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Archive for October 12th, 2009

The conservative’s proposal on Welfare reform

The conservatives have proposed
1. To simplify Labour’s different programmes into one single back-to-work programme for everyone on out of work benefits. This is new; whilst there have been calls for a Single Working Age Benefit (SWAB) no government has actually brought this in – although it has been said that the new Employment Support Allowance (ESA) goes some way towards this.

2. The Conservatives have proposed that the Work Programme will include back into work support for the 2.6 million people claiming Incapacity Benefits who are currently excluded by Labour. This is not new. All new Incapacity Benefit (IB) claimants will be placed on the new Employment Support Allowance which is geared towards identifying what these potential claimants ‘can do’ as opposed to what they cannot do. The Pathways to Work initiative was designed specifically to help IB claimants back into work. This announcement by the conservatives is therefore not new.

3. The Conservatives will abolish the Treasury’s rule that prevents the Government paying providers using the benefits saved once someone has a job. The conservatives have explained that this will allow them to offer support to the 2.6 million people on Incapacity Benefit. This is known as the AME/DEL problem and the government is already piloting this.

4. The conservative announcement included that they would offer greater support to young unemployed by referring them on to the Work Programme after 6 months of unemployment compared to a year under the Flexible New Deal. This is a significant development. Providers engaged in Welfare to work have been saying that those who are long-term unemployed – not just young people- need to be referred much sooner than 12 months.

5. The conservatives will pay providers by results with a focus on truly sustainable outcomes and bigger rewards for getting the hardest to help into a job. Flexible New Deal already accounts for this; however David Freud added that sustainable jobs should be 12 to 18 months. The government accepted this and is now working towards that with sustainability being increased from 13 weeks to 26 weeks and it will increase further.

6. The conservative plan essentially removes the exclusivity of JobCentre Plus provision and support between 6 months and a year. This is a faster and potentially more brutal approach to reviewing all – IB – claimants.

7. The conservatives say that one in five IB claimant is not entitled to the benefit; this means that 500,000 would be forced onto a lower benefit. To meet the target of clearing the backlog 3000 IB claimants would have to be processed every day. In contrast, the government has only committed to 10,000 assessments per week. Other than that it is not terribly different to Labour’s approach.

8. David Cameron’s commitment to use the private and voluntary sectors is already in place.

There is one area providers will have difficulty. Under the Conservative announcement welfare to work providers will receive only 20% of cash when they place a claimant into work, the remainder will be paid after the former claimant has been off benefits for a year. This will have serious cash flow implications for providers who are already being squeezed by the Flexible New Deal.

The conservative leader missed the opportunity to build on the report by Iain Duncan-Smith -Centre for Social Justice.
I am not suggesting that the Centre has got it right in all areas but it is a bold and courageous foray into an emotive and complicated area of policy.

As a result of the economic crisis, the government’s commitment to seeing full employment has been unceremoniously buried. The plans presented by Iain and his Centre for Social Justice will surprisingly do very little if anything to reduce the overall benefit count and rather than saving money it will cost more £3.6bn.

One would be forgiven for concluding that in these straightened times what is the point of such a proposal. However, if you pause for thought you will see that there is method in this madness.

• Firstly his proposals for a Universal Work Credit and Universal Life Credit would immediately simplify the entire benefit and employment system reducing the tiresome stream of 51 separate working age benefits into two simple streams. To give it credit, his conservative announcement did allude to a single benefit.

• Secondly, under Iain’s scheme no one would be disadvantaged. There would also not be a reduction in out of work benefits for any current recipient. This presumably means that many of the existing rules within each benefit will be rolled into the new benefit.

• Thirdly, this would ensure that the complexity of the benefits system, would disappear making it simpler, easier, less stressful, and cheaper to start and stop claims.

• Fourthly it would also remove the fear of the long delays experienced when jobs do not work out and a person has to start a new claim

In all it’s a bold offering from the conservative party, however it is clear that a lot of the proposals are currently happening or about to be implemented.

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