Tag Archives: Iain Duncan-Smith

Duncan Smith Wants To Change The Legal Definition Of Child Poverty So He Can Eradicate It In Time For The Election.

Steve Bell cartoon 16.07.2013  poverty_2061048a

Thanks to the Child Poverty Act 2010 – legislation brought in by the last Labour government – the Coalition is legally committed to working towards meeting targets for eradicating child poverty in Britain by 2020. Given their current performance this has now become a tragic joke. Nonetheless, it is a statutory duty and we should do all we can to hold them accountable for it.

The Act sets the ‘poverty line’ at an income that is 60% or less than the average net household income, adjusted for inflation. The Act also defines persistent poverty to be having an income that is 60% or less than the average for three consecutive years after 5th April 2010. The target is for there to be 5% or less of children living in families with such an income by 2020.

According to the latest available figures for 2010/11, when housing costs are included there were 13 million families in Britain living beneath the poverty line. This was before the full impact of welfare reform began to bite. That figure is now likely to have shot up sharply as an inevitable result of benefit cuts , rising rents and food prices.

 images      However, the Child Poverty Act contains clauses that allow the Secretary of State for Work and Pensions the freedom to alter the targets for poverty reduction by redefining the legal meaning of persistent poverty. He can do this provided he does so before 2015 and, more importantly, provided he has the consent of the Children’s Commissioner.

In effect, before the next election, Iain Duncan Smith has the power to redefine the ‘poverty line’ in Britain so long as he can persuade or browbeat the Children’s Commissioner into agreeing with him.

Back in June of last year Mr Duncan Smith provoked a row by suggesting he was going to do just that although he was vague about the detail and made no mention of his statutory duty to secure the consent of the Children’s Commissioner. The Independent reported that:-

“Mr Duncan Smith announced plans to scrap the way poverty has been defined since the 1970s – below 60 per cent of the median income. He argued that it would be better to tackle poverty “at source” and to take account of other factors such as drug addiction, worklessness, welfare dependency, debt and family breakdown.”

ids     Then in November 2012 IDS announced he was launching a consultation exercise to look into how poverty could better be defined other than just by income. This consultation closed on 15th February this year. Based on the Tory’s ideological view of poverty as mainly the result of ‘chaotic’ lifestyle the government proposed that there should be eight dimensions of poverty measurement but it seems the academics and organisations taking part in the consultation almost without exception disagreed with their proposals, saying it would be conceptually impossible to devise a credible measurement tool to accurately measure child poverty based on the categories suggested by IDS .

More significantly for the Secretary of State though is the response of the Children’s Commissioner whose report was based on a consultation with children themselves and stated in no uncertain terms that for them poverty meant having little money and living in bad housing. It would seem that the consent he needs to proceed with his plans is unlikely to be forthcoming.

poverty2804_468x431      So far as I can discover, six months on the government have not yet published the outcome of this consultation. But as the election creeps closer and as the devastating impact of their welfare reforms bites deeper and deeper, its not hard to imagine that the government will be desperate to do all they can to portray their performance in the best possible light. Given how central to their deficit reduction platform welfare cuts have been its vitally important to them to be able to claim that child poverty has reduced and that if any still exists its not their fault.

IDS needs another cunning plan.

_62813107_maggie     The current Children’s Commissioner. who stands in his way,  is Dr Maggie Atkinson who was appointed in 2009 by Ed Balls from her position as director of children’s services at Gateshead council  which she’d held since 2005.

Last November Dr Atkinson came in for some highly unusual criticism regarding another  report she produced about the sexual exploitation of children by predatory gangs of men. According to one news report:-

“An unnamed government source is widely reported to have questioned the report’s methodology and calls some of the language used in it “hysterical”. That highly unusual intervention prompted an exchange today in the House of Commons at Prime Minister’s question time.”

In response to that question David Cameron said a strange thing, considering that the contentious report had already been published in full:-

“We need to give every encouragement to the Children’s  Commissioner to make sure that the final version of the report is produced.”

cam   Is Cameron implying that the government would be putting pressure on Dr Atkinson to alter her report?  Is this why a link to the ‘FULL REPORT’ published online here in November doesn’t work? Is that why the report published on the Commission website is now entitled ‘INTERIM REPORT’ ?

And doesn’t it seem strange that there is also a version of the report published on the same Commission website in JULY 2012 with the odd title of ‘ACCELERATED REPORT FOR THE SECRETARY OF STATE FOR EDUCATION’?

What could the difference be between an ‘accelerated report’ and an ‘interim’ one? Its not possible to examine the version posted as ‘FINAL’ because the link doesn’t work but the version now calling itself ‘INTERIM’ looks awfully like a complete, fully referenced report to me whereas the so-called ‘ACCELERATED’ version has the look of an interim report produced for briefing purposes.

My instincts tell me there’s something fishy about all these versions and I’m inclined to think that Dr Atkinson and her team have been told in no uncertain terms to doctor their research to suit the government’s agenda. In other words pressure has been applied and it looks like she has given in to it.

I’m not concerned here with delving into the details of this particular report and the possible objections that might have been made which led to the apparent correction of the ‘hysterical’ content. That will only be possible when the final (doctored?) version appears and comparisons can be made.

images (4)   My immediate concern is with the implications this odd situation raises in terms of the statutory redefining of child poverty by Iain Duncan Smith.

