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Until 2016, social security was organised on a Great Britain-wide basis. This contrasted with other forms of social policy, including health, education, and housing, which are devolved areas, and are therefore run and administered separately in different parts of the UK. Northern Ireland has always been an exception to this, with social security being an entirely devolved (or ‘transferred’) power. The Scotland Act 2016, however, devolved significant new social security powers to the Scottish Parliament and Government.

Within Great Britain, therefore, the devolution of social security is a relatively new and ongoing process. The following chart illustrates how the structure of the UK social security system is expected to look in 2025 when the Scottish Government is scheduled to have completed rollout of its new devolved benefits delivered by Social Security Scotland, and when the Department for Work and Pensions expects to have completed the caseload rollout of Universal Credit.  It should be noted that both of these forecasts were made before the coronavirus crisis and so the date may be subject to change.

UK Social Security system in 2025

Centralised social security in Great Britain

The centralisation of social security policy in Great Britain dates from the creation of the post-war welfare state, based on the principles espoused by William Beveridge in his report, Social Insurance and Allied Services, published in November 1942. Beveridge envisioned a single system of social insurance (the National Insurance system) delivered to all citizens based on need and not geography.

Whereas there had previously been separate arrangements for the provision of social security in England, Scotland, and Northern Ireland, a new Great Britain-wide Ministry of National Insurance was created in 1944, and thereafter a new, unified scheme of National Insurance was introduced, applying to all people in Great Britain. Centralised and uniform provision of social security thus continued to be a hallmark of public policy until recently.

The rationale behind retaining social security as a largely reserved power, it has been argued, is that it is a fundamental part of the ‘Social Union’. That is the sharing and funding of social rights, with protections offered to all citizens, regardless of where they live. In 2009, the Labour Government said in its White Paper – Scotland’s Future in the United Kingdom: building on ten years of Scottish devolution – that the ‘Social Union’ had its “most explicit expression in our social security system, which ensures that people across the UK have access to the same support in time of need”.

Against this, there have been calls for more ‘welfare pluralism’ whereby, it has been argued, the devolution of certain aspects of social security policy might lead to “more joined-up” public policy in the nations of the UK where other aspects of social policy are already devolved. 

Reserved social security

In Great Britain, any and all social security benefits not explicitly devolved to Scotland by the Scotland Act 2016 are reserved to the UK Government. Furthermore, Child Benefit, Guardian’s Allowance, Working Tax Credit, and Child Tax Credit (all administered by HMRC), are reserved throughout the United Kingdom (including Northern Ireland).

Since the devolution of most disability, industrial injury, and carer benefits by the Scotland Act 2016, the main reserved social security benefits and tax credits in Scotland reserved to the UK Government are:

  • Universal Credit
  • Working and Child Tax Credits
  • Jobseeker’s Allowance
  • Employment Support Allowance
  • Income Support
  • Pension Credit
  • Child Benefit
  • Housing Benefit
  • Guardians Allowance
  • Bereavement Support Payment
  • State Pension

All social security benefits, tax credits, allowances, and payments in Wales are reserved.

Social security in Northern Ireland

All social security powers are devolved formally to Northern Ireland, aside from Child Benefit, Guardian’s Allowance, Working Tax Credit, and Child Tax Credit, which are ‘excepted’ powers. By long-standing convention, however – and more recently, under section 87 of the Northern Ireland Act 1998 – Northern Ireland maintains ‘parity’ with social security, child maintenance, and pensions systems in Great Britain.  In practice, this is an important limitation on the ability of the Northern Ireland Executive and Assembly to diverge from UK Government policy. The Department for Communities delivers social security benefits in Northern Ireland.

There are, nevertheless, some differences in social security provision in Northern Ireland compared with Great Britain. The most recent example of this is a ‘mitigation package’ of measures in place from 2016 which enables the Northern Ireland Executive to reduce the impact of the UK Government’s welfare reforms on the most vulnerable in Northern Ireland with a series of Welfare Supplementary Payments, amongst other measures. These were due to expire in March 2020, but the Northern Ireland Executive is continuing to make contingency payments while it develops legislation to extend this package.

Universal Credit is also delivered slightly differently in Northern Ireland to England and Wales. UC claimants in Northern Ireland have the option of certain payment flexibilities, including:

  • Twice monthly payments for all households as the default, with monthly payments available on request.
  • Payment of the housing element of UC direct to the landlord (“managed payment”) as the default position. Direct payment of the entire UC award including the housing element to the household is available on request.
  • Split payments (paid into separate bank accounts) are possible between parties in a household on request

Social security in Scotland

Whereas many social policy areas were devolved to the Scottish Parliament by the Scotland Act 1998, responsibility for social security (as well as child support and pensions) was designated a reserved power in Schedule 5 (Head F).

After the implementation of the Scotland Act 2016, the following areas of social security are devolved:

  • Disability, industrial injuries and carers’ benefits;
  • Benefits for maternity, funeral and heating expenses;
  • Discretionary Housing Payments;
  • Discretionary payments and assistance
  • Powers to top-up any benefit
  • Powers to create other new social security benefits;
  • Powers to legislate for welfare foods; and
  • Powers to vary the housing cost element and to change payment arrangements for Universal Credit

The Scottish Government has stated that it intends to use the powers devolved by the Scotland Act 2016 to create a Scottish social security system based on “dignity, fairness and respect.” The Scottish Parliament has passed the Social Security (Scotland) Act 2018, which sets out the framework for a new Scottish social security system and the principles underpinning it.

The Scottish Government has also set up an executive agency – Social Security Scotland – to deliver the devolved benefits (other than discretionary housing payments and the Scottish Welfare Fund, which are delivered by local authorities).

This will eventually deliver devolved social security benefits in Scotland, but as a transitional measure the Scottish Government is using ‘agency agreements’ under which the Department for Work and Pensions (DWP) continues to deliver existing devolved benefits until they are replaced gradually by their new Scottish equivalent benefits.

In April 2020, full financial and legal responsibility for social security benefits devolved by the Scotland Act 2016 was transferred to Scottish Ministers.

Under the latest timetable, existing claimants were to begin to transfer from existing devolved DWP benefits to the Scottish Government’s equivalent benefits in 2020. The expectation was that full caseload transfer would be completed in 2025. The announcement of this schedule came before the outbreak of the coronavirus pandemic, however, which has delayed rollout of some of these new benefits.

Universal Credit remains a reserved benefit, but under Universal Credit Scottish Choices the Scottish Government has used the powers conferred by the Scotland Act 2016 to change payment arrangements in Scotland for Universal Credit and to vary the housing cost element for rented accommodation. Scottish Choices is delivered by the DWP on behalf of the Scottish Government and provides the following options for UC claimants in Scotland:

  • Being paid Universal Credit twice a month rather than monthly
  • Having their Universal Credit housing element paid directly to their landlords

Scottish Ministers also have the power to split UC payments between members of a couple, instead of making one payment per household. They can also vary the amount of housing costs paid to people in receipt of UC. Further detail on the implementation of these policies is still being developed by the DWP and the Scottish Government. 

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