Archive for February 17th, 2011

Duncan-Smith reveals housing benefit “Adjustmemt”

Unemployed people will not face a 10% cut in housing benefit, it was disclosed today.  The Welfare Reform Bill, published today, was amended to ensure those out of work for more than a year will not be penalised.  The cut had been proposed by the Chancellor, George Osborne, during the government’s emergency budget in June.  The omission of this proposed sanction has been deemed the second U-Turn of the week for the government as the coalition was forced to repeal its plans to sell-off forests in England.

yesMinister sees this as evidence that the Government is really listening!

Mr. Duncan Smith explained on the Today Programme:

“You won’t see this (10% housing benefit cut) in the bill for one very good reason – the more we looked at this, the more we reviewed the interplay between that reduction at 12 months and the Universal Credit and the Work Programme, it meant that all of those people were going to move on to the Work Programme anyway, so they would be having intensive help to get them back to work.”

The Guardian has reported that the housing benefit cuts were withdrawn under the insistence of the Deputy Prime Minister Nick Clegg MP, who, along with his Liberal Democrat colleague was concerned the proposal would hit the poor twice.  There were also doubts as to whether private landlords would consider renting to those claiming jobseekers allowance, a provision that would be dramatically reduced had the original government proposal gone through.  However, Mr. Duncan-Smith has refuted the suggestion that the cuts were omitted due to opposition from his coalition colleagues, stating “I am fully at one with Nick on this.”

Shadow Work and Pensions Secretary, Liam Byrne commented:

“Labour has consistently called on the Tory-led government to abandon this change so we welcome their U-turn.  They need a Plan B for the economy and a bigger welfare to work programme. At the moment they have neither.”

Not sure that the opposition has much credibility in this area as many see the current abuse of the benefit system as being  caused by their very relaxed approach to welfare.



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Association of Learning Providers

Press release – 17 February 2011

Subject: Welfare Reform Bill

‘A sustainable Work Programme is required to make a success of welfare reform’, say providers

The employment and training providers who will be delivering the government’s new Work Programme have welcomed the general thrust of today’s welfare reform announcements, but have expressed serious concerns about the long-term viability of the work-related requirements when their success is crucial in the response to growing unemployment.

While supportive of the general payment by results principles behind it, the providers’ representative body, the Association of Learning Providers (ALP), believes that the design of the Work Programme is fraught with risks which may impact significantly on the number of unemployed people who can benefit from it.  Prior to this week’s news reports, ALP had already expressed concerns to the Commons select committee that the DWP’s volume projections are felt to lack transparency and credibility.

ALP has submitted to the DWP a list of over 10 significant concerns on the Work Programme, which will be introduced under the government’s Welfare Reform Bill published today. Some of these are technical but overall they relate to:

  • the tightness of the programme’s finances and the trickle-down effect of this on a supply chain which is more vulnerable to financial instability than the large prime contractors holding the contracts with DWP
  • the very high performance expectations that equate to the highest levels that the previous New Deals ever achieved in a much more favourable economic conditions.

Prime contractors interested in delivering the Work Programme were required to submit their bids by last Friday and it was noticeable that some had withdrawn from bidding in some regions.  Feedback to ALP from its member providers (no less than 8 of the top 10 DWP providers are members of ALP) suggests a major factor in this is that the high risk contracts will require extensive capitalisation in an economic period of risk aversion by banks and constrained business lending patterns.

The squeeze on the prime contractors may be passed down to the smaller sub-contractors, including many from the voluntary sector, to the point that more providers will drop out of the programme, leaving gaps in provision to which the government will have to respond quickly and at greater cost to the taxpayer.

Graham Hoyle OBE, ALP chief executive, said, “Providers feel that their contract terms are of unprecedentedly high risk to the extent that the whole programme’s operation may itself be in danger – let alone the danger it presents to suppliers. With the programme due to begin in the summer, we call on ministers to urgently reconsider the terms of a fundamental tenet of its public service reforms.”

ALP’s recent submission to the DWP on its concerns about the Work Programme can be downloaded here:


ALP is also calling for a cross-departmental response to the large increase in youth unemployment.  While it has strongly welcomed the government’s backing of apprenticeships, it believes that other areas of provision, such as the DfE’s Foundation Learning programme, for the NEET group need addressing urgently.


Contact Aidan Relf on 07710 305182

Notes to editors:

1. About the Association of Learning Providers

The Association of Learning Providers (ALP) represents the interests of a range of organisations delivering state-funded vocational learning and employment placement. The majority of our 550+ member organisations are independent providers holding contracts with or through the Department of Business, Innovation and Skills (BIS), Department of Education (DFE) and Department of Work and Pensions (DWP), for the provision of a wide-range of work-based and work-related learning. Amongst our members we also have a number of consultants, regional networks, and FE colleges in membership, alongside well over 50 charities, giving ALP a well rounded and comprehensive perspective and insight on matters relating to its remit.