What was the nature of the pressure put on Dr Atkinson to alter a research report to suit the government’s sensibilities? And if she can be made to bend to such pressure once, will she be equally obedient if put under similar pressure from our Fuhrer-like Secretary of State for Work and Pensions should he decide to persist with his plan to change the legal definition of poverty in order to be able to deny the misery he’s brought to millions of children and possibly even claim it no longer exists?

Or will the Children’s Commission suffer the same fate as the CQC where reputations were very publicly destroyed forcing resignations followed by the politically convenient appointment of Tory-friendly Board members and a Chief Executive who was once a Tory MP?

 

 

 

 

 

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Do Job Centre Staff Now Need Training In Resuscitation And Should All Job Centres Have Defibrillators?

250px-CPR  There have recently been a number of reports in local newspapers up and down the country of sick or disabled people being taken ill while attending Job Centres. Given the fact that the Work Capability Assessment is seriously flawed and some very seriously  and even terminally ill people are being passed as ‘fit for work’ and being forced to attend Job Centres under threat of losing benefits, this is a budding trend that could potentially become an every day occurrence.

BlackTriangleAtos-1024x724  Job Centre staff have already been given training in dealing with suicidal claimants, a tacit admission by the DWP that its policies are having a devastating effect on many people’s mental health. Is it now time for staff in Job Centres to be trained in basic life support and resuscitation techniques and for all Job Centres to be equipped with defibrillators, to deal with the growing likelihood that very sick claimants could need urgent medical attention whilst under their roof?

defribillator-a_2938aad807 If you think this sounds ludicrous consider the following news reports. For instance back in March of this year an ambulance was called to a Job Centre in Grays, Hertfordshire    when a man collapsed. By the time the paramedics arrived, despite attempts to resuscitate him, the man had died. Had the staff been properly trained in basic CPR its possible his life could have been saved.

In July this year an ambulance was called to a Scunthorpe Job Centre when a man complained of chest pains. He was later diagnosed as having had a panic attack which when severe enough can give rise to chest pain, pallor and a feeling of shortness of breath – symptoms very like those of a heart attack and just as unpleasant. Had staff been trained in First Aid techniques,whilst they may not have been able to accurately diagnose his problem they would at least have felt more confident in supporting him and calming him down until the paramedics arrived.

JAMES LAVER (HC) 34K1004 The following story which is reproduced in full below was published in yesterday’s Watford Observer and highlights the absolute madness of Iain Duncan Smith’s assault on the chronically sick. I leave you to draw your own conclusions.

Disabled man suffers ‘mini stroke’ during Watford Job Centre interview

1:40pm Thursday 22nd August 2013 in NewsBy Lui Straccia

James has to endure unexplained episodes – thought by some doctors to be transient ischaemic attacks (TIAs), or ‘mini strokes’ – which leave him temporarily paralysed.

brain damaged disabled man who regularly suffers seizures thought to be possibly ‘mini strokes’ was struck down by one – midway through a Watford Job Centre interview, geared towards getting him back into work.

James Laver, 46, has to endure unexplained episodes – thought by some doctors to be transient ischaemic attacks (TIAs), or ‘mini strokes’ – which leave him temporarily paralysed.

Despite the fact his GP said he is ‘completely unable to work at present’, Mr Laver was still called into the Job Centre, in Exchange Road, on Tuesday afternoon for an appointment as he had been placed into the Work Related Activity Group (WRAG), which is aimed at ‘preparing him for work in the future’.

Since having a full stroke in 2008, in which he suffered minor brain damage and nerve damage to his left side, Mr Laver has suffered seizures which paralyse him for an hour and cause him to feel dizzy and to slur his speech.

The exact nature and cause of the seizures have divided opinion among doctors, with some believing they are TIAs, which are caused by a temporary disruption in the blood supply to part of the brain resulting in a lack of oxygen to it.

This can cause symptoms similar to those of a stroke, such as speech and visual disturbance and numbness or weakness in the arms and legs.

However, a TIA does not last as long as a stroke. The effects only last for a few minutes and are usually fully resolved within 24 hours.

Nevertheless, Mr Laver has still been classed as someone who can prepare to go back to work and attended a Job Centre interview on Tuesday.

Mr Laver, who claims disability living allowance, said: “I was put on the floor and was swallowing my tongue, and began to choke. I managed to get myself into the recovery position, but staff then put me back on my back. I quite possibly could have died.

“The attacks are getting worse and are becoming more frequent. Whenever I’m in A&E I’m told it’s a TIA, or possibly a TIA, or not a TIA or stroke, or possibly epilepsy. I think it’s a TIA.

“When I visited my partner in Australia two years ago I was having fits and the Royal Melbourne Hospital said they were TIAs.

“I’ve had five attacks this week in the space of a few days. Nobody this week has told me what they were.

“The woman in the Job Centre was mainly going on about why was I there when I was obviously not fit to work.

“She was just reading stuff on the screen, saying they couldn’t overturn the decision made that I should be in a WRAG.”

An Atos Healthcare spokeswoman said: “We were able to advise Department for Work and Pensions (DWP) that Mr Laver was not fit for work without the need for a face-to-face assessment.

“DWP makes all benefit decisions and has found that he should continue to receive sickness benefit.”

Regarding Mr Laver’s seizure at the Job Centre this week, ambulance service spokesman Gary Sanderson said: “We were called at 2.19pm and we conveyed a male to Watford General Hospital for further assessments.”

When asked what the nature of the illness, Mr Sanderson added: “We cannot comment on that as it is unknown.”

