There are two very different public policy issues that currently cry out for resolution, and the Community Allowance provides the start of an answer to both.
The first is the appalling and risky under-funding of community based organisations. All community based organisations rely on the unpaid work of members and volunteers, sacrificing large amounts of time to try and make their communities better places. But without some funding for organisation and co-ordination, the strain can simply be too much. What is more, organisations without any paid leadership can find it difficult to find the time, or the energy, to do those essential things that enable community groups to grow and develop. Funding has always been tight for community organisations: there is nothing new there, but as we face major spending cuts, the fragile hold that some community groups currently have on local authority funding may be even further eroded. Voluntary effort may be the engine of community organisations, but frequently the lack of any paid staff means that the engine stalls.
And the second problem crying out for resolution and response is the way in which people living in poverty are helped to move into paid work. Research by JRF and others has shown that the complexity of the benefits system does put off many people from trying paid work because of the instability this can introduce into their household budgets – stability being more important for some than the extra income from employment. The Institute for Fiscal Studies and Gingerbread did a study for JRF modelling different ways of approaching ‘mini-jobs’ (of less than 16hrs per week) in the welfare system and concluded that a bigger disregard of earned income would have beneficial impacts on employment for lone parents. Other research funded by JRF, carried out by the Centre for Research in Social Policy, into the standard that most people think is needed highlights how far below adequacy some people on benefits can fall, especially if they do not have children living with them.
The Community Allowance provides the start of a solution to both these problems. It allows community organisations to offer employment to some people, and so provide the fixed commitment that they need so urgently, and it allows the individuals the opportunity to try out new work, and get remunerated for doing so.
And it is now more urgently needed than ever. The Welfare to Work reforms for Flexible New Deal will inevitably focus on those closest to the labour market, at least initially. The Community Allowance is aimed at helping people get into work who would probably not benefit from immediate help from the Welfare to Work providers, even the third sector ones. This much more grassroots-led approach can complement, but not replace, the other approaches.
In my view it will do this in two distinct and innovative ways.
First, many people who do go into work from benefits at present risk swapping one form of poverty for another. The Community Allowance will alleviate this to some extent by providing a safety net of benefits whilst people who have been out of the labour market for some time can get used to doing paid work.
Second, local community and other organisations who could employ people doing useful mini-jobs at present have difficulty recruiting people because of the disincentives in the benefits system.
The Community Allowance helps the individuals doing the work, the organisations who are getting the work done, as well as the community organisations which need the work done. The costs are small and the benefits significant, both to the individuals and to the organisations with which they work.
Chief Executive, Joseph Rowntree Foundation