A groundbreaking study has revealed that the rise of 'welfare nationalism' across the UK has led to significant disparities in benefit entitlements, with a Scottish family on low income receiving £15,000 more per year in state support than an identical household in England. The research, published by the Safety Nets project, provides the first detailed analysis of how devolution has impacted social security policy across the four UK nations.
Stark Differences in Benefit Entitlements
The study found that a typical out-of-work couple with four children would receive £22,000 a year in benefit income in York, compared with £32,000 in Belfast and £37,000 in Glasgow. Other notable divergences include benefit and grant entitlements that mean a baby in a family on Universal Credit in Scotland qualifies its parents for an additional £1,800 during its first year of life, compared with England or Wales.
Impact of Devolved Opt-Outs
Devolved opt-outs from the benefit cap, which limits total benefit income for out-of-work households, mean Scottish and Northern Irish families are potentially thousands of pounds a year better off than their English and Welsh equivalents. The study noted that 'more and more, the support people can receive when affected by things like low income, illness, disability or caring responsibilities depends on where in the UK they live.'
While the variations in entitlements across the four countries only marginally increased overall UK welfare spending, the financial impacts on individual households should not be underestimated. Devolved policies can make big differences to the living standards experienced by low-income households according to where they live.
Key Factors Behind the £15,000 Gap
The £15,000 difference in benefit income for identical families in England and Scotland is explained by more generous Scottish child payments and extra protections that shield the Scottish family from benefit cap limits, which reduce the English family's benefit entitlement by £8,000 a year. Social housing tenants in Northern Ireland and Scotland also receive automatic protection from the 'bedroom tax' imposed on households deemed to have more rooms than they need, saving them an average of £684 and £630 a year respectively. In England and Wales, help with bedroom tax costs is discretionary.
Council Tax Support Variations
Britain-wide variations in council tax support levels mean a family in England with an average council tax bill receiving the maximum council tax reduction would have to pay £248 a year, compared with zero in Scotland and Wales. There are stark variations in devolved council tax support levels in England alone. A family living in a band D property and eligible for full CTR in Doncaster would pay nothing, but if they moved across the border to North Lincolnshire, which has a maximum 50% CTR and caps support at Band B, they would pay £1,400 a year.
Additional Spending and Affordability
Devolved welfare policy added about £1 billion a year to UK social security spending in 2023-24, prompting questions of affordability from some quarters. Most of the additional spending was in Scotland, which has most scope to shape its own social security policies. This was driven by the Scottish National Party's adoption of child payments of £28.20 a week per child to low-income families on Universal Credit, and top-ups to other benefits, from carer support to winter fuel payments.
Child Poverty Targets
More generous social security entitlements are key to the Scottish government's ambition of reducing child poverty to 10% by 2030-31. While its child poverty rates are as a result the lowest of the four UK countries, current official projections indicate it will fail to hit its target without additional investment. Although Wales has no devolved social security powers, the newly elected government, led by Plaid Cymru, has said it will trial a Scotland-style £10 a week child payment and lobby for devolved tax and social security responsibilities.
The State of the Nations study was compiled by a team of academics from three universities, together with the Resolution Foundation thinktank and the Child Poverty Action Group.
