are paid to living to Britons abroad, of which 1,200,000 are pensioners. The country with most claims in payment is Australia, with 250,000 pensioners, followed by the USA, Ireland and Spain – those four countries together account for about half the total.
It’s interesting to speculate what would happen if a significant number of these people decided to come to Britain. If people are already receiving benefit, the cost is mainly going to be in other services. But there are four and a half million Britons living abroad who aren’t receiving benefit. How odd that they’ve been able to resist the lure of benefit tourism.
Afterthought, 9th January: There is also an issue here which relates to the debate on Scottish independence. Presumably an independent Scotland would have a proportion of expatriates to support – possibly 1 in 12, or 100,000. That is likely to come at a cost of £600-£700m a year, subject to negotiation, which would need to be factored in to the budget calculations.
According to today’s Scotland on Sunday, the Conservatives are considering devolving responsibility for Housing Benefit, partly as a means of defusing the ‘toxic’ issue of the bedroom tax. There are some good arguments. The first is that Housing Benefit depends on local housing markets. The second is that local authorities have a long track record of operating Housing Benefit; they have the people and the organisation to do it. Third, rent policies are different in Scotland from England. The underoccupancy penalty in Scotland is not removing a ‘spare room subsidy’ – it’s a penalty, taking somewhat more from Housing Benefit than the cost of the rooms in dispute. Fourth, the flexibility of devolution could make it possible to get around some of the problems that have emerged in the pilots through not paying social landlords direct.
If Housing Benefit was to be devolved, however, part of the plan for Universal Credit would unravel. Universal Credit was supposed to produce a unified taper, or ‘marginal rate of deduction’ – the speed at which benefit is withdrawn as income increases. It is going to be set at 65%. The figures never quite come out looking like that, because UC will be calculated on net income, after tax, national insurance and some other benefits which are not being integrated in the system. If a person is paying tax and National Insurance at 32% – there are several variations and possible permutations – UC will take away 65% of the remainder; that comes to 76.2% in total.
At current rates, Housing Benefit is withdrawn at 65% and Council Tax Reduction is withdrawn at 20%. If tax, NI and UC take away 76% of additional net income and CTR and HB together take away 85% of what’s left, the combined deduction would be over 96%. Even without tax, it’s 95%. (I’m assuming here that HB and CTR would be calculated after UC, and that income from HB and CTR would be disregarded for UC purposes. If they weren’t, and if there were different time frames, the calculations could be bewildering.) To avoid these problems, either the tapers would have to change, or UC would have to be calculated differently, with different rules where Housing Benefit is not part of the scheme.
If Universal Credit was to go forward without Housing Benefit, it would be a move toward a different model – tying Tax Credits to something that looks a lot like Supplementary Benefit. I’m not sure that this combination makes any more sense than the rest, but the smaller the pretensions of the scheme, the less scope there is for catastrophe.