Former Tory leader issues welfare plans
A blueprint for a wholesale reform of the £74 billion-a-year welfare system has been drawn up by the former Conservative leader Iain Duncan Smith.
His proposed shake up would boost the income of the lowest paid by £5 billion, lift 200,000 children out of poverty and make it more worthwhile for the unemployed to leave the benefit system for low-paid jobs.
The Dynamic Benefits report has been drawn up for Mr Duncan Smith’s think tank The Centre for Social Justice by a team of experts headed up by Stephen Brien, a consultant at management consultants Oliver Wyman.
The report says that households are most likely to be workless when they are headed by a single adult, have two or more children, have children aged seven or under or live in social housing. Sixty per cent of the two million childless adults in social housing are unemployed, it adds.
Mr Duncan Smith, the chair of the CSJ, predicts an increase in the number of long-term unemployed unless the welfare regime is fixed.
‘This time it will manifest itself as large number of younger people permanently excluded from gainful employment. That is why we simply cannot go on talking about the importance of getting people into work while we persist in creating disincentives for the very people we say should be in work.’
The current welfare system is complex and inefficient, Mr Duncan Smith adds. The CSJ report has been presented to the Conservative leader David Cameron and other members of the shadow cabinet as a blueprint for reform.
The publication of the report coincided with the release of the latest Office for National Statistics unemployment data, which shows numbers rose by 210,000 in the three months to July, reaching a 14-year-high of 2.47 million. Claims for unemployment benefit rose by 24,400 between July and August, to reach 1.61 million, the highest level since May 1997.
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Readers' comments (6)
Dave Hollins | 16/09/2009 3:27 pm
So we've had the Tory LGA calling for £16bn council housing debt to be written off and now a Tory think tank calling for an extra £700m to change the benefits system. Yet nationally the Tories are ramping up for slash and burn spending cuts. So I suggest giving no credence to these people and their silly policies until George Osborne pops up with an endorsement and some money.
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St Alban | 16/09/2009 3:49 pm
Don't be so quick to jump all over yet another Tory idea. This one has the potential to be different, actually aimed at doing what it says on the tin. The over emphasis on targeting of benefits has given rise to a whole industry of form fillers and shufflers. It is argued that it cost £4 to pay every £1 of benefit because of the complexity of application and assessment of the many benefits available. Simplifying this to two benefits makes sense, and if the administrative hurdles are removed, could save considerable sums of money, as well as save the brain-ache of trying to make a claim. There is as I say some potential here that needs to be explored and not rejected because of the source.
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Melvin Bone | 16/09/2009 4:06 pm
The CSJ report also wants to reduce the number of benefit/credits from 51 to 2. I'm sure the Humphreys in the Civil Service will put a stop to that.
Its all pie in the sky until we see a proper manifesto. They will be slinging rubbish like this for months.
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Les | 17/09/2009 10:47 am
So we've now discovered that the 'current welfare system is complex and inefficient' Well, I am not a management consultant or member of any think tank but along with millions of others I think I already knew this! It does make one wonder why we require highly paid consultants to tell us the blindingly obvious! I would hope that the Conservatives intend to target the emplyment of these consultants as one area for their proposed cutbacks!
It has been commonly known for over 30 years that the complexity of the benefits system creates huge disincentives for many people to take up employment. Successive governments, Tory and Labour, have talked of the need for the benefits system to be simplified and disincentives removed, yet today we are further away than ever from achieving this. The truth is that politicians and their over-paid advisors 'talk the talk' but do not 'walk the walk' - nothing ever actually changes!
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Peter | 17/09/2009 11:32 am
Though there appears to be some merit to the proposed suggestion but I think this will be binned because because of the current convoluted form filling process (a Tory idea incidently) actaully saves the government some £600m in unclaimed benefits every year.
If anyone who tried to apply for any form of benefits will know what I mean and if you make any mistakes in the application, this could also be classed as 'making a false claim' and all the legal ramification that goes with that.
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St Alban | 17/09/2009 5:17 pm
But the £600M is a false saving against the many times greater cost of creating, checking, analysing, approving and administering the multitude of forms. The real obstacle is the 1,000s of extra civil servants, employed to conduct this mountain of paperwork, refusing to be made redundant by any proposed simpler system.
IDS has recognised that universality of benefits minimises administration, simplifies payment and saves £BNs in government expenditure (just as it used to before universality was scrapped in favour of targeting.
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