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My Lords, following the devolution of social security powers, the Scottish Government are responsible for funding and administering social security benefits, with funding transferred from the UK Government. Funding for devolved social security is provided through welfare block grant adjustments that transfer funding from the UK Government to the Scottish Government. In the most recent financial year, this
amounted to £5.8 billion for the Scottish Government. Decisions on how funding is used are for the Scottish Government.
My Lords, following the devolution of social security powers, the Scottish Government are responsible for funding and administering social security benefits, with funding transferred from the UK Government. Funding for devolved social security is provided through welfare block grant adjustments that transfer funding from the UK Government to the Scottish Government. In the most recent financial year, this
amounted to £5.8 billion for the Scottish Government. Decisions on how funding is used are for the Scottish Government.
Tabled by
Lord Bruce of Bennachie
To ask His Majesty’s Government what assessment they have made of the total amount transferred to the Scottish Government in the last financial year following the devolution of social security benefits.
I agree; I am strong supporter of not blaming the UK Government. As the noble Baroness knows, funding is assessed through the fiscal framework, which links welfare block grant adjustments directly to UK Government spending on equivalent benefits. These adjustments are calculated on a forecast basis and reconciled on outturn, ensuring that funding reflects actual spending over time. The Scottish Government are then responsible for spending decisions, including on benefit levels and eligibility. Any additional spending on benefits is a choice for the Scottish Government and must come from within their own budget.
I agree; I am strong supporter of not blaming the UK Government. As the noble Baroness knows, funding is assessed through the fiscal framework, which links welfare block grant adjustments directly to UK Government spending on equivalent benefits. These adjustments are calculated on a forecast basis and reconciled on outturn, ensuring that funding reflects actual spending over time. The Scottish Government are then responsible for spending decisions, including on benefit levels and eligibility. Any additional spending on benefits is a choice for the Scottish Government and must come from within their own budget.
I thank the Minister for that Answer. In 2025-26, the total social security spend in Scotland was £6.9 billion, which amounts to £1.3 billion more than that which is transferred by the Treasury. It is far from clear how the SNP Government will manage to sustain this level of funding. Does the Minister agree that, to the extent that the Scottish Government have added top-ups, it is important to make it clear that the looming deficit from this and other unbudgeted expenditure is entirely the Scottish Government’s responsibility and they should not blame it on the UK Government—although they will undoubtedly try?
I am grateful to the noble Lord for his question but I do not agree with the assumption underlying it. Of course we must spend more on defence, but we must also continue to support those who need that support the most. As I said in answer to the first Question, spending on benefits is a choice for the Scottish Government and must come from within their own budget.
I am grateful to the noble Lord for his question but I do not agree with the assumption underlying it. Of course we must spend more on defence, but we must also continue to support those who need that support the most. As I said in answer to the first Question, spending on benefits is a choice for the Scottish Government and must come from within their own budget.
My Lords, in the event of our being at war, which some experts suggest is increasingly likely by 2030, the massive and urgent recalibration of resources to defence will inevitably mean that those who need most support due to their disability will be hit the hardest. What advice are His Majesty’s Government giving to the Scottish Government on the careful management of their social security budget so that they can mitigate the worst effects of such an eventuality on those whose disability makes them most dependent?
I did not know the specific example that the noble Lord sets out and I am grateful to him for educating me, as he has done many times in the past. I agree that Scotland, in my view, is better off as part of the union and that independence would be disadvantageous to the people of Scotland and to the Scottish economy. I agree very much with what he says about continuing fiscal responsibility, both in Scotland and in the whole of the UK.
I did not know the specific example that the noble Lord sets out and I am grateful to him for educating me, as he has done many times in the past. I agree that Scotland, in my view, is better off as part of the union and that independence would be disadvantageous to the people of Scotland and to the Scottish economy. I agree very much with what he says about continuing fiscal responsibility, both in Scotland and in the whole of the UK.
My Lords, does the noble Lord the Financial Secretary agree that fiscal responsibility should lie at the heart of the devolutionary settlement? Does he agree that maintaining fiscal credibility would be a particular challenge in the event of Scotland becoming independent? Is he aware that the Irish Free State had to cut the state pension by 10% in 1924 to maintain parity with sterling? Might he draw that to the attention of those who advocate Scottish independence?
