Tag Archives: Dynamic Benefits

When points mean more cash for getting some people back to work

Guest Blog by Jess Steele – Chair of the CREATE Consortium

 

Why would the social justice sector welcome the commodification of the people it cares about?

People are complicated. Life always has another nasty twist else to throw at the weakest. Disadvantages breed and feed off each other. Real people face multi-complex mixtures of poor housing, poor health, debt, violence, and a series of petty but frightening entanglements with the ‘safety net’ state. Local community organisations can be life-savers precisely because they don’t focus on one issue but on whole people.

Why would I dare to suggest, then, that we might welcome a points-based system that sets a value to the individual on the basis of their various disadvantages? Surely ‘differential payments’ whereby a welfare to work provider would get more money for someone with more points, just entrenches the commodification of benefit claimants. I hate the way the Dept for Work and Pensions talks about ‘the welfare stock’ like so many products to be shifted off a shelf. But as someone who believes passionately in local social justice, I’ve spent years looking for welfare solutions that recognise distance travelled and value the small moves a person can take towards a more independent, more engaged life lived locally. I think the points system could be part of it.

Our proposals for the Community Allowance would allow community organisations to pay local people to do the work that needs doing in neighbourhoods without affecting their benefits and wrapped round with the support that only trusted, rooted local civil society can offer.  Most of the work that needs doing is part-time, sessional or short-term – these are new kinds of job altogether, a phantom economy that should exist but doesn’t. While we wait for Iain Duncan dynamic benefits system, let’s focus on these small-scale win-win-win opportunities.

The move towards large-scale contractors in ‘the welfare industry’ is hurtling towards its logical conclusion.  Private providers will raise private finance for working capital to cash-flow ‘black box’ employment support programmes across huge regions. Government will use the benefit savings to buy outcomes after 12 months – getting someone into a job – and then again at 24 and 36 months for keeping them in work. If everyone is treated the same and there are no rewards for the steps towards employability the temptation to cherry-pick the ‘easy’ ones is irresistible.

Imagine that Lisa is a single mother with 3 children and a history of drug use, John has just left prison, Hanan is up to her eyes in debt and Priya is fighting a custody battle that makes him angry and depressed. All have been assessed and they average 22 points on a scale that goes to 30. They are all getting support from and working on the Community Allowance through the community anchor organisation Downtown Trust. Over the course of a year the trust supports them to make progress in their lives and experience some real but very flexible work. At the end of the year their average points reduce to 9. Now they’re in a space where a private provider could help and within another year three of them are in work. At this stage the provider would get much less money for them, not just at the point of job placement but for each of the next two years (average 9 points x 3 outcomes x 3 years =81). But if the provider had grant-funded or contracted with Downtown Trust from the start they could be said to ‘own’ the points our four friends began with and could be rewarded accordingly (22x3x3 =198). If the claimable benefits savings payment was £300 per point per year the changed lives of these four people would have contributed an additional £23,000 which could refund the provider for cost of the grant/contract to Downtown.

There are lots of assumptions here and it would need to be modelled to make sure it was viable for everyone involved. But at the core of the idea is the simple valuing of support to help people deal with the barriers in their complicated lives, the development of a business model that can legitimately and sustainably reward those who provide that support best, and the creation of a new kind of community-based mini-job that transforms the way local neighbourhood regeneration gets done.

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Dynamic Meetings and Benefit Blogging

On Monday I met with Deven Ghelani (Centre for Social Justice) and Chris Goulden (Joseph Rowntree Foundation), to talk about the Community Allowance and the Dynamic Benefits report. For years the CREATE Consortium has campaigned against the benefit trap and for a community solution to unemployment.  The current benefit system acts a trap – stopping people from working and creating serious financial penalties for anyone on benefits who takes on a job for under 16 hours (you earn a pound….you lose a pound). The Dynamic Benefits report from Ian Duncan Smith’s think tank – sets out a new approach – recognising the need to let people take up work opportunities for under 16 hours without making people worse off. The main objection to these plans has historically come from the Treasury and if you believe the reports in the papers the argument is still ongoing….

