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Holyrood offered powers to offset benefit changes in Scotland Holyrood offered powers to offset housing benefit changes in Scotland
(about 1 hour later)
Holyrood is to be given a new power which will allow Scottish ministers to spend more money offsetting the impact of housing benefit changes. The UK government has offered to devolve the power to set the cap on Discretionary Housing Payments (DHP) in Scotland.
The move was dubbed the "bedroom tax" by critics, but described by ministers as the removal of a spare room subsidy. The payments have been used by the Scottish government to mitigate the impact of housing benefit changes.
The Scottish government has been trying to mitigate the impact by topping up discretionary housing payments. Scottish ministers had called for a cap to be lifted on the amount of DHP payments it was able to make.
The UK government has now offered to devolve the power to effectively lift a cap on these payments. The UK government has now said it was willing to transfer the power to do so.
This would be done by allowing Scottish ministers to vary what is spent on discretionary housing payments - allowing them to effectively cancel out the changes, which affect an estimated 76,000 people in Scotland. DHPs can be used by local authorities across the UK to provide additional funding for people in receipt of housing benefit who need extra support.
As part of his budget in February, Scottish Finance Secretary John Swinney announced extra funding for discretionary housing payments to help tenants whose benefits are cut because they have a spare room. Spare room subsidy
He said data from the UK government, which controls housing benefits, showed Scottish ministers were permitted to allocate £22.85m on top of the £15m already announced, but this fell short of the £50m total needed. At present each local authority must operate within a formula-based spending cap set by the Department for Work and Pensions.
As part of his budget in February, Scottish Finance Secretary John Swinney announced extra funding for discretionary housing payments in Scotland to help tenants whose benefits are cut because they have a spare room - changes which have been dubbed the "bedroom tax" by critics.
He said data from the UK government, which controls housing benefits, showed Scottish ministers were permitted to allocate £22.85m on top of the £15m already announced.
But this fell short of the £50m total he said was needed to fully mitigate the effects of the removal of the spare room subsidy, which affects an estimated 76,000 Scottish households.
Mr Swinney had asked the UK government to lift the cap.Mr Swinney had asked the UK government to lift the cap.
The UK government has now proposed giving the Scottish government the flexibility to pass on more funding from its existing block grant to local authorities.
'Pragmatic approach'
It would be up to the Scottish government and local authorities how they chose to allocate the money. would mean that the Scottish government would have the power to set the DHP cap for Scottish local authorities in future.
Scotland Office Minister David Mundell said the power would be transferred to the Scottish government through a Section 63 Order, which would require the agreement of the UK and Scottish governments before being approved by both the UK and Scottish Parliaments.
Mr Mundell said: "I have completed a programme of visits to all Scottish local authorities and believe that transferring this power to the Scottish government is the correct thing to do.
"The UK government believes in taking a pragmatic approach to devolution and we believe in a United Kingdom that gives Scotland the best of both worlds. I hope that officials from both governments will now be able to take this forward."
He has written to Scottish Deputy First Minister Nicola Sturgeon outlining the proposal.
The Scottish government has not yet issued a response.