When Iain Duncan Smith launched his vision of the welfare state, at the heart, was a fundamental commitment to tackle the benefit trap. He grasp the nettle and explained in clear terms how our confusing and complicated benefit system traps people – making people financial worse off if they returned to work. One of his key objectives was to get rid of the “16 hour rule” (if you work for under 16 hours a week while on benefits then for many claimants you can only keep £5 of your earnings and then every other £1 you earn is deducted from your benefit). Most people who try to work for under 16 hours a week are worse off – IDS took this on board and launched his plan (Universal Credit) for a new system that would enable people to get back into work as soon as possible even if this was only for a few hours a week – giving people a real chance to start working again without being financial worse off.
It is going to be years before the current benefit trap is destroyed by the Universal Credit reforms but just as IDS and his team start dismantling the current trap, it appears that a new and just as effective, barrier to taking up part-time work opportunities could be built and this has just as many teeth and is just as nasty…..
Next month the new Work Programme will be launched. People who are unemployed will be automatically be referred to the programme and will be offering training and support to find work. If people refuse to comply with the plan that their Work Programme provider has developed they will be subject to a range of sanctions including benefit being suspended. Activities include training courses, work placements and a range of other types of support to help people overcome barriers to employment. As anyone has tried to combine “complying” with the benefit rules and trying to work part-time or volunteering will tell you – the attitude of your employment advisor is key to whether you can make a success of part-time work, while also increasing your skills or accessing other types of support. Sometimes trying to “complying” with your welfare to work advisor means trying to be in two places at once – attending a compulsory course and going to work.
Over the last few months I have been meeting with providers of employment support to talk about the how part-time jobs in communities provides a real stepping stone back into employment – the providers have been incredible supportive and recognise how valuable such jobs could be to the people they work with…However, they have all highlighted a tension within the Work Programme – the definition of getting someone into work i.e. “getting a job” is a job of 16 hours or more a week. The provider only gets paid for all their work if someone gets a job of at least 16 hours…. anything less isn’t counted as a “job-outcome’ for DWP – so the pressure is on the providers and people receiving benefits to make it to over 16 hours employment….
DWP have been very clear that it is up to Work Programme providers to decide the best way to get people into work. So, the real power over whether people can take up job opportunities of less then 16 hours now shifts to the Work Programme providers. Will they be able to ensure we don’t build a new barrier to work or will we see the building of a new trap that means you risk benefit sanctions and a whole lot of hassle if you take a job of less then 16 hours while on the Work Programme ?
David Cameron has always been clear that that Building the Big Society “isn’t just the responsibility of one or two government departments” but the “responsibility of all government departments” . As we have been finishing off our response to the government’s plans for benefits reform (21st Century Welfare). We have focused on a fundemental area that the consultation fails to mention, yet David Cameron has made a top priority for the government – the importance of communities in developing local solutions. The single largest element of government spend in most deprived communities is the billions it spends in benefit and welfare to work costs. So we have asked Iain Duncan Smith how he will ensure that the millions of pounds spent is an investment in local communities and supports David Cameron’s vision of a Big Society?
In order to recognise the importance of local communities in welfare reform we are proposing an eighth principle to guide welfare reform (Q5 of the consultation document)
Individual claimants live in communities. Welfare policy should harness the power of communities to support the individual’s transition into work and welfare spend should be an investment in local communities as well as individuals.
The Community Allowance offers a practical and affordable way to unlock the potential of communities to create new jobs, support individuals back into work and transform communities.
The Community Allowance would create new jobs by enabling community organisations to pay local unemployed people to do part time, sessional or short-term work that strengthens their neighbourhood. The unemployed person would be able to keep these earnings on top of benefits, making work pay and providing a stepping stone to employment.
The Community Allowance
- Is a package of training, work and personal support delivered very locally by trusted community organisations, with strong track records of working with the hardest to reach.
- Gets people back into work, gaining experience and employability in a supportive environment.
- Enables community organisations to develop local solutions and jobs which directly improve and regenerate their communities.
The proposed changes to earning disregards and tapers have the potential to enable the Community Allowance approach to be available to everyone on benefits and to every community. Our approach would create some of the jobs required to enable people to take their first important steps back into work.
There are two ways that the Community Allowance could make a significant contribution quickly and affordably, prior to wholesale reform:
- An immediate option – we are already in discussions with potential Prime Contractors to offer the Community Allowance through the Work Programme for Incapacity and ESA claimants using existing disregards. However, due to the proposed reassessment of Incapacity Benefit claimants we would need to work with DWP to ensure a level of certainty which would allow delivery;
- An “in the meantime” option – if the current financial constraints mean that more generous universals earning disregards are seen as unaffordable, we recommend that a Community Earnings Allowance/Disregard is created as a first step towards comprehensive reform. This would recognise the additional social and economic impact achieved through creating stepping-stone jobs that also contribute directly to stronger communities.
