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Research by the Wales Governance Centre (pdf) has concluded that devolving the administration of some social security benefits to Wales (in line with Scotland) could potentially generate a budget surplus for the Welsh Treasury.
11 welfare benefits will be administered by the Scottish Government from April 2020 – the largest of which being disability living allowance – and there’s some support for a similar arrangement in Wales. The report says the UK Government currently spends just over £2billion a year on these 11 benefits in Wales, though spending on welfare has gradually fallen compared to England.
If the welfare benefits were devolved to Wales using the same funding method as Scotland, it could potentially generate a budget surplus of £198million by 2023-24. However, if the Barnett Formula were used, the surplus would be smaller at £5million.