The localisation era

This report is part of the project Safety Nets: social security for families in a devolved UK, funded by the Nuffield Foundation. It examines the growth of localised social security in the UK from 2013, focusing on how responsibilities for discretionary support and Council Tax Reduction (CTR) have shifted from the UK government to local authorities. Localised support makes up only a small share of overall social security spending, but it has expanded significantly, driven first by the 2013 localism reforms and later by the Covid-19 pandemic. The report evaluates when local delivery works well, where it falls short, and what principles should guide any future reform.

The UK has traditionally delivered social security centrally, but the past decade has seen the emergence of a complex patchwork of localised schemes. This has been most prominent in England; Scotland, Wales and Northern Ireland have used their devolved social security powers to deliver the types of support that have been localised in England more often at the national level. At the same time, English councils have faced significant financial pressures, limiting their ability to design generous or consistent local schemes. This has created substantial geographical variation in support, particularly for Council Tax Reduction.

Localisation can work well when secure funding and clear guidance give local authorities the flexibility to tailor support to local needs. But there are downsides. There is an inevitable trade-off with the concept of equity of support provided to people with similar circumstances, and requiring each local authority to design and administer its own schemes can be inefficient. And in practice, the localisation era in England has occurred alongside a significant squeeze of local authority finances, so local authorities choices over how much resource to devote to their new responsibilities for delivering support were highly constrained. The localisation of Council Tax Reduction has been a particular failure, resulting in reduced generosity, inconsistent treatment of similar households, legal challenges, and rising Council Tax arrears. The report concludes that localisation should occur only where local delivery demonstrably improves outcomes, rather than as a vehicle for passing financial responsibility to local government.