Tag Archives: recession

Guest Blog – Will Hutton

Over the next two or three years unemployment is going to climb to three million, and the likelihood is that it will fall only very slowly afterwards. There is a risk it could rise even higher if the Conservative party is as serious about cutting the budget deficit as quickly and as deeply as it says. Worse unemployment disproportionately hits disadvantaged communities most.

This is a calamity. There is a famous study of what happened in the village of Marienthal, not far from Vienna, when the main factory shut its gates in the depression of the early 1930s. The unemployed  do not tend to take up the violin, read more books, or enjoy quality time with their families. Indeed, researchers found that although people had enough to eat, use of the library dropped by a third, clubs closed down and wives complained that formerly energetic men took extraordinary amounts of time to accomplish simple tasks. People stood on street corners, waiting. Time weighed heavy but people talked to each other less.

The reason, argued the psychologist Marie Jahoda whose 1980s research is still pathbreaking , is  that work provides people with a fundamental “sense of reality”, which can not be obtained through any other activity or institution. Employment of any kind has a number of key benefits. It gives structure to the day; it compels contact and shared experience with others; it demonstrates goals and purpose beyond the individual; it gives status; it forces people to be active. Take those away and people quickly became dysfunctional.

Jahoda returned to her theme in the very different period of high unemployment in the UK during the 1980s. The poverty in question was now relative rather than absolute but she argued that purposelessness loomed as large as ever. The phrases used to describe the feelings were the same: on the scrapheap, useless, not needed by anybody. The loss of work followed by prolonged joblessness entailed a sequence of psychological states – fear and distress, resignation, adaptation, and finally, if unsuccessful in the search for work, blank apathy and withdrawal. The psychological need for work goes deep.

Hard Labour, a paper I recently co-wrote with colleagues from The Work Foundation, sets out today’s evidence  on the health affects of unemployment.

  • There is a positive association between mortality and unemployment for all age groups, with suicide increasing within a year of job loss.
  • Cardiovascular mortality accelerates after 2 or 3 years, continuing for the next 10–15 years.
  • There is an estimated 20 per cent excess risk of death for both men actively seeking work and their wives, with the possibility that this may be higher still in areas of higher unemployment.
  • Upon re-employment there appears to be a reversal of these effects. While the direction of causality is difficult to determine unemployment is considered to be a significant cause of psychological distress in itself.
  • Studies indicated a positive association between unemployed people and a higher  prevalence of common mental disorders.
  • Those with a more negative outlook on life tend to be more damaged by unemployment while those who are unemployed but have more positive and goal-oriented outlooks fare better.

In the light of the unemployment calamity about to hit the country we have to be as flexible and imaginative as we possibly can about engaging people with work any which we way we can – and we must recognise the fears of those on Incapacity Benefit especially who believe that if they show the slightest ability to work it will be understood as a complete ability to work . I strongly support the Community Allowance. It could improve the well-being of hundreds of thousands of people – and improve the look and feel of our communities.

Will Hutton

In and Out of Work – Glenn Jenkins from Marsh Farm Estate, Luton

I am a resident of the Marsh Farm estate in Luton who became unemployed in the 1992 recession and, for a number of reasons, has been living on state benefits for most of the time ever since. However, unlike the more than a million other people in the UK who find themselves in the same situation, I have been lucky enough to have escaped the worst of the numbing effects of long term unemployment by taking part in the creation and organisation of community self help projects ‘by and for socially excluded people’.

This gives me long, first hand experience of life ‘at the margins’, which means I really appreciate the positive impact the introduction of the Community Allowance would have, not just for the sizeable minority of people living here who are stuck in different departments of the ‘benefits trap’ and highly unlikely to ever find meaningful work, but also for the public at large.

For many people on Marsh Farm who do manage to find work, the story is not much better. The latest unemployment statistics for Luton show that the current economic downturn has seen joblessness go up on Marsh Farm at a rate 3 times that of Luton generally. This is caused by the large number of people living here who, when they do manage to find work, end up in temporary and insecure jobs which are always the first to go in a ‘recession’.

This syndrome of ‘in and out of work’ nearly always leads to a period of severe financial instability similar to that described above for these individuals and their families. This is a disaster caused in these cases by the disjointed nature of the benefits system and its inability to efficiently manage the transition from work to benefits and benefits to work.

As the UK Insecure at Work survey explains “throughout most of the last decade, almost half of the men, and a third of the women, making a new claim for Jobseeker’s Allowance were last claiming this benefit less than six months previously. In other words, almost half of men who lose their job, and a third of women, had had that job for less than six months. This shows the short-term nature of the jobs that many unemployed people go into”.

