Devolution across the UK has already helped tackle poverty and greater localisation of some key policy areas would help make further improvements
The publication of the draft Scotland Bill has restarted the debate about how much power could be handed to Scotland and the potential that offers. It comes as a new IPPR North report outlines the potential for devolution to be harnessed to address poverty.
Following the wave of devolution in the late 1990s, headline levels of poverty across all four nations of the UK fell significantly until the recession put a stop to progress. Since the recession, trends in the UK’s constituent parts have diverged, with rising levels in Northern Ireland and Wales in particular.
In an open economy such as the United Kingdom, the levels of deprivation experienced are linked closely to the performance of the wider economy. With improving employment conditions among all UK nations, poverty has either stopped rising, or is again beginning to fall. Yet the heavy lifting in the battle against poverty should not just be left to the market – public policies can and do make a difference.
Indeed, the policies used by the devolved nations can be a key determinant of poverty levels in the nations of the UK.
For example, funding the costs of care is not a worry for pensioners in Scotland as it is in England, and early years intervention policies in Wales may well feed through into improved outcomes for Welsh children over their English neighbours. These have both been possible with devolved capabilities to do things differently from Westminster.
Transferring more competence to the devolved nations could help them make further inroads. This is particularly the case where policies made in Whitehall have failed to account for the very different local conditions. The most obvious areas of social policy this concerns are unemployment support, and housing policy, both of which require strongly place-based responses.
The government’s flagship Work Programme has proven disappointing, particularly in Wales, but the devolved nations have already began to branch out – Jobs Growth Wales is one such example of using their budgets to provide a better chance for disadvantaged jobseekers than the current Westminster offer.
The housing market is also one of the key determinants of poverty, but devolved and central housing powers do not match up. Housing benefit expenditure – disconnected from development or any kind of devolved housing investment strategy – has resulted in higher rents, and driven up public spending but not housing development. A new path for rent subsidy is needed, and with most other parts of housing policy devolved, the nations should be entitled to set their own rent subsidy regimes, beyond the limited offer in the Smith Commission of varying the housing element within Universal Credit. The same could be offered to English regions, as our Decentralisation Decade plan points out. This means areas like Greater Manchester or Leeds could be equipped with tools similar to those of Scotland and Wales to tackle poverty.
If progress in controlling poverty is to continue, the right decisions have to be made at the right level. It is right that the state retains redistributive powers, and the scope to pool funds to insure the many against potential against economic shocks. However, technocracy from the centre has not delivered a perfect welfare system, nor has it eliminated poverty. At the same time, the devolved nations have shown that different, and potentially better, paths are available if only they are free to do so.
Bill Davies is a Research Fellow at IPPR North and co-author of the IPPR North’s Poverty and devolution report published on January 22. He tweets at @bill_davies_87.
