In a report entitled Poverty and Devolution, the Institute for Public Policy Research suggests criteria for deciding whether a benefit could be devolved to a more local level (as Council Tax Relief has been recently). If a benefit is contributory, or if it acts as a countercyclical stabiliser, as Jobseeker’s Allowance does ( – that is, the amount spent on it rises during an economic downturn), then it should not be devolved; but if a benefit relates to already devolved functions, or the amounts paid relate to local circumstances (such as housing markets), then devolution to more local levels might be appropriate. In relation to this last criterion, both employment support and Housing Benefit could be considered for devolution.
We would like to suggest a further criterion: that devolution should not be considered if devolution would complicate the administration and impacts of either the benefit in question or of the administration of other benefits. Take the example of Council Tax Relief. The localisation of regulation, as well as payment, of Council Tax Relief to local authorities has complicated the already complex relationship between Council Tax Relief and other means-tested benefits (including Tax Credits), and particularly in relation to the transition to Universal Credit. One of the reasons for implementing Universal Credit was to provide a consistent taper rate across the entire population of means-tested benefits recipients. Locally regulated Council Tax Relief has compromised this objective; and because many claimants receive Council Tax Relief as well as other means-tested benefits or Tax Credits, and the calculation of each of these benefits takes into account income from other sources, including other benefits, both the administration of benefits, and the amounts that claimants receive, have become less predictable. To localise Housing Benefit would pose the same problems.
A benefits system founded on a Citizen’s Income would make it much easier to devolve benefits. Housing Benefit and Council Tax Relief would for most claimants be the only means-tested benefits that they were on, and because the amounts of a household’s Citizen’s Incomes would be entirely predictable, a household’s Citizen’s Incomes would not affect the administration of the localised benefits. Neither would the calculation of the localised benefits affect someone’s Citizen’s Income.
Because households’ Citizen’s Incomes would float the vast majority of households currently on Jobseeker’s Allowance off all means-tested benefits apart from Housing Benefit and Council Tax Relief, tests for work readiness or work search would no longer be required, and sanctions would become redundant. Employment support would still be required, and we agree with IPPR that this would be best managed locally. Many local authorities already offer this service. To take just one example: for nearly twenty years, Greenwich Local Labour and Business (GLLaB) has been matching Greenwich residents to local job opportunities, and, where local skills gaps are revealed, GLLaB organises the necessary training. No sanctions are required.
There could be no better context for the localising of means-tested benefits than a Citizen’s Income scheme.