The localisation era

Social security in the UK is typically understood as a system of benefits, designed and administered by national governments, with rules that determine when a family can receive support and how much they can get. In recent years, there has been a growing recognition of the ways in which the UK social security system interacts with devolution at this national level – specifically in Scotland and Northern Ireland. But there is also a small yet increasingly important network of schemes where decisions about who gets support and how it is delivered are handled by local authorities.

This report analyses the provision of, and spending on, ‘localised social security’ (by which we mean support controlled by local authorities). This remains a small part of the overall system – spending on localised support represented 1.2 per cent of overall social security spending in 2024-25 – but it is now 122-times higher in real terms than it was in 2010-11.

The report goes on to consider when delivering support locally is an appropriate and effective alternative to delivering support at a national level, and how the current range of localised support – the vast majority of which is done by English local authorities – meets these principles. Localised support has been most successful where the UK government has provided secure funding and clear, but not constraining, guidance. But the UK government should also avoid a pattern seen in recent years of overclaiming what is possible for local authorities to achieve with what is still a very small proportion of overall social security spending. Council Tax Reduction is an example of localisation done badly – suffering from some of the downsides of localisation without benefiting from many of the upsides. Finally, we cannot ignore that the localisation era in England has occurred alongside sharp reductions in local authority spending power, meaning large financial pressures have crowded out funding for non-statutory responsibilities, including local social security. Localisation could be an opportunity to reflect local priorities, but in practice it has been used as a vehicle to make cuts in a politically expedient way.

Annual spending on localised support in the UK averaged £33 million in each year between 2001-02 and 2012-13 (in 2025-26 prices) but jumped to £3.4 billion in 2013-14, reached a peak of £4.2 billion in 2021-22, before a slight fall back to £3.9 billion in 2024-25. The step up in 2013-14 reflected the then government’s ‘localism’ agenda, which was centered around an argument that local actors were best-placed to diagnose and address the underlying causes of hardship facing their residents. This post-2013 era of localisation has largely been an English phenomenon; the other UK nations 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. As a result, 96 per cent of expenditure on localised social security in 2024-25 was in England, reflecting an increased divergence since 2013 between the UK’s four nations in the level of government at which certain forms of support are delivered.

Most localised support schemes are discretionary, where decisions around who receives support and how much they get are made on a case-by-case basis by local authority staff. But the biggest component of localised support by spending volume is entitlement-based, where local authorities design rules of eligibility and entitlement. That’s due to one scheme – working-age Council Tax Reduction, now controlled by English local authorities – which has made up 75 per cent of all spending on localised support in the UK since 2013-14.

The post-2013 era of localisation has seen shifts in local authorities’ responsibilities for delivering discretionary support, with its primary purpose fluctuating between providing crisis support and mitigating UK welfare reforms. Its level and security of funding has also varied over time.

The main change in 2013-14 was the replacement of the discretionary elements of the (UK-wide, DWP-run and Jobcentre-delivered) Social Fund crisis support schemes with different configurations of discretionary crisis support across the UK’s four nations. In England, local authorities received funding from central government to provide their own schemes, known as Local Welfare Assistance. This funding was not ring-fenced, and pressures on local authority budgets meant that spending fell from £235 million in 2013-14 (in 2025-26 prices) to £45 million by 2019-20, at which point one-in-four English local authorities had no crisis support provision at all. By contrast, schemes with discretion operating at the national level and with national funding were set up in Wales (the Discretionary Assistance Fund) and Northern Ireland (Discretionary Support), while Scotland established a localised discretionary scheme (the Scottish Welfare Fund) that had ring-fenced national funding.

2013-14 also saw a seven-fold rise in spending on Discretionary Housing Payments (DHPs) in Great Britain compared with 2011-12 (a rise to £247 million from £32 million in 2025-26 prices). The DWP made this change and ring-fenced the funding to help local authorities blunt some of the sharpest consequences of contemporary cuts to housing support and the introduction of the benefit cap. But DHP spending has declined more recently: since 2017-18, real spending in England and Wales has fallen from £217 million in 2017-18 to £102 million in 2024-25 due to cuts in the grants given to local authorities. In contrast, since DHPs were devolved to Scotland in 2017-18, spending has increased from £78 million to £92 million in 2024-25 (both in 2025-26 prices). This reflects an approach taken by the Scottish Government partly to use DHPs to automatically mitigate some UK government welfare cuts in full, in effect sidestepping their supposedly ‘discretionary’ element.