I worked for Gordon Brown for quite some years. I did not always agree with him and I am not sure I do on this occasion. The noble Baroness knows that the fiscal framework sets a funding floor to ensure that the Welsh Government receive a fair level of relative funding. A review of the framework is triggered when relative funding falls to 115%. The Government remain committed to working with the Welsh Government to ensure the smooth delivery of their funding settlement, and there are ongoing discussions about funding flexibilities and their fiscal framework as part of this.
I worked for Gordon Brown for quite some years. I did not always agree with him and I am not sure I do on this occasion. The noble Baroness knows that the fiscal framework sets a funding floor to ensure that the Welsh Government receive a fair level of relative funding. A review of the framework is triggered when relative funding falls to 115%. The Government remain committed to working with the Welsh Government to ensure the smooth delivery of their funding settlement, and there are ongoing discussions about funding flexibilities and their fiscal framework as part of this.
My Lords, unlike Scotland, which has taken on significant social security powers and used them directly to address child poverty in Scotland, Wales has limited control over the welfare system. Does the Minister agree with the principle of Gordon Brown’s report that nothing that is devolved to Scotland could not be devolved to Wales if the Senedd wants it?
As the noble Baroness knows far better than I do, the fiscal framework is designed to ensure that funding is fair and fiscally neutral at the point of devolution. It provides the Scottish Government with funding that reflects UK Government spending, while also giving them full responsibility for policy decisions in devolved areas. So, as I have said, any additional spending on benefits is a choice for the Scottish Government and must come from within their own budget.
The noble Baroness alludes to wider welfare reform. She will be well aware that spending on welfare increased by £88 billion in the last five years of the previous Government. I do not think anyone believes that the system that we inherited is working. It abandoned too many people to a life on benefits, it wrote off too
many people as too sick to work, and it condemned too many children to be too poor to eat, which is exactly why we are reforming the system. She will know that we have launched the Milburn review, focusing on the causes of youth unemployment in particular, and he will come back with specific recommendations later this year.
As the noble Baroness knows far better than I do, the fiscal framework is designed to ensure that funding is fair and fiscally neutral at the point of devolution. It provides the Scottish Government with funding that reflects UK Government spending, while also giving them full responsibility for policy decisions in devolved areas. So, as I have said, any additional spending on benefits is a choice for the Scottish Government and must come from within their own budget.
The noble Baroness alludes to wider welfare reform. She will be well aware that spending on welfare increased by £88 billion in the last five years of the previous Government. I do not think anyone believes that the system that we inherited is working. It abandoned too many people to a life on benefits, it wrote off too
many people as too sick to work, and it condemned too many children to be too poor to eat, which is exactly why we are reforming the system. She will know that we have launched the Milburn review, focusing on the causes of youth unemployment in particular, and he will come back with specific recommendations later this year.
My Lords, the Scottish Fiscal Commission has forecast that over a million Scottish adults will be in receipt of disability payments by 2031 under the new Scottish social security system—that is over a fifth of the projected population. The divergence from Barnett consequentials in just this area is forecasted to be £1.2 billion, which will come, as the Minister says, either from spending cuts or rises in taxation—taxation rates already being the highest in the UK, reaching 48%. To help the Scottish Government balance the books and to give some relief to the Scottish taxpayer, I ask the Minister: what, if any, analysis has been done to assess the varying disability rates across the different parts of the UK, and what health interventions have proven successful in lowering those rates?
There is a lot in what the noble Baroness says. I obviously agree with her, as I often do, on the matter of the European Union. I agree with what she says; it is very much worth looking at.
There is a lot in what the noble Baroness says. I obviously agree with her, as I often do, on the matter of the European Union. I agree with what she says; it is very much worth looking at.
My Lords, the noble Lord, Lord Bruce, tabled this Question in part because he is appalled that so many people he speaks to in Scotland think that the whole of their benefit comes from Scottish-only taxes, not just the top-up. Ahead of the Brexit referendum, many people whose areas had received millions in EU support declared that their area had never received a penny because the EU contribution was unacknowledged or obscured. Is it time to improve communication and strengthen the union by making it clear that the whole of the UK contributes to benefit funding in Scotland, as well as in the other nations?