Cameron Has Created More Income Inequality in Three Years Than Thatcher Did in Eleven Years.

inequality-cleese-and-bar-002  The following article written By Howard Reed last month for The Fabian Society is a shocking indictment of a Cameron-led government and their relentless programme of austerity for the poor. Using the now discredited and tired excuse that the previous Labour government ‘got us into this mess’, they have managed to create a low wage economy increasingly characterised by zero hours contracts and have callously denigrated the disabled and the poor, forcing many people who were just getting by before onto the breadline. Ministers, such as Iain Duncan Smith, have shown no compassion whatsoever for the thousands of people who now suffer a precarious existence and sometimes die under their regime of work capability assessments and forced workfare. And it seems there are even more cuts to welfare to come.

wealth  In statistical jargon welfare recipients are classed as being in the 1st decile whilst millionaires like Cameron, Clegg and Osborne are in the 10th decile. The huge gap in terms of wealth between these two extremes can be seen on the graph above. According to Howard Reed’s research the gap really began to open up after Thatcher came to power in 1979 and it widened dramatically during her eleven years in power. It levelled off for a while during New Labour’s reign but began to take off again in 2010 when the coalition took over. Reed shows that on Cameron’s watch inequality became turbo-powered.

david_cameron_pm_1910795 David Cameron, in my view, is no intellectual. In fact he’s a bit of an air head who never gets drawn into honest debate but simply parrots Tory sound bites. I’m sure Ed Milliband could wipe the floor with him if he wanted to. Sadly, though, the Labour opposition are giving the impression they agree, on the whole, with Cameron’s policies on welfare cuts. They’ve not shown much enthusiasm for standing up for the people who are really suffering the brunt of Cameron’s attack. Neither has Ed Milliband made any real attempt to defuse the constantly repeated myth that they were responsible for a wrecked economy despite there being plenty of hard evidence this was not the case. For three years Milliband has allowed Cameron to belittle Labour on this issue at every opportunity without defending himself. As a result of his failure and the perpetual repetition of the myth by every LibDem and Tory MP at every opportunity its now firmly fixed in the mind of the public as unquestionable truth and has done untold damage to Labour’s credibility as a safe guardian of the economy.  Why on earth has Milliband stood by and let this happen?  Its high time the Labour Party took back a little self respect and spoke out for the people its supposed to support – the working class – who are being bullied into poverty and despair by the Coalition.

Fabian_Society_Logo_CMYKHere’s Howard Reed’s article in full:-

 The Inequality Boom

Howard Reed

22 July 2013

Howard Reed finds that the impact of the coalition’s tax and benefit measures could end being as bad for inequality as the Thatcher government’s record. Turning the tide needs to be at the heart of Labour’s strategy for government

Concern about the extreme inequalities of incomes produced by capitalist societies has traditionally been a central component of left-of-centre politics, and the progressive taxation systems and redistributive welfare state put in place by the 1945 Attlee government was at least partly motivated by a desire to reduce inequalities. But how unequal is Britain now, 35 years after the Thatcher government and the end of the post-war consensus? What are the consequences of the current policies of the coalition government for inequality? And how much might impact on inequality might a Labour government expect to make if elected in 2015?

Inequality from 1961 to 2012

Inequality in the distribution of incomes is the result of a combination of two factors. One is the distribution of gross market incomes, ie income before taxes or transfer payments. The largest component of gross incomes is earnings, but the distribution of incomes from investments and (private) pensions, and property income, are also important. The other main factor determining the distribution of net income is the extent of redistribution by the government through the form of taxes and transfer payments (eg benefits, tax credits). Inequality can rise thanks to increasing dispersion of gross incomes, a reduction in the extent of redistribution, or both. Thanks to household surveys conducted on an annual basis from 1961 to the present day, we now have around half a century of data on the UK income distribution on a reasonably consistent basis. Figure 1 is based on analysis of this data by the Institute for Fiscal Studies (IFS) and shows the evolution of inequality in disposable income since 1961. The measure of disposable income used is net household income before housing costs, adjusted for family size. The figures go up to the 2011-12 tax year which are the most recent figures currently available[1].

The measure of inequality used is the Gini coefficient, which is a number between 0 and 1 showing the extent of inequality in a distribution of incomes. A Gini of 0 would correspond to a situation where every household had the same net income, whereas a Gini of 1 would correspond to a situation where one household had all the income and the rest had nothing. Hence, the higher the Gini is, the greater is inequality in incomes. The figures are for Great Britain (including England, Scotland and Wales but excluding Northern Ireland) because the Family Expenditure Survey, which was the survey used to measure incomes until 1992, did not cover Northern Ireland but data for the whole UK from 1993 onwards using the Family Resources Survey (which does cover Northern Ireland) show a very similar picture.

Figure 1. Inequality of household incomes Before Housing Costs, 1961 to 2011/12

inequalityboom1-e1374506159246

Source: Institute for Fiscal Studieshttp://www.ifs.org.uk/bns/bn19figs.xlsx

Broadly speaking, the evolution of inequality in Britain over the past 60 years comprises three distinct phases:

  • Between 1961 and the late 1970s, inequality was roughly stable, with a Gini coefficient in the range 0.24 to 0.27.
  • Inequality rose consistently from 1979 onwards, with the Gini moving above 0.27 in 1985. By 1990, the Gini had reached 0.34 – a rise of 0.07 in just five years. The 1980s were a period of persistent rises in inequality.
  • From 1990 onwards, inequality stabilised at a Gini of around 0.33 to 0.36 and has remained at that level until the present day.

