Posts Tagged ‘Freud’

Watch out for next move in welfare reform battle

The governments defeat in the Lords may just be a temporary discomfort …… Did you know that…..


…The House of Lords debates legislation, and has power to amend or reject bills. However, the power of the Lords to reject a bill passed by the House of Commons is severely restricted by the Parliament Acts. Under those Acts, certain types of bills may be presented for the Royal Assent  without the consent of the House of Lords (i.e. the Commons can override the Lords’ veto).


Most importantly ..
The House of Lords cannot delay a money bill (a bill that, in the view of the Speaker of the House of Commons, solely concerns national taxation or public funds) for more than one month.

Ministers simply need to make the case that the Lords has acted outside its jurisdiction or that its actions impinge on taxation / money. FINANCIAL matters :::::::::

Lord Freud will rise again: not on the third day ,,,,, but within the month



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Call for Evidence – Support for Mortgage Interest (SMI)

The Minister for Welfare Reform has called for experts and the wider public to provide their views on SMI. In particular:

  • Whether it is right for future new claimants of SMI to receive support indefinitely without the taxpayer having an opportunity to recoup some of those costs to help others in need; and,
  • If after a fixed period of time, new claimants who want to continue receiving support should do so in exchange for a charge being levied on the property which would be paid back to the taxpayer upon its sale.

SMI was introduced to help people who were, or are, struggling to make their mortgage payments.  Without the help available through SMI, a claimant would either have to sell their home or have it repossessed if they could not keep up with mortgage payments.

Lord Freud said:

“The current system of SMI payments does not encourage people to get on top of their own finances. It is also not sustainable. Even with today’s low interest rates it costs Government £400million a year.

“We are committed to supporting homeowners to stay in their own homes when times are hard. But in the future this type of support must be fair and affordable so we are seeking views from experts and the wider public, including options for putting a charge on the homes of future claimants so when they sell up we can recoup some of the costs.”

As a core principle, the Government would look at a charge based on the amount of support provided.

This approach would give future claimants continued security in their homes – knowing that they will receive help from the Government towards their mortgage costs.

Read the DWP Call for Evidence


Amanda Frewin

Research & Project Support

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Recommendations to reduce the costs of sickness absence in the UK

Health and Business experts Dame Carol Black and David Frost have presented a report to the government of the results of an independent review aimed at reducing the cost of sickness to employers, taxpayers and the economy.

The review proposes a number of recommendations which aim to reduce the human and financial cost of sickness absence in the UK.

  • For employers tackling sickness absence a key barrier to getting people back to work is the fit notes. The Review recommends a new Independent Assessment Service (IAS) that employers and GPs can refer long-term sickness absence cases to


  •  The Review recommends that the State introduces a new Job Brokering Service for employees on long-term sickness absence who are unable to return to their current employer. This service could save the State up to £300m a year by reducing the benefits bill.


  • The Reviewers observed that the current benefits system fails claimants with ill-health by directing too many people to Employment and Support Allowance but subsequently declaring most fit for work after a long delay. The Review recommends the removal of the assessment phase for claimants of Employment and Support Allowance.

David Frost former Director General, British Chamber of Commerce said:

“Evidence clearly shows that the longer you are out of work the harder it becomes to get back in. But in many cases sickness absence is due to health conditions that are nonetheless compatible with work – and can often be improved by work.

“The current certification system does not provide employers with the advice they need to make informed decisions about their employees’ capability for work. The establishment of the Independent Assessment Service will provide practical support and help to allow employers to make informed judgements about a return to work for their staff.”

Dame Carol Black, National Director for Health and Work said:

“Sickness absence from work can be unavoidable, but when unduly prolonged it is wasteful and damaging. We believe we have presented an urgent and compelling case to change the current system so that it unashamedly promotes work for those that can.

“If implemented these recommendations will ensure many more people with health conditions are able to enjoy the benefit of work; far fewer will needlessly lose work and fall into long-term benefit dependency.”

Welcoming the independent review today Lord Freud, the Minister for Welfare Reform said:

“The Government is committed to supporting more people with health conditions to work.  The economy loses £15bn in lost economic output each year due to sickness absence and we cannot continue to foot this bill. But even more important is the impact of needless inactivity on people’s lives; the damage to their aspirations and their health and the damage to their families and communities.

“The Government will undertake a comprehensive assessment of the Review’s findings and recommendations with the view to publishing a response during 2012.”

Click here to view the full recommendations


Amanda Frewin

Research & Project Support

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Benefit Apps

An app is being developed in order to enable households applying for the new benefit, Universal Credit, to do so online. The minister for welfare reform Lord Freud has said that 80% of claimants, -more than 6 million households, will claim universal credit online by 2017.

The aim is to have half of all claimants online by 2013-14, instead of less than 20% at present.

The new plans represent a big shift away from paper-based claims towards a form of digital welfare.

“This is the most radical redesign of the welfare system since its creation and we are taking an equally radical approach to the design and build of technology to deliver it,” Freud said.

Freud admitted:

“It is one thing to have policy, but delivery is equally important. The current welfare system is broken.”

Universal credit will change the current system by integrating both in-work tax credits and out-of-work benefits.

