Tag Archives: DWP

When is a job, not a job? Understanding the new “16 hour” benefit trap

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 ?

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Link to BBC News 24 Interview

My interview on about the government’s plans for compulsory unpaid manual work is now on You Tube. Please see it here and let us know what you think

Benefits reform – will it fail David Cameron’s Big Society Challenge?

David Cameron has always been clear that that Building the Big Societyisn’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.

Best wishes

Louise

PS I am on annual leave until Monday 27th September

Inspirational project asks PM for the Community Allowance

In my last few blogs I have written about the need to make sure community ideas and solutions are heard when discussing changes to the benefit system and employment training programmes. Well yesterday, thanks to St Peter’s Partnership, David Cameron heard how one community organisation is working with its local community to support people back into work and why the Community Allowance is needed.

On a day that was dominated by talk of “cracking down on benefit cheats”, David Cameron also went to visit St Peter’s Partnership and saw the amazing work they do to support people back into work and the commitment of the unemployed people involved. St Peter’s Partnership was originally set up by a group of local residents and is a vibrant community organisation offering a wide range of community programmes. Mr Cameron met with the Greenscape Team, one of St Peter’s social enterprises delivering landscaping and gardening services plus training and employment for local unemployed people. He also heard why we need the Community Allowance – being able to offer the Community Allowance would enable St Peter’s Partnership to work more flexibly and increase the impact of their programmes for the wider community. David Cameron described the work done by St Peter’s Partnership as “inspirational”. In acknowledging their expertise and hearing directly from unemployed people, lets hope he takes away the need to let community organisations offer the Community Allowance and how committed most unemployed people are to finding work.

With St Peter’s Partnership doing such a great job of explaining to the Prime Minister why we need the Community Allowance, I have responded to two consultations the government has set up to capture ideas:

  • DWP’s are currently asking for “Your Thoughts” on The Work Programme. The current consultation ends this Friday. I responded to their “How to cut costs” question by saying that DWP should not only think about saving money but seek to maximize the impact of the billions they spend on benefits and employment support programme. Multiplying the benefit of The Work Programme for unemployed people, the communities they live in and the taxpayer. I stressed the importance of working with unemployed people and community organisations to develop effective programmes that really meet the need.
  • The Treasury’s Spending Challenge asks for your ideas on how to “get more for less”. Last chance to comment tomorrow! I highlighted the importance of ensuring that opportunities are not lost to maximize the impact of any government spending. In a time of spending cuts we have to make sure that where the government is spending money we ensure that we multiple the impact of it. I suggested that this assumption should be built into their procurement process, with models such as the Community Allowance that will multiple the impact of any spending given priority (For every £1 invested in the Community Allowance, over £10 of social capital is created)

The feedback forms are really easy and quick – so why not let the government know what you think?

Best wishes

Louise

Responsibility, freedom and fairness?

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.

Cameron’s difficult decisions

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

A tale of two cities

On my way from a meeting at the Institute of Fiscal Studies to the Department of Work and Pensions yesterday, I picked up a copy of the Evening Standard on the tube. The headline rang ‘The Dispossessed’: London is a shameful tale of two cities. In the richest capital in Europe almost half our children live below the poverty line.

It was refreshing to see a mainstream media outfit deal with the issue of poverty in London. This is something one of the CREATE Consortium’s members, Community Links, has been blogging about recently.

Reading Joe Murphy’s How politics turned its back on the dispossessed, was particularly interesting given the conversation I had just had with the Institute of Fiscal Studies’ Mike Brewer. We were discussing the difference in attitude that both politicians and the public have towards benefits payments and tax credits. Both are tax payer’s money and yet benefits are seen as a drain on the public purse, something to be minimised at all costs, while tax credits are seen as a positive intervention.

It left me wondering from a campaigning point of view what we could do to change this attitude. It goes to the heart of why there is a need for a Community Allowance. If you are on Job Seekers Allowance and try to work for under 16 hours a week you have penny for penny taken away; the earnings disregard still being only £5 a week – less than an hours work on the minimum wage, unchanged since 1988! Yet if you take a job of 16 hours, tax credits protect your income and you are better off in work.

What kind of message does this send to people who want to get themselves out of poverty by taking some part time work? Why did the Government decide that 16 hours is good but 8 hours is bad? It’s an illogical distinction, only made logical by the pervsersity of the difference between the benefits system and tax credits. It has to change.

Interestingly, I am noticing that there seems to be a growing understanding of the necessity of this change, across the political spectrum. This marked change in attitude has come about in the last two years through a wealth of campaigning about the earnings disregard and influential reports such as the Centre for Social Justices’ Dynamic Benefits.

On Saturday I was on a panel with Tim Loughton MP (of Tower Block of Commons fame)  Shadow Minister for Children, at the Conservative Party Spring Forum. He seemed to get it. So did Terry Rooney MP, Chair of the DWP Select Committee, who I met yesterday after I’d been to the DWP.

The question is, what are politicians going to do about it? In a new era of austerity and public spending cuts, how do we tackle poverty? We think the Community Allowance is part of the answer to that question. For a change in the benefits regulations you get a win-win-win: for the person on benefits, earning a bit of money and gaining real work experience, for the community having socially valuable work done locally and for the tax payer every £1 spent on a Community Allowance would create £10.20 worth of social value.

We’re still waiting to hear from DWP about whether we can pilot the Community Allowance. The pace of the discussions in response to our Right to Bid proposal originally submitted in January 2009 is making us question the depth and sincerity of their commitment to pilot it in the 2008 White Paper. We’ll be blogging soon about what we’re thinking of doing next and how you can get involved.