In terms of the relationship between inequality and UK politics, it looks like the period of Margaret Thatcher’s premiership (1979-90) was very different from Labour or Conservative governments before or after it. Mrs Thatcher’s tenure in Downing Street coincided with a massive increase in inequality of household incomes in the UK. What caused this rise in inequality? Research by Stuart Adam and James Browne of the IFS[2] shows that between 1978 and 2008, reforms to the tax and benefit system increased the Gini by around 0.034 compared with a situation in which the 1978-9 tax system had been kept in place and uprated according to the uprating rules in place at that time. This increase in inequality appears to result mainly from two reforms undertaken by the Thatcher government: firstly, the reduction in income tax rates, with the top rate of income tax falling from 83 per cent in 1979 to 40 per cent in 1988; and secondly the decision to uprate means-tested benefits in line with price inflation rather than earnings, which (given that this was a period where average earnings were growing by about 2 per cent above inflation every year) meant that incomes for poorer families who were dependent on benefits for a large proportion, or all, of their net income lagged behind working families.

Thus, changes to taxes and benefits under the Thatcher government account for around half the overall increase in inequality seen between 1978 and 2008. The rest of the increase in inequality can largely be explained by two factors: firstly, increasing dispersion of earnings, with growth in earnings for top earners far outpacing average or low earners; and secondly a shift in the distribution of national income from wages to profits (income from profits is far more unequally distributed than income from wages).[3]

The record of the Labour governments between 1997 and 2010 on inequality is also worth commenting on here. New Labour was much more concerned with reducing poverty, and child and pensioner poverty in particular, than with reducing inequality per se. However, there is an obvious link between poverty and inequality in that redistribution via the tax and benefit system from richer households to poorer households – aiming to reduce poverty by increasing the net incomes of the poorest families – will tend to reduce overall inequality in net incomes as a by-product. Overall, the IFS research by Adam and Browne shows that New Labour made the tax-benefit system more redistributive (as a result of increased benefit payments for poorer pensioners and tax credits for low-income families with children). However, inequality in gross incomes continued to increase over this period. Overall, the two effects more or less cancelled each other out, meaning that inequality in 2010 was almost unchanged from its 1997 level.

The impact of coalition government policies on inequality

Figure 2 presents a breakdown of the distributional effects of most of the reforms made to the tax, benefit and tax credit system over the course of the current parliament using a tax-benefit micro-simulation model constructed by Landman Economics for the Institute for Public Policy Research. The analysis divides families in the UK income distribution into ten equally sized deciles ranging from decile 1 (the poorest) to decile 10 (the richest). The line in the graph shows the overall impact of reforms to the tax, benefit and tax credit systems as a percentage of disposable income, averaged across all families in each decile. Overall, the reforms introduced by the coalition are regressive across most of the distribution – the poorest families lose over 12 percent of their net income on average, compared with only around 3 percent of net income for families in the ninth decile. At the very top, the reforms are slightly progressive, with the top decile losing a slightly higher percentage of their income than the ninth decile; this is mainly due to increases in national insurance contributions and below-inflation increases in the higher rate income tax threshold.

The main factor driving the regressiveness of tax and benefit reforms between 2010 and 2015 is cuts to benefits and tax credits, particularly for working age families with children. The generosity of working tax credit, in particular, was cut back severely over this period. Furthermore, the uprating regime for working age benefits and tax credits has been changed from the retail price index (RPI) to the consumer prices index (CPI), and as annual CPI increases are typically smaller than RPI, this means that households reliant on benefits and tax credits lose out increasingly as time goes on. The decision in the 2012 Autumn Statement to limit working age benefit and tax credit increases to 1 per cent in nominal terms – well below CPI inflation – exacerbates the regressiveness of the reforms to social security. Meanwhile, coalition reforms to income tax and national insurance contributions during this time – principally the above-inflation increases in the income tax personal allowance and the lower thresholds for national insurance contributions – help families in the middle of the income distribution more than the poorest families, most of whom were not earning enough to pay income tax or national insurance in the first place.

Figure 2. Impact of Coalition Tax and Social Security Reforms introduced in 2010-15 Parliament, by income decile

The-Inequality-Boom-3-e1374506123849

Source: author’s own calculations using IPPR/Landman Economics tax-benefit model and Family Resources Survey data for 2010-11

The impact of the total package of tax and benefit reforms between 2010 and 2015 is to increase the Gini by 0.018 points – more than half as much again as the total increase in the Gini which arose from tax and benefit reforms over the period 1978 to 2008. There are additional reforms that it is not possible to model due to insufficient data on benefit claimants in the UK Family Resources Survey (such as many of the changes to housing benefit, and the replacement of disability living allowance by the personal independence payment). However, if they were added in to Figure 2, it is quite possible that the impact of the coalition’s tax and benefit measures would be as bad for inequality as the Thatcher government’s record, despite the fact that by 2015, David Cameron will have been prime minister for less than half the duration that Margaret Thatcher was. Looked at in this way, the coalition government’s tax and benefit reforms are like a speeded-up action replay of Thatcherism. This may come as a particular shock to Liberal Democrats in the government, many of whom spent the 1980s railing against the kind of increase in inequality which I forecast to occur as a direct result of policies introduced in this parliament.