Click here for the full article

welfare to work

work programme

welfare reform

 Amanda Frewin

Research & Project Support


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Direct payment of housing benefit to be reviewed

The government will come under pressure to review its plans for direct payment of housing benefit in parliament today.

Crossbench peer Lord Best has tabled an amendment to the Welfare Reform Bill calling for tenants to be given a choice as to whether housing benefit is paid direct to them or to their landlord. The bill is currently being debated in the House of Lords.

Under the proposals as part of the welfare bill, the housing element of the universal credit will generally be paid direct to tenants.

However, campaigners are concerned the new rules will mean tenants fall behind in rent payments, meaning they could risk losing their home. Housing associations are also concerned the change could discourage lenders from investing in the sector.

Last month welfare reform minister Lord Freud announced six demonstration projects to trial direct payment of housing benefit.

Lord Freud said changes would not affect ‘vulnerable people and pensioners’ but that the ‘majority of claimants renting in the social sector will be responsible for making direct payments to their landlords’.

Website: Inside Housing


Amanda Frewin

Research & Project Support




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Has the sector missed the point about outcome payments?

The sector has been preoccupied and obsessing about unit costs of circa £1,500. One can fully understand this because as we know, the unit costs for FND1 & FND2 were very testing and the costings for PEP were totally unrealistic.

The first principle in any business is to understand and to know your costs: if the costs do not add up then you negotiate or walk away…..!!!

Lord Freud stated,

“the costs of helping individuals move into work need to be understood. Once the proposed regime is fully developed, both the State and the provider would then have a fuller knowledge of the expected cost of the support needed for an individual claimant”

Question 1, is “the proposed regime fully developed?”
Answer No it isn’t.

However, regardless of whether it has been fully developed or not the fact remains that the sector has not adequately, consistently and with a united voice clarified and advised on the ‘true’ cost of delivery; the position has been reactionary rather than proactive.

Every now and then however; it is useful to revert to source material and revisit initial thinking.

At the time of writing Reducing dependency, increasing opportunity: options for the future of welfare to work 2007 David Freud outlined that the fiscal gain of moving an average recipient off benefit and into work for a year resulted in a substantial gross saving to the exchequer. The initial cumulative costs would be in the region of;

  • £9,000 for Incapacity benefit claimants,
  • £8,100 Jobseeker’s Allowance,
  • £4,400 lone parents,

Freud acknowledged however that the real costs would in fact be a multiple of these figures.

So for Incapacity Benefit payments once a person has been on IB for a year, they are on average on benefit for eight years. Freud writes that a genuine transformation into long term work for an IB claimant is worth a net value of around £62,000, per person to the State.

Ok Floyd…. What are you saying…?

My first point is this…..

  • Whilst we do not know how long a former IB –ESA, JSA, or LP claimant stays in work, the cumulative figure is as reasonable a starting point from which to begin discussions as is the compound risk of a purely outcomes focused contract with no guaranteed flows.

My second point is this

  • The Document; The Work Programme Framework “…the price paid for job outcomes should not exceed the benefit savings that have been generated”.makes a very important observation…… See IB, JSA  savings for 1 year divide by 12 x by 13 or 26 weeks =£x,xxx : thats more like it!! ( I know its crude but could it work?

My Third point is this

  • The department should proportionately apply the cumulative net savings over a given period this will provide considerable room for DWP to be more malleable around unit costs so for example, in the first 2 quarters of contract DWP could ‘front-end load’ payments… Remember what Lord Freud said at the Alps Conference about getting the pricing RIGHT and UP –see our report).

o    The ‘front-end loading’ would have additional trigger and drawdown points.

  • This approach would provide the scope for the department to be more expansive regarding sustainability,

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Last week (16th June) we saw the first meeting of homelessness ministers from eight Government departments. This was set up by the Prime Minister  to step up action to help the homeless.

Housing Minister Grant Shapps has announced plans to overhaul the system for measuring homelessness and agreed changes will come into effect from 2011

Current rough sleeping count of 464 (2009) includes information from the 76 LAs who conducted a formal street count between January 2008 and May 2009. The majority of LAs (278) DID NOT carry out a count as there was not a known or suspected rough sleeping problem in their area.

Homelessness charities know that in London alone at least 3,000 rough sleepers access services in London each year

Leslie Morphy, Chief Executive of Crisis, said: “Crisis has always said that the system for counting rough sleepers had flaws and did not give a full account of either rough sleeping or wider homelessness so we welcome the announcement that the system will be reformed.

The Ministers in the new Homelessness Working Group are:

  1. Grant Shapps MP (Con) – Department for Communities and Local Government (housing and homelessness) (Chair)
  2. Andrew Robathan MP (Con) – Ministry of Defence (welfare of veterans)
  3. John Hayes MP (Con) – Department for Business, Innovation and Skills (adult skills)
  4. Paul Burstow MP (LD) – Department of Health (health and care services)
  5. Lord David Freud (Con) – Department for Work and Pensions (housing benefit)
  6. Crispin Blunt MP (Con) – Ministry of Justice (criminal justice)
  7. James Brokenshire (Con) – Home Office (crime prevention)
  8. Tim Loughton MP (Con) – Department for Education (children and youth services)

It’s reassuring to see that both John Hayes …. who has famously set colleges free!!!! and Lord Freud architect of – a sizable part of – the on-going welfare reform agenda were sat around the table.

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