Saturday 6 October 2012

Universal benefits to go?

Britain has a long tradition of universal benefits. Whilst some of those are rightly celebrated as a means to lift some people out of poverty and provide a unifying thread across all sections of society, some of them have become a serious challenge to the public purse.

Politicians who question the usefulness or wisdom of universal benefits, such as free bus passes for all pensioners, run into two problems. First, they sound as if they grudge some of the poorest in society the most minimal types of support. And, second, they need to explain how universal benefits can be re-designed in such a way that they are targeted at the most in need. Means testing, the conventional form of targeting benefits to particular social groups, is an expensive bureaucratic exercise whose cost often exceeds the potential savings.

Whilst universal benefits are only minor expenditure items in large budgets (such as that of Central government or England's), for the devolved administrations in Cardiff, Edinburgh and Belfast some universal benefits constitute a major item of expenditure simply because their devolved budgets are smaller and predominantly in those areas that 'host' universal benefits such as bus passes or prescription charges.

The former Scottish Auditor General has now raised some serious concerns about the culture of 'freebies' from devolved governments. In a BBC interview he argues that the demographic changes over the last 2 decades makes a strong case for reviewing some universal benefits. future projections of the costs of universal benefits support his argument. In the long term, some of the universal benefits are simply unsustainable and it appear also morally questionable why millionaires in Wales or Scotland should receive free prescriptions for medication.

The Scottish Labour leader has also floated some controversial ideas about universal benefits, the first time a Labour leader has ventured into this territory. The Welsh government under Carwin Jones has strongly rejected her argument and insists that universal benefits are here (in Wales) to stay. Yet, the Welsh government's case is even weaker than that of the other devolved governments. With a yawning gap in the budget for the NHS (this year alone about £240 million need to be found to save NHS health boards from bankruptcy), and no new funding settlement for Wales in sight, Carwin Jones hopes for a balanced budget are fast disappearing. So far, he has managed to lay all blame on everyone else but the profligacy and mismanagement of his own government, but he wont be able to do this much longer.

Revisiting the extent and usefulness of universal benefits may just be a starting point to reduce the gap in the Welsh budget. The biggest hurdle for this however may not have anything to do with the number crunching, but with Carwin Jones' character. Looking at universal benefits takes political courage and that is not something the Welsh Labour leader is known for.

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