By Dr Hayley Bennett, University of Edinburgh and Dr Jay Wiggan, University of Edinburgh.
On 18th March, Liz Kendall (The Secretary of State for Work and Pensions) delivered a speech in the House of Commons outlining new reforms to UK social security policies, and demonstrating that this government would follow in the footsteps of many of those before by initiating another welfare reform programme to “save £5bn a year.” Policy reforms targeting disability and health-related benefits were to be expected; the government had announced it would be developing a new Pathways to Work Green Paper and recent weeks multiple newspapers ran articles discussing the cost of social security spending.
It’s perhaps useful to remind ourselves that this is a fickle and unsettled policy domain. Such big policy announcements mean big changes to the welfare state. The UK social security system is generally considered to be highly centralised, with the post-war welfare state centred on a UK wide social insurance and social assistance model that has, in recent years, been overshadowed by a Westminster- led move towards increased means-testing (for example the multi-billion development of Universal Credit). Each new UK government nearly always announces a ‘major welfare reform’ programme that alters policy entitlements and eligibilities, or substantial administrative restructuring.
However, not all social security remains centralised. For example, through the Scotland Act 2016, the Scottish Government has developed various social security powers and responsibilities (for approximately £3bn of social security expenditure in Scotland), including the ability to top up some reserved benefits for people, and additional cash transfers such as the Scottish Child Payment[1]. Employment support is another complex area of policy competency that includes some responsibilities devolved to Scotland (e.g., powers to set up employment support programmes for disabled people and long-term unemployed people in receipt of reserved benefits) and others that remain reserved (such as Jobcentre Plus that is a UK wide, DWP managed institution).
Complexities and multi-level dependencies
There is much complexity, overlap, and dependency, then, between social security and employment policies developed and administered at different levels of government. This is particularly the case when we talk of disability benefits or ill-health. In Scotland, Universal Credit and Employment Support Allowance are matters reserved to the UK Government and managed by the Department for Work and Pensions (DWP), whereas benefits for additional disability needs are now devolved. Some elements of support for disabled people and people with health conditions remain reserved (for example, the health element in Universal Credit) and some have been devolved to the Scottish Government. This includes Disability Living Allowance, and Personal Independence Payments (PIP), the latter being the focus of much work by Scottish Government policymakers in recent years as they seek to redevelop it into the Adult Disability Payment (ADP) for Scottish residents.
Post-2016, Scottish policymakers and the SNP administration have proactively sought to develop a ‘Scottish social security system’ with its own vision, rhetoric, and administration. In practice, however, what residents in Scotland receive and how often remains closely linked to established UK welfare policies. While the UK government stresses that the proposals in their new Green Paper will apply only to reserved matters in Scotland, the relationships between reserved and devolved competencies and people’s lives and interactions with the whole welfare state is complex. As many newly devolved competencies reflect a transfer of powers and administrative responsibilities from existing UK policies, new Scottish policies are often based on determined financial calculations and established remits. There are also complex intersections with fully devolved competencies such as health and skills. Thus, the changes proposed by Liz Kendall may have various effects on residents in Scotland.
What might the Green Paper mean for Scotland?
First, perhaps the most pressing aspect for the Scottish Government is that changes in eligibilities and entitlements for PIP may have a knock-on effect to the budget available for the ADP. PIP is a benefit that people (both in and out of work) can apply for to seek financial support for the costs of their disability for long-term illness. The UK government announced they will tighten eligibility which will reduce the number of people in receipt of PIP. The Scottish Government have developed ADP with a keen eye to developing administrative and assessment processes in response to evidence about the negative experiences of previous Work Capability Assessments and PIP assessments, and stressing their commitment to a ‘dignity and respect’ agenda that underpins all the Scottish Social Security developments. Any changes to PIP entitlement may affect the budget available for ADP, meaning that the Scottish Government will need to either tighten eligibility for ADP, or maintain its own approach but find additional funding from elsewhere in the Scottish Government budget.
