Whose Economy: Whose Welfare?

Dr. John Lee

Welfare Reform A major programme of welfare reform

beginning in 1997Active Labour Market Policy Raise employment levels to 80% of W.A.P.Affecting all claimants groups, but…Still some 5 million people on out of work

benefitsReform agenda continues apace with the

‘Work Programme’

3

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009

Incapacity benefits Lone parents on income support JSA

Claimants of main out-of-work benefits

A Punitive Welfare RegimeIn essence the welfare regime in the UK has

always been based on a version of the Poor law:

‘Less Eligibility’ – welfare has to as unattractive as possible

‘Deserving and undeserving poor’ - widows/the able bodied unemployed

Some evidence to suggest the welfare regime adversely affects health and wellbeing(1)

Increasingly punitive:Reassessment of IBLone parents lose Income Support when children

reach age 7Mandatory Work Activity - 3 year loss of benefits Abolition of DLA and mandatory testing for PIP

Incapacity BenefitsA massive programme to reassess

incapacity benefits claimants;Pilots a success (pilots always are)Approximately 33% found fit for work and

‘invited’ to migrate to JSAApproximately 33% transferred to the work

activity group on ESA

VolunteeringBenefit regulations have been altered to

encourage volunteering (e.g. 48 Hour Rule; 16 Hour rule)

Volunteering highly visible in key policy documents

Guidance emphasizes that volunteering does not affect benefit entitlement

Volunteering a ‘work like activity’ for ESA claimants

Volunteering Options Programme for JSA claimants

Get Britain Working – JC+ to actively signpost claimants to volunteering opportunities.

A cost cutting exercise?‘UK Benefit bill = £190 billion; butMost of this is accounted for by pension

payments and payments to childrenSpending on income replacement benefits

and DLA account for only 13% of the total bill for social security (2)

Falling value of benefits - JSA in real terms value is now worth the same as in 1997;

Universal credit will cost 3billion to administer.

JSA64.30pwJSA-C limited to 26 weeksA fifth of the actual, average expenditure

for a single adultHalf of the actual, average expenditure of

single adults in the poorest householdsHalf of the Government’s (income) poverty

line for single adultsTwo-fifths of what is need to reach a

minimum standard of living (3).

Whose Welfare?Welfare Reform programmes have had little

impact (e.g. Pathways to Work; NDDP)Evidence to suggest that it is increased

demand in the labour market which really makes a difference (4)

Significant involvement of the private sector

Work Programme contractors will be paid from benefit savings

Increasing levels of in-work poverty and concern about the real effectiveness of work as a route out of poverty.

So What’s the Point?Reinforce the principle of Less Eligibility?

o Mandatory Work Activity – and loss of benefito Reduced value of benefitso Increased conditionalityo The end of unemployment benefit?

• Remove the category of the ‘Deserving Poor’?

• Abolition of DLA; replaced with mandatory testing for PIP

• Lone parents lose benefits when children reach age 7.

References:1. Nordenmark, M, Strandh, M and Layte, R (2006) The impact of

unemployment benefit systems on the mental well-being of the unemployed in Sweden, Ireland and Great Britain. European Societies, Vol.8, No.1.

2. Kenway, P et al (2010) Working-age ‘welfare’: who gets it, why, and what it costs. York: JRF.

3. Kenway, P (2009) should adult unemployment benefit now be raised. York: JRF.

4. Webster, D et al (2010) Falling incapacity benefit claims in a former industrial city: policy impacts or labour market improvements? Policy Studies, Vol.31, No.32

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