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Employability and Skills: Taking forward our National Conversation


3 The Commission On Scottish Devolution

Chapter Summary

This Chapter sets out the recommendations for employability and employment related benefits put forward by the Commission on Scottish Devolution.

  • While the Scottish Government has welcomed these proposals, they do not go far enough in enabling the Scottish Government to tackle unemployment

3.1. In summary the Commission on Scottish Devolution report in summary recommends the status quo but with more goodwill on the part of the UK government to make the arrangements work and to accommodate the Scottish Government's policy requirements. The following section illustrates what we might be able to do with increased goodwill. This would, however, be highly dependent on the approach taken by individual Ministers and Departments at each relevant time and could not be relied on as a consistent means of making progress.

3.2. Those recommendations within the Commission on Scottish Devolution report relating to employability and skills were:

  • A formal consultation role should be built into DWP's commissioning process for those welfare to work programmes that are based in, or extend to, Scotland so that the views of the Scottish Government on particular skills or other needs that require to be addressed in Scotland are properly taken into account. (Recommendation 5.20):
  • The Deprived Areas Fund should be devolved to the Scottish Parliament given the geographic nature of the help it is designed to provide and the fit with the Scottish Government's wider responsibilities. (Recommendation 5.21)

3.3. These recommendations would not provide the Scottish Government with any substantively increased ability to tackle unemployment over that which exists currently. Key levers such as benefits, tax credits and employment support would remain reserved under the Commission on Scottish Devolution recommendations. The impact of the recommendations would be marginal. Crucially, there is no obligation on the part of the UK government to accept the proposals.

Box 2: Case Study - Welfare to Work programmes

DWP welfare to work programmes potentially impact on a variety of services funded by the Scottish Government. It might help reduce inefficiencies and ensure that DWP provision is appropriately tailored to the Scottish context if the Scottish Government were involved in the commissioning process at an early stage. As the recommendation stands, however, the UK Government would be under no obligation to amend its proposals in line with the Scottish Government's views.

Further, there would be much greater value in constructive consultation at the point of policy development, rather than the point of commissioning the service. Irrespective of the commissioning process, the retention of a central GB wide policy regime with very limited flexibility will continue to undermine the development of programmes which could make a greater difference to people seeking to move into work across Scotland.

Box 3: Case Study - The Deprived Areas Fund

In theory, this recommendation would devolve this fund to Scotland, enabling Scottish cities to plan and spend in a more integrated and strategic fashion, and allowing greater localisation. At the margins, it would therefore help more people into work in Scotland at a time of recession. However, there is no commitment by the UK Government to DAF beyond March 2011. As Jobcentre plus has committed spend of DAF in some areas up to then, it may not be feasible to implement the recommendation.

3.4. The full argument behind the recommendations is set out in the Commission on Scottish Devolution Commission report (pages 200 to 207). In summary, the case made for social security remaining reserved to the UK is:

  • the principle of ensuring common social citizenship throughout Great Britain.
  • the complexity of the social security system, including its funding, and that interdependencies with other parts of the social security and tax credits system leading to difficulties in devolving any one element.

3.5. Under the current arrangements, the Scottish Government and Scottish Parliament are constrained in developing policies within the areas currently devolved due to interaction with the UK-led tax credit and benefits systems and cannot choose to "opt-out" of policies introduced by the UK Government. Both Governments could agree - and could have agreed at any point since devolution - to resolve some of these "devolved / reserved" interface issues but, to date, opportunities to do so within this area have been very limited.

3.6. This interface has caused difficulties - or has the potential to cause difficulties - for a Scottish Government. These problems are likely to grow over time as there are more opportunities for the two Governments to pursue different policies and approaches.

Box 4: Case Study - What a Scottish Government and Scottish Parliament could do if the Commission on Scottish Devolution recommendations on co-operation were met

  • build on the UK framework with distinctive Scottish approaches that do not compromise benefit entitlement;
  • invite the UK Government to remove constraints on devolved policy arising from UK tax credit, benefit and employment support policies;
  • invite the UK Government to give Scotland the chance to "opt-out" of proposed changes by the UK Government to benefits or tax credits.

What are the implications

  • No material increase in ability to improve employment support in Scotland: key levers around employment support including benefits and tax credits remain largely reserved;
  • Without greater fiscal autonomy any additional funding would have to found from within the existing block grant without the flexibility which is required for demand led provision;
  • Each change would be subject to agreement and negotiation with the UK Government and UK Parliament;
  • The United Kingdom remains sovereign and is able to legislate even in devolved areas.

3.7. There would thus be no step change in a Scottish Government's ability to improve employment support. Key levers such as benefits, tax credits and employment support would remain largely reserved. The consequences for devolved policies caused by a change made by the UK Government are illustrated in the example below:

  • The UKWelfare Reform Bill, was introduced in the House of Commons in January 2009. The changes it makes have implications for skills training, provision of childcare and drug and alcohol services which are all devolved to Scotland and serves to highlight the very different policy thinking and delivery models in Scotland across a number of areas. For example, the Scottish Government and UK Government differ in their approach when considering whether coercing people into drug treatment can produce sustainable outcomes in terms of recovery and employment.

3.8. Unlike other options considered in this paper, the Commission on Scottish Devolution recommendations would be dependent on goodwill and would have to be negotiated each time. They would not necessarily allow a Scottish Government to choose policies and delivery mechanisms which best reflect Scottish requirements across all benefits, tax credits and employment support and provide a consistent approach with other policies.