At the Margins of Devolution? Fiscal Autonomy and Housing Benefit

Recent policy debate in Scotland has focused on the vexed question of fiscal autonomy (Heald and McLeod, 2002). One important, though under-researched, dimension of the debate concerns the expenditure and policy design relationships between devolved policy responsibilities in areas such as housing and non-devolved but related policy areas such as social security and Housing Benefit (HB). This paper adds to the debate on fiscal autonomy by looking at the place of housing policy and raises a series of specific questions relating to proposals to increase fiscal autonomy in terms of both the financing and design of low-income housing subsidies operating within Scotland. This is timely as the Department of Work and Pensions proposes to introduce a pilot cashbased allowance for the private rented sector. One of the ÎpathfindersÌ will be in Scotland. After the introduction, Section 2 sets out the social housing policy framework in terms of Scottish and UK competencies. Section 3 describes the present Housing Benefit system. Section 4 outlines the proposed reforms of using Benefit, restructure rents and widen choice-based allocation of social housing. The specifics of the imminent reforms to Housing Benefits in the private sector, the ÎPathfinderÌ proposals, are also discussed. This leads on, in Section 5, to an examination of the scope for developing a Scottish alternative to either Housing Benefit as it is currently configured or in terms of the proposed cash allowance that is at the heart of current reforms. Section 6 concludes the discussion.