We are aiming to to submit our response to the Consultation in a weeks time and I would really welcome your thoughts on our eighth principle and the challenges facing Iain Duncan Smith.
PS I am on annual leave until Monday 27th September
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Tagged 21s, 21st Century Welfare, benefits trap, big society, community earning allowance, community organisations, creating new jobs, David Cameron, DWP, earnings disregard, eighth principle, Iain Duncan Smith, keep earnings on top of benefits, The Work Programme, welfare reform
From our experience, the assumption that people living on benefits don’t want to work simply isn’t true. We know that trying to survive on a very low income in the UK is a tricky business. Which is why we are working with OXFAM to find people who would be willing to share their experiences and frustrations on what it’s really like trying to survive in the system.
We’d like to hear from women and men who’d be up for taking part in a blog to record your experiences, tips and ideas as the Government makes decisions that affect your lives. We also want people who are happy to talk to the media. We think it’s time that the public and politicians see what it’s really like to survive in Britain today.
If you are struggling with the system, whether in work or on JSA, receiving housing benefit, incapacity benefits, are a single parent finding it hard to get by or have recently lost your job and can commit to volunteering with us as a blogger for the next few months, please send an email to email@example.com
The Emergency Budget reinforces the importance of ensuring that the voices of the people and communities affected by changes to the benefits system and communities solutions to the “tough choices” ahead, are heard.
We welcome the Chancellor’s commitment to make work pay – we have long campaigned on the the impact of the benefit trap. We are also looking forward to further proposals in the autumn to ensure that the benefit system becomes a “tool to support work”, rather then trapping people, while also supporting the most vulnerable.
The emergency budget provides more information on the challenges ahead with large cuts in the Welfare Budget, the speeding up of reassessment of Incapacity Benefit claimants and changes focusing on lone parents. Currently lone parents get income support until their youngest child reaches 10. Once their child is 10 they have to start looking for employment in order to claim jobseekers’ allowance. Lone parents will now be expected to look for work once their youngest child goes to school.The government estimate that up to 15,000 lone parents could move into employment with these changes. Many will have been out of the labour market for a long time and will need support, advice, training and real work experience to successfully enter the world of work. If the context of responsibility and fairness, we need a clear message from the government about how it will ensure that the right level of support will be provided for all these new jobseekers, especially as many organisations including Joseph Rowntree Foundation have raised serious concerns about the impact of the budget on people in poverty.
The coming weeks and months will be critical in ensuring that the development of The Work Programme and the wider welfare reform debate, includes community solutions at the heart of the government’s approach. We know communities can develop their own tools – including stepping stones to employment – if given the opportunity. Now we just need to make sure that when the government talks about responsibility, freedom and fairness that community organisations are able to share their experiences. If you would like to find out more or to add your support please visit our website.
Prime Minister David Cameron’s speech today, warned of “difficult decisions” on pay, pensions and benefits as he set out the case for “painful” cuts ahead. He said dealing with the deficit would be “unavoidably tough” and affect “our whole way of life”. While no new details were given on what will be cut, we were offered some reassurance that he would not cut the deficit “in a way that hurts those we most need to help”.
The Department for Work and Pensions spent £87 billon on benefits last year. For many deprived areas spending on benefits payments and welfare to work programmes is the largest public investment they receive, yet has limited positive impact. It is clear that there are going to be fundamental changes to the benefit system as proposed by the Welfare Reform Bill and more support for local councils and communities to develop solutions to local issues, in the Decentralisation and Localism Bill.
Yet we know that any discussions about making the benefit system “fairer and simpler” or giving communities more power, take place against a backdrop of large scale cuts. If we are to ensure that policy discussions are not simply dominated by calls for cuts in benefit payments and sanctions, we need to make sure that positive approaches that do give power back to communities – such as the Community Allowance – are known about and understood. Developed by local community organisations and people on benefits, the Community Allowance enables people on benefits to be paid to work in their local community – a step up into employment for people on benefit and a step up for local communities.
Last week we wrote to Ministers responsible for the Welfare Reform Bill and the Decentralisation and Localism Bill asking for meetings to discuss the Community Allowance. Both these Bills provide an important opportunity to radically change the benefit system and the role of people on benefits in transforming their local communities. The Community Allowance is supported by over 300 individuals and 100 community organisations. We would like to increase the number of people who know about the benefit trap and solutions such as the Community Allowance and need your help – Is your organisation or group signed up as a supporter of the Community Allowance? – Can you help us increase the number of people who know about the benefit trap and the Community Allowance through your website, blog or newsletter? We know that if we want to make sure any “difficult decisions” the government makes includes fair, community owned and developed solutions, we need your help to be heard. Please sign up at our website or email me at L.Winterburn@dta.org.uk
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Tagged benefits regulations, benefits trap, community organisations, David Cameron, Decentralisation and Localism Bill, deprived areas, DWP, poverty, unemployment, welfare reform, Welfare Reform Bill