The Covid-19 pandemic reversed the trend of falling spending on local discretionary support. The establishment of the Household Support Fund (HSF) in 2021 initially provided £500 million for six months to local authorities in England (and to the devolved nations through Barnett-formula funding). The HSF was renewed in 2022 as the pandemic gave way to the cost of living crisis and has continued since. From April 2026, the HSF and DHPs will be combined into the new Crisis and Resilience Fund, which currently has confirmed funding up to March 2029, albeit at a slightly lower real-terms level than the original HSF.

This fall and then rapid rise saw overall local discretionary spending reach a peak of £1.3 billion in 2022-23 (in 2025-26 prices), after fluctuating between £371 million and £435 million between 2015-16 and 2019-20. Nevertheless, localised discretionary support remains a small part of the UK’s social security system, at 0.4 per cent of total UK social security spending in 2024-25.

The other category of localised support – that based on locally designed entitlement rules rather than case-by-case discretion – is currently represented by just one type of support, working-age Council Tax Reduction (CTR) in England, which was localised from the GB-wide Council Tax Benefit (CTB) in 2013. As part of this process, powers for delivering Council Tax Reduction were also devolved to Scotland and Wales, but both nations decided to deliver it at a national level under the old CTB parameters rather than localise it. (Northern Ireland has Rates instead of Council Tax, support for which is delivered through a national entitlement-based system).

Localisation in England came alongside a reform to the way support for Council Tax was funded: local authorities were given non-ring-fenced grants to fund their CTR schemes, based on 90 per cent of the total forecast spending on Council Tax Benefit, rather than being refunded for their actual costs, meaning they have had to provide less generous working-age schemes than CTB or find additional funds. 70 per cent of English local authorities have now reduced their maximum level of CTR below 100 per cent of Council Tax liability (the level in the old CTB) for standard claims – with the least generous covering only 50 per cent of a Council Tax bill. Despite real-terms increases in Council Tax liability, real spending on support for Council Tax has fallen by 31 per cent since the year before it was localised, and the caseload has fallen from 5.9 million claimants in 2012-13 to 3.7 million in 2024-25.

There are two big implications of these changes. One is that the support available varies hugely within England. A family living in a Band D property and receiving the maximum level of CTR in Doncaster would pay no Council Tax in 2025-26, but if they moved across the border to North Lincolnshire, which has a maximum CTR of 50 per cent of Council Tax liability and caps support at Band B liability, they would have to pay nearly £1,400. Another is that average support levels are lower in England than in other parts of the UK. In the average local authority in England, a family with an average Council Tax liability receiving maximum CTR would have to pay £248 per year, compared to nothing in Scotland and Wales.

It can be argued that localising social security allows the design, administration and allocation of support to benefit from the knowledge of local decision makers (by, for example, responding to specific local needs and contexts, designing systems that link with other forms of local support, and providing some services more efficiently). Proponents also argue that it can give local authorities a direct financial interest in their residents’ circumstances, and that it allows local government to respond to the preferences of local voters.

But localisation can have downsides. First, there is an inevitable trade-off between providing locally-tailored support and the concept of fairness and equity in the support provided to people with similar circumstances across different locations. Second, compared to a national programme, having every local authority design and administer its own schemes could be inefficient, taking up resources that could be spent more usefully elsewhere. It can also increase confusion among residents or those providing advice and support and so lead to lower take-up.

As well as these principled arguments on both sides, the way that local authorities in England are funded also has practical implications for how we should think about localisation. In reality, local authorities face more difficult financial or fiscal choices than does the central UK government: they cannot borrow to fund day-to-day spending; they have less control over their revenue streams as their ability to increase Council Tax is limited; much of their other spending is driven by unavoidable statutory responsibilities; and they have faced significant cuts to their overall funding from central government in recent years. So, we must recognise that the localisation agenda in England has involved local authorities being given responsibilities for delivering support without them having many realistic choices over how much resource to devote to these.