As a long term resident of Marsh Farm I promise you, the instability caused by the ‘in and out of work’ syndrome is pushing several young families to the brink of impoverishment and homelessness.

Although it almost goes without saying (I hope) that everyone is an individual with a specific set of needs, the welfare to work systems in the UK are notoriously bureaucratic and unable to provide relevant and useful support for the majority of long term unemployed people living on Marsh Farm. The internet dictionary ‘Dictionary.com’ describes a bureaucrat as “an official who works by fixed routine without exercising intelligent judgment”, a description which perfectly sums up the experience for most of the long term unemployed people I know.

For many people, interventions by Job Centre Plus and other support agencies leads not to a pathway to work, but instead to being forced onto ‘courses’ which are widely felt to be box ticking exercises for government targets rather than genuine attempts to help people back into work.

As a topical and personal example of this ‘one size fits all’ approach, I was recently ordered (at threat of loss of all my benefits) to take part in a ‘basic skills assessment’ (due to my reaching 18 months unemployed).

This is a 1 hr ‘exam’ consisting of a set of numeracy questions like: 2 + 2 + ? = 11 and literacy questions like “I wien to the shop to get some tea” – please identify the spelling mistake.

This ‘exam’ was delivered by a qualified teacher who travelled from Dunstable College (which is 5 miles away – and there were only two of us there!). As I hope my authorship of this article shows, this ‘exam’ is a complete waste of my time, the advisors time, the trainer’s time and is nothing less than a scandalous waste of public money. In any sane system, the advisor would have the flexibility to identify those who need such support, and those who do not, and would be free to tailor any support provided according to the specific needs of each person they are working with. But here again, the only support the advisor can provide is restricted to that delivered by those providers who have ‘won the contract’, regardless of whether the training is relevant to the individuals needs, or the quality of the training itself.

My own experience of this ‘one size fits all’ approach to the provision of ‘support’ is nothing when compared with the real and lasting damage caused to other people’s lives who are treated in the same way, but who are not so well placed to cope with it as I am.

Work for Your Benefit pilots announced

You may well have missed the somewhat depressing news that the DWP are going to pilot Work for Your Benefit sanctions in both Greater Manchester and across the counties of Norfolk, Cambridgeshire and Suffolk.

This will affect the projected 2% of Job Seeker’s Allowance (JSA) claimants who are unable to find work after 2 years of support and interventions through the Job Centre Plus and Flexible New Deal. However, Job Centre Plus advisors can refer people on JSA to do 6 weeks of Work for Your Benefit at any point from the start of their claim.

Work for Your Benefit will make people on JSA work for 30 hours a week (where possible placements will be of benefit to the community) in return for their benefits. They also have to undertake up to 10 hours a week of supported work search activity. The DWP are currently asking for organisations to express an interest in running the pilots.

We have had grave concerns about this initiative since it was first suggested by the Conservative Party and then included in the Government’s Green Paper on Welfare Reform. Here’s why: 

The Recession and Rising Unemployment

  • It’s dangerous to associate community work in the public mind with ‘scroungers’ being punished, particularly during a time of rising unemployment. Community work is a great opportunity – part of the carrot, not one of the sticks. Getting people engaged in their communities is a crucial element in tackling worklessness and poverty, by maximising the opportunities that exist for part time, sessional and irregular work in deprived communities.
  • With rising unemployment and increased competition for all jobs, it is likely to be those that are furthest from the labour market and most excluded for socio-economic reasons that will still be unemployed at the end of 2 years. Intervention in a community setting for this demographic should be supportive and enabling, not punitive.

 The DWP’s own research shows that ‘workfare’ doesn’t work

  • Their research into the effectiveness of workfare programmes in the US, Canada and Australia found that overall the Work for Your Benefit approach is not effective.
  • Work for Your Benefit is least effective for individuals with multiple barriers to entering the labour market
  • Welfare recipients with multiple barriers often find it difficult to meet obligations to take part in unpaid work. This can lead to sanctions and, in the most extreme cases, the complete withdrawal of benefits that leaves some individuals with no work and no income.
  • Some states in the US have scaled down large-scale, universal workfare programmes in preference for ‘softer’ and more flexible models that offer greater support to those with the most barriers to work. This includes a greater reliance on subsidised jobs that pay wages rather than benefits to participants.
  • Subsidised (‘transitional’) job schemes that pay a wage can be more effective in raising employment levels than Work for Your Benefit programmes.
  • Workfare is not only inefficient; it is unfair too, because it exploits the unemployed people forced to take part. If a job is worth doing it is worth being paid the rate for that job. Unemployed people on workfare schemes would be paid less than half the national minimum wage.