I did not know about what the noble Lord says. I am more than happy to take that back to my DWP colleagues and to discuss it with them.
I did not know about what the noble Lord says. I am more than happy to take that back to my DWP colleagues and to discuss it with them.
My Lords, the Minister may be aware that it has cost the taxpayer more than £650 million to set up Social Security Scotland, yet there are countless examples of claimants who are on benefits administered by both Social Security Scotland and the Department for Work and Pensions who have had money deducted because of a lack of communication between the two agencies. What action can the UK Government take to improve communication between both departments to make sure that those in genuine need of support are not penalised?
I think the noble Baroness means the UK Government. I know that the Scottish Greens are in coalition with the SNP in Scotland, so presumably she supports what they are doing. As I have said already, it is a matter for the Scottish Government. They have full responsibility for policy decisions in devolved areas and any spending they choose to undertake must come from within their own budgets.
I think the noble Baroness means the UK Government. I know that the Scottish Greens are in coalition with the SNP in Scotland, so presumably she supports what they are doing. As I have said already, it is a matter for the Scottish Government. They have full responsibility for policy decisions in devolved areas and any spending they choose to undertake must come from within their own budgets.
My Lords, the Scottish Government are using this social security spending to deliver a more humane system that treats people with dignity. We have recently had the family finances project from the University of Glasgow and the University of Manchester, which shows that the Scottish child payment has reduced levels of food insecurity and material deprivation for children by about eight percentage points compared with comparable populations in England. Will the English Government follow suit?
Tabled by
Lord Bruce of Bennachie
To ask His Majesty’s Government what assessment they have made of the total amount transferred to the Scottish Government in the last financial year following the devolution of social security benefits.
Tabled by
Lord Bruce of Bennachie
To ask His Majesty’s Government what assessment they have made of the total amount transferred to the Scottish Government in the last financial year following the devolution of social security benefits.
My Lords, following the devolution of social security powers, the Scottish Government are responsible for funding and administering social security benefits, with funding transferred from the UK Government. Funding for devolved social security is provided through welfare block grant adjustments that transfer funding from the UK Government to the Scottish Government. In the most recent financial year, this
amounted to £5.8 billion for the Scottish Government. Decisions on how funding is used are for the Scottish Government.
To ask His Majesty's Government what recent discussions they have had with the devolved administrations about changes to the allocation of funding across the UK on reserved matters.
To ask His Majesty's Government what recent discussions they have had with the devolved administrations about changes to the allocation of funding across the UK on reserved matters.
The UK and devolved governments have regular discussions about changes to the allocation of funding across the UK, including on reserved matters.
The UK Government remains committed to ensuring that funding across the UK is allocated in line with the Statement of Funding Policy.
To ask His Majesty's Government what representations they have received from the government of Wales about devolving responsibility for the Crown Estate's activities in Wales to Senedd Cymru.
To ask His Majesty's Government what representations they have received from the government of Wales about devolving responsibility for the Crown Estate's activities in Wales to Senedd Cymru.
The UK Government has regular discussions with the Welsh Government at official and ministerial level on a range of issues. This has included a request from the Welsh Government that the UK Government considers devolution of the management of The Crown Estate in Wales.
King's consent signified. Lords third reading. Bill passed and sent to the Commons.
King's consent signified. Lords third reading. Bill passed and sent to the Commons.
To ask His Majesty's Government which of the "lower business rates multipliers" for retail, hospitality and leisure properties with a rateable value of less than £500,000 will be applied in (1) Wales, (2) Scotland, and (3) Northern Ireland; and what discussions they have held with devolved administrations on this matter.
To ask His Majesty's Government which of the "lower business rates multipliers" for retail, hospitality and leisure properties with a rateable value of less than £500,000 will be applied in (1) Wales, (2) Scotland, and (3) Northern Ireland; and what discussions they have held with devolved administrations on this matter.
Business rates is a devolved policy area. Therefore, the new retail hospitality and leisure multipliers will apply in England only.
To ask His Majesty's Government what plans they have to promote long-term fiscal devolution; and what assessment they have made of the potential of greater fiscal devolution to address regional inequalities and growth rates.
To ask His Majesty's Government what plans they have to promote long-term fiscal devolution; and what assessment they have made of the potential of greater fiscal devolution to address regional inequalities and growth rates.
