Devolution's difference

Those of you in Scotland may have raised an eyebrow this week if you had read the media reports claiming Scotland was the most affluent country in Britain. Really? The recession is biting hard, factories have closed and gloomy projections are made on public spending cuts in the years ahead. Austerity not affluence is grabbing the headlines. So what is this about?

According to our latest research, Scotland made the most progress in terms of employment and poverty levels during the first 10 years of devolution. In fact, Scotland was the most improved part of the UK on 6 of the 16 indicators used to measure disadvantage, followed by the North East of England on 5.

The most notable success was a halving of pensioner poverty and an 8% reduction in child poverty – figures Scotland should be proud of. With the number of people without paid work falling by 5%, it seems that Scotland made steady progress for much of the decade. But this is not the same as becoming the most affluent part of the UK. Fewer people fell below the poverty line, but many in low-paid work didn’t move far above it. What we used to call the North-South divide in Britain narrowed modestly, but it still exists.

The big question is: are Scotland’s falling poverty levels down to devolution? The answer is probably not. The areas in which Scotland has improved the most are much more influenced by UK reserved powers than by devolved policies. Economic factors and policies reserved to Westminster, including welfare-to-work and tax-benefit reforms, have played a major role in alleviating poverty across the UK, including Scotland.

Having said that some devolved policies have started to make a dent in disadvantage. In Scotland’s case, policies on social housing, homelessness and some employment and training initiatives like Working for Families have improved the lives of vulnerable people – though often on too small a scale. The Welsh approach to social care for older people is bringing most benefit to those on the margins of poverty (the Scottish approach is more comprehensive and more costly). Regeneration was another winner for devolved powers particularly in Wales – where the Communities First policy has been supported consistently for 10 years – and in England where devolution has occurred by proxy.

Scotland has made progress during the devolution years. But the scale of likely cuts in public spending will cause some of the gains seen in the last 10 years to unravel. This will create the first major test for devolution. A sharper focus will be needed at Westminster and in the devolved countries on how to lessen the impact on disadvantaged people and places, and to prepare for a just and sustainable recovery.

Jim McCormick
JRF Scotland Advisor and co-author of Devolution's impact on low-income people and this item that was published on the Times website this week.