Government doesn’t understand the Community Sector Labour Market

  • The labour market in poor communities creates predominantly part time, sessional and irregular jobs that reflects a national shift away from a 35 hour week towards a labour market that is more dynamic. Many of these are ideal ‘entry level’ jobs that could be a first step into work for the long term unemployed.
  • The Work for Your Benefit pilots do not recognise the nature of the community sector labour market. It will be problematic to generate enough full time community work for people to do in their own community to sustain full time activity. 
  • Transporting people out of their community to work in other communities displaces local ownership of work that is undertaken to improve a community. Local ownership is of crucial importance to the effectiveness and sustainability of community work.
  • Additional transport time on top of full time activity will be very problematic for many people, particularly those who are single parents. Experience in the US, recounted by Alison Benjamin in The Guardian, illustrates how dangerous this can be, as the impact on children can be damaging, particularly when there is no rise in income associated with the parent’s absence.

    We believe that the Community Allowance should be piloted as an alternative to Work for Your Benefit for people on JSA as part of an ‘enhanced stage 3 option’. We know hundreds of community organisations across the UK that would jump at the chance to work with Job Centre Plus on this, creating thousands of new paid jobs in the process. 


      Speech at DTA National Policy Symposium

      Hello Everyone. My name is Naomi Alexander and I’m here to talk to you about the CREATE Consortium’s campaign to establish the Community Allowance as part of the UK benefits system.

       Our work focuses on the intersection between the benefits system and community regeneration.

       The story of the Community Allowance started back in 2001 at the first meeting of the National Community Forum, when all 24 community activists from across the country unanimously agreed that the benefits trap was one of the biggest barriers to achieving neighbourhood renewal.

       The benefits trap is an unintended result of the benefits system as it is currently structured. The cost to the nation goes far beyond the impact on individual benefits claimants and their families. Whole communities are caught in this trap and so too are our attempts at neighbourhood and civil renewal.

       We spend £92 billion a year on benefits payments.

       Not in administration, not in employment support, but the actual weekly payments.

       This £92 billion is the national bill for the most elaborate and complex poverty trap imaginable. It provides few stepping stones to avoid or escape the trap.

       At the heart of the trap is the ‘earnings disregard’, which is the amount you are allowed to keep on top of benefits if you do part time work – literally, the earnings disregarded by the benefits system.

       Shockingly, for people on Job Seekers Allowance, the ‘earnings disregard’ still remains at the same level it was in 1988: £5 a week – less than an hours work on today’s minimum wage. 

       I’m sure I’m not the only one in this room to see a cruel injustice in a country that has allowed MPs to freely dip into the public purse to fund lavish lifestyles, spending £600 on pot plants. While someone receiving Job Seekers Allowance of £60.48 a week will have penny for penny taken back by the state for anything they earn over £5

       Not only that, but people who declare paid work that is less than 16 hours a week can have their payments thrown into chaos for months, often leaving them with nothing to live on and facing threats of eviction.

       Where is the incentive to get try and back into work? And what does this system say about the way we view benefits claimants?

       I’d like to show you a short film we made last year about how these issues are played out on one estate in Milton Keynes. 

       Through the Community Allowance campaign we have been asking whether there is a way of seeing the benefits spend differently. Is it possible to see benefits as an investment in some of our most deprived communities, rather than as a drain on tax-payer’s money? Could we see it as a hand up and not a hand out?

       The Community Allowance is a proposal to enable community organisations to pay local unemployed people to do part time or sessional work that strengthens their local community and for those people to be able to keep their benefits and keep what they earn on top of their benefits, up to a maximum of £86 a week, which is the equivalent of 15 hours a week on the minimum wage.

       If implemented, the Community Allowance would provide small, manageable and supported stepping-stones for people to begin the journey off benefits and into work.

       At the heart of the Community Allowance is part time and sessional work of the kind Lisa wanted to get going on her estate. As we all know, such work plays a major role in the community sector, with so many potential jobs that can help deliver positive change. Many of these jobs come in at under 16 hours a week, which if you’re on benefits, is the magical but somewhat random ‘safe’ number of hours you can work and have your benefits protected as tax credits kick in at this point.

