Thursday, 18 December 2014

Runaway train

From: Inside edge

The universal credit was meant to be the great prize that would make up for all the pain of welfare cuts but what if it just adds to it?

A range of evidence about the past, present and future of welfare is published today and the results suggest a system that is cracking under the strain even before the big wave of cuts due next April and the phased introduction of the universal credit starting at the same time.

The National Housing Federation (NHF) is highlighting the impact of the first wave of cuts on the number of homeless families living in bed and breakfast. The 44 per cent increase has come in the year since the caps on local housing allowance began.

However, the latest Social Attitudes survey out today suggests welfare reform still enjoys broad public support and that there is less sympathy for the unemployed now than at any time over the last 30 years.

The proportion of people saying that if benefits were less generous people would stand on their own two feet has doubled from 26 per cent in 1991 to 54 per cent in 2011. In previous downturns, public support for more spending on welfare benefits has grown but this time around support is down from 43 per cent in 2001 to just 28 per cent in 2011.

The report suggests that this shift in opinion was nurtured by a tougher stance towards welfare under the last Labour government and has continued under the coalition. 

In that context, the universal credit was meant to be the big reform of the system: a new benefit that would make work pay and give claimants a new sense of personal financial responsibility. 

The cracks in that façade have been deepening over the last few weeks:

  • Divisions have appeared within the government, with a failed attempt to move Iain Duncan Smith from the DWP in the reshuffle and cabinet secretary Sir Jeremy Heywood apparently expressing scepticism about the policy.
  • Responses to the detail from councils, charities and other groups have raised a whole host of concerns about implementation. 
  • Labour is calling for the whole thing to be delayed by a year amid concern about whether the complex computer system will actually work.
  • The Social Security Advisory Committee is reported to be warning IDS that the reforms will be ‘unworkable and unfair’. 
  • And, most spectacularly, Frank Field, the government’s welfare reform tsar, says the universal credit will be a ‘disaster’ that will ‘rot the soul of the low paid’.

Now a report from the Social Market Foundation (SMF) warns that the universal credit will backfire without significant improvements and undermine the government’s aim of boosting people’s sense of personal responsibility by pushing them into debt.

The results are all the more startling coming from a think-tank that has been supportive of the broad thrust of welfare reform and because the research is based on detailed interviews with claimants themselves about how the universal credit will work.

On the credit in general, the SMF warns that moving to a single monthly payment for all benefits will remove the markers and aids that families rely on to budget effectively with little evidence that it will prepare them for going into work.

‘Our research shows this will throw people in at the deep end leaving them to either sink or swim,’ says SMF deputy director Nigel Keohane. And the impact will be felt not just by the families themselves but by those they will end up owning money to, including social landlords.

The report finds widespread mystification about the key housing reforms including the one that has most exercised landlords: the direct payment of money to cover the rent to claimants.  As one claimant put it: ‘I just think, it’s not your money is it? So why does it have to pass through your hands if it’s not your money? You haven’t earned it, you haven’t done anything for it.’

Some people worried about the effect on them personally whole others worried about the effect on other claimants if ‘everyone is going to be in arrears’. The SMF comments that: ‘More generally, the proposal was met with considerable surprise and many were unable to understand what would motivate such a change.’

Where claimants did identify responsibility as an issue, they saw it in terms of the government trying to avoid the administrative work of processing payments rather than trying to boost personal responsibility. Most thought it would just put them under even greater pressure and risk of hardship and debt.

The SMF says that the research results, plus the experience of private landlords and tenants under the local housing allowance, ‘suggest that it will be extremely hard to make the existing universal credit proposal work’ and that it risks undermining the finances of social landlords.

The report proposes that there should be an online budgeting portal. The idea is that claimants would be able to opt in to it and make changes to the way their benefit money was directed before it came into their bank account. That would mean they could choose to have their rent direct paid direct to their landlord and choose to get their benefit weekly rather than monthly.

