Tag Archives: Iain Duncan Smith

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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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.

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

From Party Conferences, to the House of Lords and on to the BBC

The last few weeks have been incredibly hectic and I have really struggled to find time to share all the exciting things that have been happening, as we work to make the Community Allowance a reality. I last posted just before the Conservative Party Conference – so that seems like a good place to start…..

Conservative Party Conference – Fringe event

Oxfam recently adopted the Community Allowance as one of their key campaigns to tackle poverty in the UK. They offered to support us to run fringe meetings at the Party Conferences providing us with an opportunity to talk to MP’s about the Community Allowance difference. I attended the Conservative Party Conference, along with one of our partners Learning Link’s CEO Zoe Gray. Our fringe was a real success with a lively and interesting audience, really getting to the heart of issues and enabled us to show how successful community organisations are at supporting people back into work.

House of Lords evening reception

The new Work Programme is due to be launched next summer and will replace all existing training and support programmes for unemployed people. In order to ensure that the Community Allowance is included in the Work Programme we need to develop strong partnerships with a number of large multi-million pound Welfare to Work providers. To help us meet as many providers as possible Baroness Stedman- Scott, offered to host an evening reception at the House of Lords, so we could explain what the Community Allowance could offer.

The reception was a real success with CEO’s and Directors from 12 of the largest Welfare to Work companies meeting with community organisations who want to deliver the Community Allowance. St Peter’s Partnership were able to explain the real difference it would make to their work and their community. We also heard from one young person who’s mum had been supported by St Peter’s Partnership to find work and the challenges her mum had overcome. It was a real great night and I am now starting work on turning the promises made on the night into firm commitments that will finally enable organisations like St Peters Partnership to develop Community Allowance for their communities.

BBC News

Yesterday I was invited by the BBC to talk about the government’s announcement to introduce compulsory unpaid manual work for unemployed people (BBC Interview here). I stressed that if our shared goal is to support people back into work that we need to offer good quality training, support and real work experience – that reflects the local job market – so people have the opportunity to gain the skills and experience to get a job.

I contrasted a 4 week compulsory programme where unemployed people worked for 30 hours “litter picking” or “gardening” – with our approach – a comprehensive training and support programme that creates a part-time job which reflects local jobs e.g. landscaping. We would offer a part-time paid job, where people can gain experience of really working in the landscaping industry, the type of work and machinery involved, the qualifications required and an up to date reference.

I didn’t have time to raise the other Community Allowance difference – the impact on communities. Creating local jobs within community organisations gives a real boost to the ability of those organisations to safeguard vital services and to develop new ones to meet local need. In a time of ongoing cuts and threats to services – we need practical and affordable solutions, which can deliver for unemployed people and local communities.

So an interesting four weeks which lots of talking and finding common ground – now I am looking forward to being able to tell you about who we will be working with to deliver the Community Allowance.

With best wishes

Louise

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

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/