       What could be achieved if on every estate there were jobs for 2 hours running a lunch club for older people, 4 hours doing detached youth work, 3 hours doing community health work or 2 hours running arts or sports classes. We’ve all seen how this work can really change people’s lives!

       However, policy makers attach a low value to this kind of community activity. It certainly seems that the DWP don’t always view it as ‘real work’ as it doesn’t fit their model of a 16 – 40 hour working week. Yet this kind of work can have a transformative affect both on the confidence and skills of the individual doing it and the community benefiting from the activity.

       Since we started the campaign we have achieved a great deal through the work of all our supporters.

       Over 3000 people have visited the Community Allowance website and we have attracted over 100 organisations to back our call for a Community Allowance pilot, most of who have written directly to James Purnell and Hazel Blears calling for a pilot programme. 

       Last summer, our intensive lobbying was rewarded with a commitment to pilot the Community Allowance in the Community Empowerment White Paper produced by DCLG – they have been fantastic advocates for the Community Allowance across Government.

       In the autumn, the Department for Work and Pensions included a commitment to pilot the Community Allowance in the Welfare Reform White Paper for people on Employment and Support Allowance. This is a significant step forward in being able to realize our goal, but we still have a long way to go.

       We are trying to achieve our ultimate goal of the Community Allowance for anyone on any benefit. Earlier this year we submitted a proposal to DWP’s innovative Right to Bid scheme, for £2.2 million to run a pilot programme with 15 community anchor organisations across the UK.

       We’ve got through to the last stage of assessment and civil servants from across DWP are meeting next week to make a decision. We know that the Directors across DWP have been discussing the Community Allowance.

       While its good to know we’re having an impact on DWP thinking, it’s important to keep in mind the wider context of the recession and the impact this is having on the lives of millions of people across the UK.

       Yesterday I spoke to a manager of a Citizens Advice Bureau in Cornwall. He told me that since last year he has seen a 103% increase in enquiries related to mortgage repayments and repossessions and a 336% increase in enquiries concerning redundancy. Earlier this year Save the Children took the unprecedented step of giving cash handouts to families in the UK, something it usually reserves for disaster affected communities in developing countries. These are sure signs of a society under stress. The Community Allowance is needed now more than ever.

       Despite this, both Labour and the Tories are still talking about bringing in ‘work for your benefits’ schemes.  Mandatory, full-time, unpaid community work for those who have been on JSA for more than two years. In the interests of state choice and procurement rules, this could be delivered by public, private or voluntary sector, ‘depending on who does it best’. I’m sure this audience would agree that using community work as a punishment for being out of work during a recession is a disastrous mistake. We need to make absolutely clear that we as a sector will not endorse it.

       Community work can be a carrot not a stick. 15% of the population, or 8 million people, live in ‘deprived areas’, and changing those areas is not just about squeezing people into a job at Tesco. The costs of ongoing deprivation to society and the state go way beyond the welfare cheque – eating into our taxes across health, drugs, crime, prisons, housing, social work, policing, and the enormous burden to the future caused by poor educational outcomes.

       The community sector has been saying for a long time that we need to show government just how much is saved by sustained, deep-rooted community work.

       How much better would it be, how much more would we save, if the people doing the community work were those most at risk of the benefits trap?

       This week we are pleased to announce that one of the UK’s leading think tanks, the the New Economics Foundation, will be conducting a Social Return on Investment study on the Community Allowance, thanks to the support of our funder, The Hadley Trust.

       We’re going to incorporate the NEF findings with think pieces from leading lights on the left and right of the policy spectrum, including Julia Unwin who spoke earlier and Phillip Blond, senior advisor to the Conservatives. We will be taking this evidence to the three main political party conferences in the Autumn, challenging politicians to see how the Community Allowance can ‘lift’ a whole community, increase confidence and pride, bring out the best in people and stimulate local economic activity.

       To sum up:

       We believe we need to change our approach to worklessness in order to achieve neighbourhood renewal, community empowerment and social justice

       We need to integrate welfare with regeneration, creating jobs for people who live in the area being regenerated.

       We need to fight the old ideologies, not by saying ‘it’s not fair!’ but by creating a positive vision of how different things could be

       We need to challenge Britain, the 4th richest country in the world to live up to its ideals and to use the Community Allowance to see the potential of benefits spend as an investment in our most deprived communities.

       If you agree, we would love to involve you more in the work of the CREATE Consortium, especially during our work this conference season. Please get in touch and together lets work to make the Community Allowance a reality.

       Thank you for listening.