Iain Duncan Smith and the DWP will no doubt continue to resist calls for changes and stick to their line that the universal credit will make work pay and boost personal responsibility. However, the reform is looking increasingly like a slow motion train crash that everyone else can see is going to happen.

Benefit cuts are already biting and are set to affect far more families from next April with the bedroom tax and benefit cap. The danger is that IDS’s flagship reform will make things worse rather than better. There is still time to stop the train before it is too late. 

Readers' comments (18)

  • This government is more likely to privatise the train than stop it.

    The issue for them is not to achieve a more workable system, or even a cheaper system, but one that shifts accountability from the State to the Individual. A little like the South Yorkshire Police's achievements last time the Tories were in control.

    And the reason is the same. Having cultivated the public opinion to support the cuts in benefit the last thing this government wants is the public later on worrying about the homeless and the starving, those dying of cold and hunger, or unable to pay the medical fees. That would be problematical. The government needs to blame the individual as feckless rather than have them recognised as victims.

    Probably the closest parallel historically would be the late 19th Century famines across Ireland and Scotland. The granaries were full of grain. The State was one of the wealthiest in the world. The elite were gaining more and more personal wealth each year, and had the unrivaled benefit of the means of production. Yet when the food crops that the poor grew to feed themselves failed government was clear that it was not their responsibility to intevene in 'the free market'.

    Clearly the poor deserved to starve for failing to save for just such a situation arising, or for failing to switch their crops ahead of the disaster.

    In Ireland an estimated 1 Million starved to death. In Scotland far fewer died because of the charitable (left wing) tradition of supporting your neighbour led to a church led campaign of communal feeding and assistance (the sort of thing the Tories in Westminster would have made illegal).

    So much stemmed from that disaster and the basic lack of humanity from the elite. The elite lost their outright control of landlordship, having to offer secure homes for fair rents. The elite lost their outright control of democracy as the franchise extended. The elite lost the ability to force people from their home communities because it was their whim.

    It appears, if the Tories get their way, the only thing they will not have reclaimed compared to that they lost all those years ago is our having the vote - but then as there is no real choice other than colour of Tory to vote for, it could be argued that they have clawed that gain back too.

    I wonder what scale of suffering or even death will be required this time around before the State feels a little sorry for its actions and the people recover their identity as the State?

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  • Mike Batt

    IDS does seem like a rabbit caught in the headlights at the moment...

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  • Rick Campbell

    This survey says --

    http://www.guardian.co.uk/politics/2012/sep/17/public-spending-higher-taxes-survey

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  • Rick Campbell

    And this survey indicates toughening attitudes on welfare -- http://www.bbc.co.uk/news/uk-19621020#?utm_source=twitterfeed&utm_medium=twitter

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  • Housing Troll

    None of this matters because the IT system will never work anyway!

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  • Mike Batt

    The IT system will work.

    Just not enough to cope with the demand...

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  • Christopher Dale

    It will matter Housing Troll when the IT system fails to make payments and there's nobody at the end of a phone, or an office to visit, to try and get it sorted out when you've got food, clothes etc to buy for the kids. Untold misery is all that UC will cause; and all because of IDS blindness to its faults and his failure to listen.

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  • Mike Batt

    I agree IF. Currently if one benefit fails or is suspended for review claimants can survive on other benefits. With UC they will be left dead in the water if it is stopped.

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  • Chris

    Why in the water?

    I think Melvin exposes how the benefit savings will be made - after deducting the cost of a paupers grave, of course.

    (I wonder where my Avatar went from my first post? - as an example of the ease of ICT failures!)

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  • Housing Troll

    Iron Fist and Melvin - of course I am aware that if the IT system does not work and UC is pushed forward it would matter and indeed have dire consequences. I was being absolutely literal in my assertion meaning that because they will not be able to create the IT system required for UC, it will never come to pass.

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  • Chris

    Housing Troll - haveyou considered replacing your avatar with that of an ostrich. It would appear to better match your view of upcomming government policy.