However, at Monday’s meeting I decided to be optimistic: IDS is going to win the argument on earning disregards – so that people can take up part-time jobs or flexible job opportunities – without risking being unable to buy food or pay the rent because our benefit system is so broken.

As we talked about the current consultation on Welfare Reform – 21st Century Welfare, I raised the importance of the links between people and the places they live. If we don’t recognise the high concentrations of unemployment and what this does to local communities, we miss out on an important part of the problem and the solution. We need to make sure that the current consultation on benefits and decisions on The Work Programme take into account the importance of understanding the “community dimension” and seeks to involve local people and communities in shaping one of the largest areas of Government spending – benefits and employment support programmes.

So how do we make sure that the people with the most knowledge of the benefit system and employment support – the people with direct experience are involved? We are going to be working with Oxfam to highlight people’s real experiences and we are also looking for people who are interested in becoming a benefit blogger – if you want to know more email me at L.winterburn@dta.org.uk

And for those people who like responding to consultations please remember the Community Allowance in your submission

Best wishes

Louise

IDS is Smiling in his dream job, will he help us create more dream jobs?

The Independent On Sunday claims that Iain Duncan Smith has the broadest smile in Downing Street this week, having started his dream job of Work and Pensions Secretary. We see his appointment as a real boost for the Community Allowance campaign. His work in developing the Centre for Social Justice and its role in highlighting the benefits trap highlight many areas of  real agreement on the problems with the benefit system and what needs to be changed. The Centre for Social Justice’s report on benefits – Dynamic Benefits: Towards Welfare that Works, also give us some idea of  the approach that IDS may take in the coming months and we have found some things to smile about too.

We have argued strongly that the benefit system should provide a step up for people and not act as a trap. Yet many recent discussions of welfare reform have been dominated by plans to increase compulsion and threats to withdraw benefits for non-compliance. We have demonstrated time and time again that it is the benefit system that is at fault not the people claiming benefits (see this short film if you would like to hear more). The Centre for Social Justice have also concluded  “For many, the answer to unsustainable welfare bills is to introduce ever tighter rules for receipt of benefits, and to cut generosity for some claimants. However, this approach has never worked. it is not the particular levels and conditions that are at fault, but the structure of the system itself.”

We have also long campaigned for the role of part-time work to be recognised as a positive and valuable opportunity for people currently claiming benefits. We have asked for changes to be made to the earning disregard to enable people to take on part-time jobs and actually be better off. The Dynamic Benefits Report recognises the importance of part-time work and how the current system prevents people taking up job opportunities “For many carers, a low-hours job is all they can take on; and for others an entry-level job represents a stepping stone to higher-earning employment. yet, virtually all initial efforts to work are penalized“. The report recommends a radical change to the earning disregard to support people to take up part-time work.

The Independant on Sunday article also concluded that raising the earning disregard and allowing people to work part-time was a “no-brainer” but was concerned there would be no demand by employers for people who were on benefits. We know that part of the answer lies within local communities where we can offer  part-time jobs with training and support but also make a real difference to the local community – by ensuring the jobs have a local benefit, making a real difference to local community and to the tax payer  – as every £1 spent on the Community Allowance results in £10 worth of social value being created.  We estimated that at least 80 part-time jobs could be created in every neighbourhood through a Community Allowance – providing stepping stones on the pathway to work for thousands of benefits claimants across the country. Over 100 local community organisations have signed up to support the Community Allowance. Over 70 organisations have expressed an interest in being involved in piloted the Community Allowance in their local communities. The Dynamic Benefit Report also recognised the core role that the voluntary sector and local communities can play.

Last week Oxfam thrown its weight behind the campaign for the Community Allowance. We are now writing to IDS to ask for a meeting, hoping his understand of the benefit trap and what can be achieve by local communities will finally enable the benefit system to provide a step up for people and places. To find our more about the Community Allowance  and add your support to the campaign please visit our website at http://www.communityallowance.org/