Here is an extract from the piece in today's Observer which suggests the party is considering embracing a policy which would be a radical piece of decentralisation and localism:

Controversial plans to decentralise the welfare state by giving councils the right to set their own regional levels of benefit are being considered by the Tories.

The ideas, floated under the John Major government in 1995 but rejected as too radical, are being examined as part of David Cameron's push to devolve as much power as possible to the local level and away
from Whitehall. They would mean councils being handed a lump sum from
Whitehall to spend as they want on welfare and employment programmes,
rather than the entire system being driven centrally, with uniform
benefit levels being set nationally.

Last night Lord
Hanningfield, a Tory spokesman on business in the Lords and leader of
Essex County Council, said the changes would mean money being spent
more efficiently and according to local needs. "From David Cameron
down, I think everyone believes this sort of thing should be looked
at," he said.

His preference would be for local authorities to
determine for themselves how much should be spent on benefits and
employment programmes, and who would be eligible. Councils would be
free to set benefit levels according to people's ages and the local
cost of living. "The cost of living is far higher in Essex, say, than
it is in Cornwall, so people do not need the same level of benefit," he
said. "And someone who is 17 does not need the same amount as someone
who is 30."

Jonathan Isaby