The no detriment principle rears its head again

In several pieces and presentations last year I pointed to the implications of the ‘no detriment’ principle agreed by the Smith Commission, which means that the Scottish Government will bear the costs of changing policies that otherwise would be suffered by the UK government.  In January I gave an example of this: HMRC has charged the Scottish Government for the cost of not doing anything about stamp duty.  Now I read this, in a report published by Audit Scotland today:

56. DWP has adjusted its systems and guidance to accommodate the introduction of the SRIT (Scottish Rate of Income Tax). It estimates this will cost £1.7 million. DWP charged  the Scottish Government £870,000 for this work in 2015/16, and expects further costs in 2016/17.

Yes: that’s a bill for changing its guidance.  Presumably based on average cost rather than marginal cost, because there’s no marginal cost in adding detail to routine updates of guidance.   The principle  is important, because when it comes to big changes – such as introducing new disability benefits – the DWP is going to follow through with billing for changes throughout the system, and the costs are likely to be prohibitive.  How would the British government respond if they get a bundle of equivalent bills from the EU – the cost of removing references to 28 countries from leaflets, or changing address books?  They really need to start rethinking their approach to transferring responsibilities.

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