Should housing benefit be devolved to Scotland

Gibb, Kenneth and Stephens, Mark (2012) Should housing benefit be devolved to Scotland. Fraser of Allander Economic Commentary, 35 (3). pp. 67-71. ISSN 2046-5378

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In the on-going debates about additional financial powers for the Scottish Parliament, fiscal autonomy and indeed the independence referendum and the ‘devolution max’ alternative, giving Scotland powers over all or some aspects of social security is, for many, a Rubicon-crossing decision; a point of no return. However UK Government’s welfare benefit reforms in general and the cuts to Housing Benefit in particular have given this issue urgency. The Holyrood Committee examining the Scotland Bill and debates in the chamber have questioned the absence of Scottish powers in areas, such as housing, where a reserved policy (such as Housing Benefit) limits the ability of the Scottish Parliament to determine the outcome of devolved policy areas (such as housing). In the election campaign, the SNP manifesto said that the party would seek the devolution of Housing Benefit. In this exploratory paper, we look at the prospects for devolving Housing Benefit within the existing settlement (i.e. with the rest of social security reserved) and also in terms of a devolution max variant wherein the rest of the social security system is also devolved. However, in order to fully grasp the possibilities and challenges facing such policy reform, it is important to first set out how the Housing Benefit system works and interacts with both income maintenance and housing policies. This reveals important structural problems with the present system, ones that will remain unresolved by the reforms and cuts presently underway.