The actual increase in inequality, as measured by the Gini coefficient, over the period 2010 to 2015 is likely to be more than 0.018 because of the continuation of the trends which contributed to increased inequality in gross earnings between 1980 and 2010. While earnings at the top of the distribution are continuing to increase, real wages for low-to-middle earners have been falling behind inflation for at least the last five years. And the most recent available data shows the share of wages in national income continuing to fall, to 53.7 per cent of GDP in 2011 (down from 59.2 per cent in 1980).

Reducing inequality in the future

How should a future Labour government respond to these trends? Discussion of the role tax and benefit measures to reduce inequality – or even to reduce poverty – after 2015 (should Labour emerge victorious at the next election) has not figured highly in policy discussions over the last three years. To a large extent, Labour seems to have bought into the argument of the right-wing media – trumpeted loudly by coalition politicians – that redistribution through the welfare state became increasingly unaffordable under New Labour. This is despite the fact that in 2007-08 – the last year before the Great Recession – total spending on benefits and tax credits as a share of gross domestic product was 11.4 per cent, compared with 11.9 per cent in 1996-97, just before Labour came to office[4].

But with the Labour leadership seemingly insistent that the poor state of the public finances rules out further action to reduce inequality through the tax and benefit system, attention has shifted to what the political scientist Jacob Hacker has called ‘predistribution’ – measures to make the distribution of gross market incomes more equal, thus reducing the pressure on the tax and social security systems to do the ‘heavy lifting’ of reducing inequality. This would be a big change in policy away from the New Labour years, where the market was more or less left to ‘let rip’ in delivering increasing inequalities in gross earnings and investment incomes, with the tax and social security systems having to do more and more redistribution to hold after-tax inequality constant.

There are several policy options for more equal predistribution of earnings, mostly focusing around changes in wage determination, bargaining structures and trade union representation, particularly in private sector industries and services, as well as upgrading skills and improving employment and job progression opportunities for the lowest paid.[5]

But while measures to equalise the distribution of gross earnings would be most welcome, they would work best in conjunction with a more redistributive tax and benefit system, rather than one being a substitute for the other. Many features of the current tax and benefit system are needlessly regressive; for example, council tax, which on average charges low-to-middle income households a much higher percentage of their disposable income than the richest households. There is plenty of scope for major reforms of the UK’s tax and social security systems to increase their progressiveness and reduce net income inequality, at the same time as simplifying the system and raising more money to help balance the public finances.[6]

At the same time, a lot of the inequality in incomes from investments is a function of vast inequalities of wealth and assets and therefore it would be necessary to redistribute wealth – perhaps via radical measures such as land value taxation – to equalise the distribution of investment income significantly.[7]

Whichever set of policies Labour chooses in 2015, it will be important for inequality reduction to be at the heart of the party’s strategy for government. As Richard Wilkinson and Kate Pickett show in their book The Spirit Level, there are clear links between lower inequality and a range of better social outcomes (eg lower crime, increased levels of trust in society, and greater social mobility). For Labour to enter government with a mindset that inequality doesn’t matter would be a serious mistake. Instead, it is to be hoped that despite the difficult economic circumstances which the next Labour government is likely to inherit, they can nonetheless place a clear focus on getting UK income inequality down to the levels which prevailed before the Thatcher revolution of the 1980s.


[1] Prior to 1993 the annual surveys used to obtain data on the income distribution were conducted in calendar years; from 1993-94 onwards they changed to fiscal years.

[2] Stuart Adam and James Browne, Redistribution, Work Incentives and Thirty Years of Tax and Benefit Reform, IFS Working Paper 10/24. http://socialwelfare.bl.uk/subject-areas/services-activity/poverty-benefits/instituteforfiscalstudies/132531wp1024[2].pdf

[3] Both these trends, and the reasons behind them, are examined in more detail in Jacob Mohun Himmelweit and Howard Reed, Where Have All The Wages Gone? Lost Pay and Profits Outside Financial Services, TUC, 2012. http://www.tuc.org.uk/tucfiles/466.pdf

[4] Source: IFS analysis of benefit and tax credit spending as a proportion of GDP. http://www.ifs.org.uk/ff/ben_spend.xls

[5] For more discussion of how to reduce gross earnings inequality see Stewart Lansley and Howard Reed, How To Boost The Wage Share, TUC, 2013.

[6] The bare bones of such a reform package are Richard Murphy and Howard Reed, Financing the Welfare State: Towards a Full Employment Economy, Centre for Labour and Social Studies, 2013. http://socialwelfare.bl.uk/subject-areas/services-activity/employment/centreforlabourandsocialstudies/1464492013_Policy_Paper_-_Richard_Murphy__Howard_Reed_(Social_State_-_Idleness.pdf

[7] Several options for introducing a wealth tax in the UK are looked at in Kayte Lawton and Howard Reed, Property and Wealth Taxes in the UK: The Context for Reform. Institute for Public Policy Research, 2013. http://www.ippr.org/publication/55/10503/property-and-wealth-taxes-in-the-uk-the-context-for-reform

Who Said the Tories Have Changed? The Kirkby Rent Strike and the Housing Finance Act 1972

6a00e5532538c4883301901e370e1e970b-320wi           images

Politicians have short memories. The moral outrage expressed by current Conservatives at the size of the nation’s Housing Benefits bill has been, unsurprisingly, targeted at an irresponsibly profligate Labour government but they forget that there is a history behind this that goes back to legislation that, in its time, did as much damage to the poor as today’s Bedroom Tax. Legislation that was passed by Edward Heath’s Conservative government in 1972. You may remember it. It was called the Housing Finance Act and it was sold to the public as a benign policy to house the homeless.