The United Kingdom Government regularly considers how fiscal devolution arrangements are working in practice, taking into account the views of a range of stakeholders.
To ask His Majesty's Government what plans they have to consider the learnings on fiscal devolution of each nation and region in Council of the Nations and Regions.
To ask His Majesty's Government what plans they have to consider the learnings on fiscal devolution of each nation and region in Council of the Nations and Regions.
The United Kingdom Government regularly considers how fiscal devolution arrangements are working in practice, taking into account the views of a range of stakeholders.
To ask His Majesty's Government what plans they have to consider the learnings on fiscal devolution of each nation and region in the British–Irish Council.
To ask His Majesty's Government what plans they have to consider the learnings on fiscal devolution of each nation and region in the British–Irish Council.
The United Kingdom Government regularly considers how fiscal devolution arrangements are working in practice, taking into account the views of a range of stakeholders.
To ask His Majesty's Government, in regard to the Statement of Funding Policy: Funding the Scottish Government, Welsh Government and Northern Ireland Executive, published in June 2025, why they amended their funding policy for agriculture and fisheries funding.
To ask His Majesty's Government, in regard to the Statement of Funding Policy: Funding the Scottish Government, Welsh Government and Northern Ireland Executive, published in June 2025, why they amended their funding policy for agriculture and fisheries funding.
As set out in the Statement of Funding Policy, from 2025-26 the devolved governments will no longer receive a ringfenced addition to the block grant for agriculture and fisheries. Funding for agriculture and fisheries from 2024-25 has been baselined and un-ringfenced in each devolved governments block grant. This is an above population share for the devolved governments.
It is for devolved governments to allocate this funding as they see fit and they are accountable to their devolved legislatures for those decisions. This is a key principle of devolution and this decision respects that.
The Barnett formula will apply to any future changes in UK Government funding from 2025-26 for agriculture and fisheries in the usual way. This is the normal operation of the funding arrangements for the devolved governments.
To ask His Majesty's Government what are the consequentials under the Barnett Formula for each of the devolved administrations resulting from approval of the Lower Thames Crossing.
To ask His Majesty's Government what are the consequentials under the Barnett Formula for each of the devolved administrations resulting from approval of the Lower Thames Crossing.
The Block Grant Transparency publication breaks down all changes in the devolved governments’ block grant funding from the 2015 Spending Review up to and including Main Estimates 2023-24. Where funding for the Lower Thames Crossing has been allocated at a fiscal event or Estimates, the publication will confirm the total Barnett consequentials received by the devolved governments. The most recent report was published in July 2023 [1]. An updated report will be published in due course.
At spending reviews, the Barnett formula is applied to the overall change in a department’s settlement using the department’s comparability factor. This means Barnett consequentials generated at spending reviews in relation to the Lower Thames Crossing specifically cannot be determined.
For any future spending on the Lower Thames Crossing, Barnett consequentials will be confirmed when UK Government departmental budgets change.
[1] You can access this report via the following link: https://www.gov.uk/government/publications/block-grant-transparency-july-2023
To ask His Majesty's Government how much of the funds allocated to the devolved administrations they have been compelled by the Treasury to return on the basis of underspending as of 5 April.
To ask His Majesty's Government how much of the funds allocated to the devolved administrations they have been compelled by the Treasury to return on the basis of underspending as of 5 April.
Each devolved government is able to carry forward funding into future financial years. The Scottish and Welsh Governments each have a Reserve, and the Northern Ireland Executive has access to Budget Exchange. Details of these arrangements are outlined in the Statement of Funding Policy.
Outside of these arrangements, and for ringfenced non-Barnett funding, the devolved governments are required to return underspends to the UK Consolidated Fund at the end of the financial year, as with UK Government departments. This is the normal operation of the public spending framework, as set out in the Consolidated Budgeting Guidance.
Historical outturn data for the devolved governments up to the 2023-24 financial year is published in the most recent HMT Public Expenditure Statistical Analyses (PESA) publication from July 2024. [1] This publication will be updated later this year with Provisional Outturn for 2024-25.
[1] You can access this publication via this link: https://www.gov.uk/government/collections/public-expenditure-statistical-analyses-pesa.