Arguably, it was the non-ring-fencing of funding for Local Welfare Assistance (combined with the tough financial circumstances of local authorities) that resulted in the fracturing of crisis support provision in England in the 2010s. And, although the HSF was ring-fenced, the short-term and often last-minute funding settlements between 2022 and 2025 gave local authorities little time to design effective schemes. Fortunately, most of the more recent incarnations of localised discretionary support schemes have been designed with these failings in mind. The HSF and forthcoming Crisis and Resilience Fund in England, the Scottish Welfare Fund, and DHPs across Great Britain have centralised ring-fenced funding with local decision-making around allocation and delivery (although with varying levels of flexibility around the extent of discretion given to local authorities).

But some elements of existing schemes remain at odds with the principles of localisation. For example, the widespread use of HSF to meet ongoing costs, such as providing Free School Meals support during school holidays, may not be the best use of localised discretionary funds. While there may be some benefits through local coordination of services, the predictability of such needs means the utility of local actors’ specific knowledge is less clear than it is for providing case-by-case crisis support. These needs could arguably be better served through the mainstream social security system, which would free up localised funds for types of support that more obviously benefit from local delivery.

More generally, we should not forget that cuts to the UK-wide entitlement-based social security system have meant local authorities face enormous challenges in providing adequate support with small budgets, and have voiced concerns that people are increasingly relying on what could be temporary schemes to meet permanent shortfalls between their income and costs.

Working-age Council Tax Reduction in England is falling into many of the pitfalls of localisation. The principles for this type of support are already well-established in the UK social security system – entitlement is based on need, has consistent rules around deductions and exemptions, and is reduced smoothly as earned income increases. Requiring each local authority to design and publish its own scheme is, at best, inefficient, but has also led to legal challenges as local authorities have introduced schemes that have, for example, double-counted certain income sources or discriminated against specific groups. Many local authorities have turned to ‘income-banded’ CTR schemes, in part to reduce their own administration costs, but in doing so have reintroduced the sort of cliff-edges into the social security system that Universal Credit was supposed to eliminate.

What about the idea that localised CTR allows for people to affect the design of local schemes through the ballot box? A quantitative examination of the variation in CTR generosity shows that it is correlated with local authorities’ political control: specifically, Conservative-run local authorities have less generous schemes (all other things equal) than local authorities run by other parties. But local decision-making is evidently highly constrained by funding, with greater financial pressures for local authorities being correlated with less generous schemes. Across England, less generous schemes are more likely to be found in areas with higher levels of deprivation and higher Council Tax bills, suggesting that localisation has, on balance, weakened support for those most likely to be struggling to pay Council Tax. Indeed, Council Tax arrears have risen every year since CTR was localised (after falling for three years beforehand) as families have struggled with the increased burden, and bills are widely expected to continue to rise at 5 per cent a year over the rest of this Parliament.

The alternative to continuing with localised CTR would be to return its design and funding to DWP (i.e. ‘centralising’ CTR). The impact on overall spending on CTR awards would depend on how generous a new centralised scheme would be: centralising CTR under the current ‘default’ scheme, which mirrors the old Council Tax Benefit and covers up to 100 per cent of Council Tax liability, would cost around £400 million more in higher support than the current funding model in 2029-30, and would equalise support between England, Scotland and Wales. There would also be a question of whether to roll it into Universal Credit and Pension Credit or keep it as a separate benefit.

Localised support is not a well-understood aspect of the UK social security system, but since 2013 it has become an increasingly important part of the support that is available to low-income families. But the post-2013 localisation era has had mixed success. In theory, most of the current localised discretionary schemes meet most of the principles determining when localisation should be effective, and in practice these schemes are frequently described as a vital final safety net to prevent destitution. But there are ongoing tensions around whether this form of support can meet the demands placed on it, both from increasing numbers of residents in need and from central government rhetoric that it is there to make up for cuts to the UK social security system that add up to multiple times its budget. Localisation has been ineffective where the design of schemes has hindered local authorities in using their specific local knowledge and proximity to the population to provide efficient and well-targeted support. And it is difficult to see how entitlement-based support like Council Tax Reduction can benefit from each local authority designing their own scheme when we already have well-established principles for how this kind of support should operate.

In the context of highly strained finances, there are significant challenges for local authorities to make the most of the possible benefits of localisation and there is a tension between localisation as a vehicle for greater local choice and as a vehicle for delivering cuts. The future success of localised support will depend on national governments continuing to enable local authorities to deliver the benefits of localisation through providing secure funding and effective guidance, while avoiding constraining them with prescriptive rules over who gets support and how much. But support that does not work effectively when localised – specifically Council Tax Reduction in England – should be returned to central funding and delivery.