The Act placed a duty upon Local Councils  to give priority to housing homeless families with children. It gave councils a nasty surprise because it demanded they find the resources for an immediate result and it appeared to sweep away the idea that homeless families, new to a council’s area, could simply be ignored.  Instead of legislating for open access to council houses which would have stimulated the building of a larger stock, better able to respond to urgent need, councils were required to examine in detail, the meaning of a duty to house the homeless with immediate effect. There was no time to plan for and build more housing capacity and so this simply led to increases in the waiting lists. When it comes to making policies directed at the working class, it seems the Tories have always failed to think things through. But it gets worse…

download      Although councils had to find accommodation immediately for families with children, their legal duty only required that it be for a limited period which would allow time for “responsible families” to find their own accommodation. This period was determined to be 6 weeks. Inevitably the result was to  revive the category of Bed and Breakfast accommodation for homeless families and the cost of this per day to councils quickly rose to double the weekly rent of a council house  providing lots of scope for Tory rhetoric about how the “irresponsible families” who were unable to find a house in 6 short weeks were a drag on the economy.

In fact, what happened as a result of the 6 week rule was that many families once kicked out of their temporary shelter were forced to move back to the council areas they’d originally left in the hope of finding a home. What we’re seeing now with the Bedroom Tax forcing people out of high rent boroughs isn’t much different to what was happening back in 1972. It’s a tried and tested old Tory ruse to destabilise the poor working classes, ‘softening’ them up to accept jobs at any price and be grateful for the worst kind of housing.

images (1)  The true intentions of the Act were revealed in an announcement in 1971, the year before its passage. Council rents would double, ostensibly to subsidise the housing of the homeless.  However, in Tory circles it seems this rent rise was a cynical attempt to manipulate the housing market.  They gleefully predicted a                                                                      boom in private house building driven by an expected flight of council tenants from the high council rents into home ownership.

House prices rose rapidly, but council tenants didn’t miraculously become rich enough overnight to buy their own homes. They stayed put and more of them claimed Housing Benefit to cope with the rent increase. The hapless Tory market driven logic had failed again to appreciate the real circumstances of working folk, but their divisive moral rhetoric was on top form nonetheless…

Under the increased pressure of rising house prices council waiting lists inevitably grew and with this came a moral panic fueled by suspicions of queue jumping. An insidious new category of “scrounger” known as  “the intentionally homeless” was created. These were people considered to be homeless as a result of their own actions. Just as today, people were  incited to hate by the insidious Tory rhetoric. Once labelled intentionally homeless it sanctioned the official withdrawal of help from “offenders”. They do love their sanctions, these Tories, don’t they?

images (2)  The reason for this doubling in council rents reveals another enduring Tory meme, one that Iain Duncan Smith is currently flogging to death.This is their notion of ‘fairness’. In the private rented sector at the time there were procedures for setting what was known as a ‘fair rent’ on a property which had to take account of current market conditions in order for landlords to be able to make a profit from renting their property.

Before the Housing Finance Act 1972 this didn’t apply to council housing. Local Authority rents were charged at the level of a balanced budget, which meant rental income balanced against loan charges and the costs of new building. The Act changed all that and they were now required to raise them to private sector levels. Mr Heath called this ‘an economic fair rent’.

So basically, under the pretence of looking after the homeless and bringing fairness into the system the Tories manipulated the housing market with the effect that their property and that of their supporters increased massively in value. House prices rose 12% in the year of their announcement to increase council rents, 36% the following year when the Act was passed and an amazing 51% the year after.

On the other hand, council waiting lists grew exponentially, homelessness increased and the Housing Benefits bill went through the roof. But hey, they could blame all this on the poor!

IMG_3101 As with the Bedroom Tax today, one of the hardest hit areas in Britain was Merseyside.  The 1970s were a time of soaring inflation rates – reaching a peak of 25% in 1978 and unemployment in Liverpool was high.

3,000 residents on the Tower Hill estate in Kirkby were enraged by the rent increases, especially since the homes they rented from the council were in a dire state of repair. They protested by organising a 14 month long rent strike and the documentary below, which was filmed in the October of 1972, is the story of that action. I was amazed at how relevant what was being said by those council tenants almost 41 years ago is to what is happening right now under a Tory government (effectively) which relies on the same old ideology. Who said the Tories have changed? Why ever should they? It wouldn’t be in their interests.

Pride Comes Before A Fall: Problems With Universal Credit Could Leave IDS With Egg On His Face.