    Hoping it may not occur hardly helps when it happens. Indeed, you are repeating the IDS mistake of assuming it will all come out right in the end (although in his case I suppose he is more prepared to accept the collatoral damage - so long as it's not on his lawn.)

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  • The con dems have already rushed through severe
    leglislation to impose £18 billion of benefit cuts
    onto the poorest people in the uk ,creating hugh
    shortfalls for those families in meeting the basic
    costs of living , especially regarding their vital
    housing costs. The con dems have also called
    for a further £10 billion of benefit cuts , as well
    as passing leglislation to create the Universal
    Credit ,which is supposed to be repalcing 6 other
    benefits.
    There has already been 30 years of welfare reform
    including the previous biggest change of making
    all working age claimants use DWP / J obcentre
    plus offices , who work alongside local councils to
    administer housing and coucil tax benefits.
    So why bring in more drastic changes ?
    UC seems like another oppertunity for the condems to dismantle benefit claimnats rights.

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  • Housing Troll

    @Mr Lectern, although I have no difficulty communicating in the outside world for what ever reason the readers on IH seem very keen to be pedants!

    I am not making any mistake because I am not in a position of power to do anything about UC. I would have to have a massively inflated ego to think that what I write here would have any consequence.

    Therefore, rather than spending my time writing essays about why I believe UC will fail, which I believe it will, I have instead chosen to summarise the inevitable failure by stating my belief that the fundamental apparatus, the IT system will not work. This belief is founded in the information gleaned from numerous sources.

    That is not me choosing to ignore the problem, that is me understanding that I am not in a position of power to do anything about it, like the vast majority writing here.

    Everyone else is free to write what they will about UC but I suspect if they had any form of power to change the situation their time and energy would be spent writing to IDS himself.

    Is this clear enough now? Jeeez...

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  • Chris

    Fair enough Housing Troll. Personally I think you underestimate the power of an individual, and definately the power of individuals operating collectively, but that's another debate.

    If you truly believe what you write on these pages makes no difference, why do you do it at all?

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  • Housing Troll

    @Mr Lectern, I don't think you are in a position to evaluate my philosophy on the power of the individual by a string of posts on the IH comments section.

    I did not say writing here does not make a difference, of course it does. For example although on this occasion my comment was flippant it highlighted the IT system which, in addition to the main article, should serve, if even to a small extent, to provoke some form of thought in the mind of the reader. That is the difference it makes and that is why I post, just like the rest of you.

    However, as David Cameron, in many ways IDS' boss, cannot get IDS to change course, I am sceptical that what I write here will have the consequence of changing government policy on the issue.

    You will note on other areas where I am able to relate direct insight from personal experience I have done so. What I have not done is post something in the vein of the stereotypical black cabbie which seeks to put the world to rights and offer all the answers.

    I don't have all the answers, where I believe there is a valid point to raise I shall raise it. Where I have valid experience, I will communicate it.

    Is this a sufficient explanation?

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  • Housing Troll

    @Mr Lectern, now as I have explained myself, would you be able to offer as sensible an explanation for your post at @2pm? The first paragraph in particular strikes me as unnecessary.

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  • Chris

    Perhaps you would have prefered the less semantically flowered 'why are you sticking your head in the sand on this issue. In which case I apologise for serving my own humour instead of yours HT.

    I do not judge your views based on a selection of posts, but I do contest your statement of not being able to do anything about it (re the subject under debate). Indeed, you have shared your view, which is by definition doing something.

    If you want to do something, either pro or anti a government proposal, there are many avenues that you could pursue, should you chose to. That is true of each and every individual for we are equally empowered if not equally capable.

    I do not understand why you feel Cameron is unable to cause IDS to change course. For him to do so he would first have to wish such to happen. Why do you think Cameron and IDS are at odds on this issue, or that IDS is not following the prefered direction of the party. What knowledge are you not sharing about this Housing Troll?

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  • Housing Troll

    @Mr Lectern, really sorry but that really is not worth my time to reply to. I'll let everyone move on.

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