With regard to DWP provision, around 80 of our members have declared they currently hold welfare-to-work contracts, but including subcontractors we estimate the numbers involved in this sector to be considerably in excess of this. No less than 8 of the Top 10 DWP providers are members of ALP, accounting between them for nearly £560m of welfare-to-work expenditure out of a combined spend of over £930m for the Top 40 providers. Combined with the extensive number of DWP subcontractors in membership we therefore expect ALP members to be heavily represented in delivery of the planned Work Programme.

ALP’s website with all recent written submissions can be accessed at: www.learningproviders.org.uk.

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Welfare Reform Bill in Brief

Universal Credit is the single state-sponsored payment that will combine all current individual benefits. As a result the following benefits will be abolished when the bill comes into effect:

  • income-based jobseeker’s allowance under the Jobseekers Act 1995;
  • income-related employment and support allowance under Part 1 of the Welfare Reform Act 2007;
  • income support under section 124 of the Social Security Contributions and Benefits Act 1992;
  • housing benefit under section 130 of that Act;
  • council tax benefit under section 131 of that Act;
  • child tax credit and working tax credit under the Tax Credits Act 2002
  • Disability Living allowance

Who’s entitled?

Both single people and couples are able to apply for the Universal Credit if they meet the basic and financial conditions, as an individual or jointly:

  • Over 18
  • Under 65
  • Not receiving education
  • Must accept the DWP Claimant Commitment (Section 62 explanatory notes)

The amount of credit entitlement depends on the claimant/claimants’ needs, including such factors as:

  • the fact that a claimant has limited capability for work;
  • the fact that a claimant has limited capability for work and work-related activity;
  • the fact that a claimant has regular and substantial caring responsibilities for a severely disabled person (35)

Work-related requirements

Depending on personal circumstance, claimants for work-related benefit will be obliged to attend one or all the following (68-77):

  • a work-focused interview requirement (see section 15 of Bill);
  • a work preparation requirement (see section 16 of Bill);
  • a work search requirement (see section 17 of Bill);
  • a work availability requirement, i.e. willing immediately to take up paid work or more paid work or better-paid work (see section 18 of Bill)

The work-related requirements which may be imposed on a claimant depend on which of the following groups the claimant falls into:

  • no work-related requirements (see section 19 of Bill);
  • work-focused interview requirement only (see section 20 of Bill);
  • work-focused interview and work preparation requirements only (see section 21 of Bill);
  • all work-related requirements (see section 22 of Bill).

Sanctions (86-87) will be put in place should a claimant:

  • fails for no good reason to comply with a requirement imposed by the
  • Secretary of State under a work preparation requirement to undertake
  • a work placement of a prescribed description;
  • fails for no good reason to comply with a requirement imposed by the
  • Secretary of State under a work search requirement to apply for a
  • particular vacancy for paid work;
  • fails for no good reason to comply with a work availability requirement
  • by not taking up an offer of paid work;
  • by reason of misconduct, or voluntarily and for no good reason, ceases
  • paid work or loses pay. Universal credit and other benefits

Higher sanctions may cover up to three years of claims.

Those with a limited capacity to work (190) will have to undergo a work capability assessment the details of which are under review following Professor Harrington’s report. Depending on personal circumstance those currently claiming Employment Support Allowance will not have to be reassessed.

Disability Living Allowance

In addition to the Universal Credit, the DWP have also introduced the Personal Independence Payment (337), a non-means tested, non-taxable, cash benefit that will replace Disability Living allowance and mobility support when they are abolished. Claimants under the age of 65, will be able to apply for either or both the daily living component or mobility component. There will be a standard and enhanced rate for this provision which will be determined by medical assessments, details of which will be set out in secondary legislation but the medical examination will determine:

“Whether a person’s ability to carry out daily living activities is limited

a) by the person’s physical or mental condition;

b) whether a person’s ability to carry out daily living activities is severely limited by the person’s physical or mental condition;

c) whether a person’s ability to carry out mobility activities is limited by the person’s physical or mental condition;

d) whether a person’s ability to carry out mobility activities is severely limited by the person’s physical or mental condition” (section 878 of Bill)

The daily living component may fund services such as medical or other treatment which the person is undergoing as an inpatient, accommodation, board, personal care, such other services as may be prescribed (373). Inpatients and those in residential care homes will not be able to apply for the daily living component.

The Government estimates that the introduction of the Universal Credit will cost £2 billion but will result in £7340 million of savings in benefit expenditure between 2012 and 2015.

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The Welfare Reform Bill!

Follow this link: HERE

Explanatory notes:  HERE

Full summary coming up shortly….

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