Fee-for-use-Iain-Duncan-Smith-1797134 In yesterday’s Observer Iain Duncan Smith once again boasted about how proud he was of his precious welfare reforms. Instead of addressing the very real and totally legitimate criticisms of his performance so far he pointed to the fact that the DWP had delivered their programme of torture on time:-

… we already have a proud record of achievement… We promised a benefit cap and it began, on time, in April in four London areas. It will be completely rolled out by September. We introduced the new personal independence payment as planned and on time. Automatic enrolment started last year, and now 1 million people have been registered into a workplace pension. People are using our Universal Jobmatch website for more than 5m job searches a day. Our Work Programme has launched and the industry tells us that so far 321,000 people have found a job through it.I am proud of this record.

sick  How any decent, sane human being can ignore the thousands of lives that have been devastated by his policies or refuse to acknowledge the deaths and suicides that can be directly linked to his actions is totally beyond my comprehension. Why a newspaper like the Observer gave him the space to make those comments is also a  mystery to me. And his refusal to undertake an impact assessment of the effect he’s had on the lives of disabled people simply shows that he doesn’t want to know. The only conclusion you can draw from this is that he’s irresponsible, unprofessional and should never be allowed to ‘serve’ as a politician again.

shoes But as usual the odious Mr Smith is not giving us the true picture about the DWP’s performance when it comes to the progress of Universal Credit. There are huge problems with it. Two aspects stand out here. The first is to do with their badly thought through devotion to ‘digital by default’. This report from Public Net published today shows that the DWP have overestimated the number of people who will be able to claim the benefit online. The potential for chaos is tremendous.

UNIVERSAL CREDIT PILOTS REVEAL CHALLENGES FACING BENEFIT CLAIMANTS

Headlines: July 29th, 2013

Many benefit claimants will struggle to meet the requirement of the new welfare arrangements which are due to be introduced from October 2013 with the launch of universal credit. Pilot schemes started last year by councils have revealed the scale of the difficulty many claimants will experience.

Universal credit will require all claimants to submit claims on line. Although 86 per cent of the UK population have access to the internet, the pilots have found that in the case of benefit claimants it is closer to 60 percent. Theoretically claimants can use facilities in libraries to submit claims, but they don’t visit libraries and they need support to cope with the technology and with the benefit processes. Some pilots are experimenting with providing access points in council premises and with staff on hand to support the claimants. Other pilots are exploring various approaches to improving access but have found it difficult to encourage take up.

Universal credit will roll up all benefits into a single payment which will be made directly to the claimant. This will meant that currently where some housing benefit is paid to landlords, in future it will be paid directly to the claimant. The pilots have revealed that many social housing tenants have problems with debt and rent arrears which might compound possible problems with personal budgeting.

Some councils have found a reluctance from customers to take part in budgeting and financial training in group sessions. It is thought the reluctance is due to the stigma of engaging in sessions which may highlight personal debt and rent arrears issues. The uptake of group financial education sessions in some authorities has been so low that sessions have been cancelled. This evidence is mirrored in the Direct Payment Demonstration Pilot areas.

Different approaches are being used to support personal budget management. They include sessions in smaller community groups and collaborating with partner organisations. Changing the welfare culture, which universal credit seeks to achieve, is a mammoth undertaking and it raises issues which must be addressed to bring success. While solutions to the problems are available, they will need time and funding on a scale which has probably not been foreseen in the implementation plan.

global race  The second report is potentially more damaging since it concerns the IT system that’s being developed to allow Universal Credit to be calculated. Because it combines all previous benefits into one package claimant information has to be gathered from HMRC systems and the system used by local authorities to calculate Housing Benefit. It seems they’ve messed up and now need to start from scratch. With the next roll out due in only two month’s time (October) its looking increasingly unlikely that even the six centres that are earmarked for the next stage will be able to cope. These computing problems were highlighted earlier in the year but in typical IDS fashion our SoS shrugged them off and refused to acknowledge that his ‘baby’ wouldn’t be born on time. Again Public Net have the story:-

UNIVERSAL CREDIT AMBER RED-RATING VINDICATED

Headlines: July 15th, 2013

Last year’s Government review conclusion that the Universal Credit project should be rated as amber/red because its successful delivery was in doubt and urgent action was needed, has been proved to be correct. Current trialling of the system with simple claims has revealed failings and there is to be a new design for dealing with the more complex claims.

Universal Credit will simplify the benefits system, improve work incentives and reduce fraud and error. It will replace income-based Jobseeker’s Allowance; income-related Employment and Support Allowance; Income Support; Child Tax Credits; Working Tax Credits and Housing Benefit.

The Universal Credit project is being tested in 2 areas of the north-west, with another 2 starting later this month. The pathfinder trial is restricted to new claimants who are specially selected. Despite this narrowing of usage, it is understood that significant manual input by officials is required to verify accuracy and deal with other problems.

This assessment of the pathfinder is supported by the announcement that the next stage of development in October will be restricted to 6 additional job centres. The original project plan was for all new claims for out-of-work support to be treated as claims to universal credit from October 2013.

A potentially more serious aspect of the project is how the system interacts with Real Time Data System which includes information about earnings of claimants from HMRC. It appears that this element of the system design has been scrapped and it is now ‘back to the drawing board’. The official line about this re-think is that there is a need to explore enhancing the IT for Universal Credit working with the Government Digital Service.

The need for a re-think is unsurprising, because the universal credit system design was completed prior to the emergence of the Real Time Data System. Pressing on with the system design without knowing what the final integration requirements would be, involved many assumptions. This was a high risk strategy which proved unsustainable.

Re-writing this element of the system will take time and the trialing of in work claims cannot start until it is possible to use information from the Real Time Data System. Getting the IT system to perform effectively is only one of the major risks to the success of the project. The cultural transformation involving claimants moving to a digital service will be difficult to achieve. In a move to promote this transformation 20,000 Job centre Plus advisers will be involved in a training scheme and ten pilots will test how to best encourage claimants to progress in work.

6a00d8341d417153ef0133f5d6b4ef970b-550wi   Mr Smith’s plans to get everyone including the terminally ill and profoundly disabled working to make Cameron’s pipe dream of winning the ‘global race’ come true seem to be nothing more than pie in the sky. The tragedy is by pursuing their hopeless policies this government are causing misery and death.