Second, the UK government announced multiple changes to the remaining insurance based social security payments, or ‘contributory benefits’ which are currently known as New Style JSA and New Style ESA. The Green Paper announced the intention to consult on merging these benefits into a time-limited Unemployment Insurance, possibly in an effort to disincentivise individuals from applying for health-related benefits that tend to come with higher benefit rates and lower conditionality. Given the relative marginalisation of insurance benefits in UK social security during the last forty years this is potentially a significant policy shift, however, and could point to emerging attempts to improve the institutional complementarities between the social security system and the (moderate) re-regulation of the labour market being taken forward by the UK Government through its New Deal for Working People. As all Scottish residents are eligible for the insurance based reserved benefits, the Scottish Government will need to consider if there is a knock-on effect of this change in terms of access to any devolved and local welfare services that rely on passporting (whereby an eligibility decision for one benefit is based on whether they are eligible for another).
Third, the UK government outlines how the substantial changes to benefit assessment for people who are disabled or experiencing ill-health will be accompanied by changes to employment support, stating that there will be “additional funding for employment, health and skills support, starting next year and building to around a £1 billion per year by the end of the decade”. The Green Paper outlines a number of strategies and programmes framed alongside a ‘pathways to work’ support offer, but many of these may only apply to England. With the end of the Fair Start Scotland programme the Scottish Government’s organisation and delivery of some employment supports is already localised via its ‘No One Left Behind’ programme. In this sense there is alignment with the direction of travel in England towards localisation of provision, but the Scottish Government will need to consider how it funds and develops its employment support services in light of the initiatives outlined in the Green Paper, and whether due to reserved competencies, especially for people in receipt of UC or the reformed contributory based benefit, these might be managed across Scotland via the DWP.
Finally, the announcements involve alterations to assessment processes that continue to centre Universal Credit (a reserved benefit administered by the DWP) as the main administrative mechanisms for working age benefit. While 365,000 individuals already receive UC health or ESA in Scotland (both reserved benefits), the announcement that health assessments will be incorporated within the UC framework may create additional complexity for the relationship between ADP and UC, and importantly increased complexity for households trying to understand and perhaps navigate different benefit eligibilities, application process, and income management.
What now for Scottish social security?
The UK government’s reforms to disability and ill-health benefits reminds us of an important issue: the interdependency between UK-wide and devolved social security competencies. As many ‘Scottish’ policies are in fact variations of UK government policies, or have a scope limited by equivalent UK government spending, there is always a risk that changes made by the UK government can change the foundation on which Scottish social security benefits are built. For example, the Scottish benefit known as the ‘Winter Heating Payment’ was a variation of the UK government’s ‘Winter Fuel Allowance’, a policy that the UK government revised from being a universal benefit to being means-tested (via access to Pension Credit, also reserved) in Autumn 2024. This move led the Scottish First Minister John Swinney to announce a new £100m (2025-2026) Pension Age Winter Heating Payment (now based on other benefit entitlements rather than being universal) in Scotland and paid out of the Scottish Budget (rather than an equivalised DWP allocation). A similar discussion is currently taking place around how the Scottish Government might use its own budget to ‘mitigate’ the two-child limit (a reserved eligibility decision relating to the child payment elements available within UC, also a reserved policy).
It is encouraging that the UK government clearly states in the Green Paper a commitment to work with devolved governments in Scotland, Wales, and Northern Ireland and create ‘collaboration committees’. There is clearly a lot of policy work needed to ensure that multi-level social security policies can function effectively and support people in times of need. This is difficult and often complicated work for policymakers, as many Scottish benefits are exposed to changes in their foundations. Perhaps we should acknowledge that this exposure might be an enduring feature of Scottish social security and that instability is the nature of the beast, as governments frequently target social security and welfare state policies for cuts and reforms.
[1] This blog focuses on Scotland, but there are also notable policy variations in Northern Ireland, some in Wales, and an increasing role for local welfare. See https://safetynets.study/about
About the authors:
Dr Hayley Bennett is a Lecturer in Social Policy at the University of Edinburgh. She researches UK social security and employment policies. She is a member of the Centre for Constitutional Change steering group, and a member Social Policy Association’s ‘Employment and social security’ policy group.
Dr Jay Wiggan is a Senior Lecturer in Social Policy at the University of Edinburgh. His work is focused on employment and social security policy and governance, and he is a member of the Social Policy Association’s ‘Employment and social security’ policy group.