The funding of the Scottish Parliament's new social security responsibilities : how will it work and what are the risks? 21 key questions (and answers)

Eiser, David (2019) The funding of the Scottish Parliament's new social security responsibilities : how will it work and what are the risks? 21 key questions (and answers). Fraser of Allander Economic Commentary, 43 (4). ISSN 2046-5378

Preview	Text (FEC_43_4_2019_EiserD) FEC_43_4_2019_EiserD.pdf Final Published Version Download (386kB)| Preview
Preview	Text (FEC_43_4_2019_EiserD) FEC_43_4_2019_EiserD.pdf Final Published Version Download (1MB)| Preview

Abstract

Eleven social security payments associated with spending of around £3.5bn per annum are being devolved to the Scottish Parliament. Financial responsibility will largely be transferred in 2020, although the full roll-out of Scottish specific payments will take longer. This paper reviews the financial and budgetary implications of this transfer of fiscal responsibility. It considers how the Scottish block grant is being adjusted to reflect the transfer of responsibility, the risks associated with forecasting spending on ‘demand-led’ social security payments and how forecast error can be addressed; and issues around the concept of ‘policy spillovers’.