Tower Hamlets’ Council Speaks for All LA’s About DWP Failings

_52802919_52802918 Back in February this year the London Borough of Tower Hamlets submitted evidence to the Communities and Local Government Select Committee outlining the difficulties it was having in supporting vulnerable families who were suffering the impact of welfare reforms. Their evidence is reproduced below, It speaks for all Local Authorities struggling to cope with the fallout of Iain Duncan Smith’s precious baby, welfare reform.

Housing-Crisis-Continues-001 Tower Hamlets was dubbed an ‘Islamic Republic’ by the Telegraph back in 2010 after it elected  Lutfur Rahman as mayor. In a 2012 local election the Tories expressed concern that that there had been vote rigging and electoral fraud.

1315088493-edl-fail-to-demonstrate-in-tower-hamlets--london_815479 Perhaps because Tower Hamlets has a big Muslim community it has been a magnet for extreme right wing groups such as the English Defence League whose recent attempt to hold a rally in the borough was thankfully successfully blocked by concerned residents of all creeds. Its a close knit community and a community that is suffering badly thanks to benefit caps and bedroom tax. In this sense it has a lot in common with many more Local Authority areas in the UK so the evidence its councillors presented to the Select Committee could have come from anywhere in the country. Here’s what Tower Hamlets said,

HC 833 Implementation of Welfare Reform by Local Authorities

Written submission from the London Borough of Tower Hamlets (IWR 49)

The London Borough of Tower Hamlets welcomes the Communities and Local Government Committee inquiry on the implementation of welfare reform by local authorities, and the opportunity to respond.

As Service Head for Corporate Strategy and Equality I oversee the Tower Hamlets Welfare Reform Task Group. This Task Group brings together officers from across Council departments, including Housing Options and Benefits, as well as health partners, advice agencies, housing providers and Job Centre Plus.

The close working of this group allows us to stay abreast of all critical developments around welfare reform and ensures we are able to work across the partnership. It also allows us to draw on a wide range of expertise and experience, from how we inform our residents to monitoring the impact of the changes.

Our submission reflects the expertise across the Welfare Reform Task Group and although I am its primary author, I credit the work of my colleagues in enabling us to submit this comprehensive response.

1. Executive Summary

1.1 Inner London, and Tower Hamlets in particular, are particularly impacted by welfare reform due to high housing costs, low wages relative to the cost of living and barriers to employment.

1.2 The Council and its partners have real concerns that for some families the impact will be increased hardship which is likely to increase pressure on already stretched public and voluntary services locally.

1.3 In particular, we are not sure that the potential impact of a policy such as the national cap, unrelated to local rent levels, on high rent areas such as inner London has been fully considered.

1.4 The somewhat arbitrary nature of the cap, impacting those on sickness benefits, or those caring for them, and those exempt from seeking work due to responsibilities for young children as well as those fit for and seeking work, is a particular concern.

1.5 Our evidence is that it does have a differential impact on black and minority ethnic and female-headed households and that its equality impact should be further reviewed with this in mind.

1.6 We also have concerns about how the impact of the benefit cap on council finances, both directly through our duty to those who are found homeless, and indirectly through the pressure that increased hardship or forced moves amongst families, will put on services such as schools, social care, health and mental health provision, amongst others. Whilst difficult to quantify at this time, it will be important to explore further whether these new pressures and the impact it will have on the 1600 households and nearly 5000 children, will outweigh any savings achieved by the cap.

1.7 Other changes such as the localisation of Council Tax Support and localisation of the Social Fund will bring additional administrative burdens to the Council. It is difficult to see how devolving these very similar processes and having them run separately within separate authorities, potentially requiring a myriad of new IT systems and processes, can be cost effective overall.

1.8 More generally, we have been disappointed in the quality of information and guidance that has been forthcoming from the DWP in enabling us to deal effectively with these changes. Greater sharing of information about those to be affected or, in the case of the Social Fund about current caseloads and recipients, would have helped us prepare better for these new burdens.

1.9 Within these difficult circumstances, we have found real commitment within our authority and amongst our partners in registered housing providers, third sector advice agencies, health and Job Centre Plus, in working with us to ensure the implementation of these changes is as smooth as possible and that those affected are informed and supported to prepare. The extent of work we have done in this field has been identified as amongst the most comprehensive in London and we would like to take this opportunity to share with the Committee this material which is all available on our local Council website atwww.towerhamlets.gov.uk/welfarereform

Finance

2. Are local authorities being allocated sufficient resources to deliver services such as localised Council Tax Support and advice to claimants on Universal Credit?

2.1 We have significant concerns that sufficient resources are not being allocated to support this major change to the welfare system. Indeed resources are being cut back.

2.2 Reductions in funding include:

· 10% plus cut in award funding for Council Tax Support (CTS)

· DWP has recently informed the council that Housing Benefit (HB) / Council Tax Benefit (CTB) admin funding will be cut by almost £500,000 for 2013/2014. (Circular HB/CTB A5/20012)

2.3 In addition, there are significant other resource pressures:

· We believe there is a risk of significant further reduction in Government admin subsidy funding to local authorities.

· The rationale for this would be that local authority admin requirements would reduce in line with the number of HB claims lost to Universal Credit. However, our analysis in Tower Hamlets shows that there will not be a significant reduction in caseload and assessments when HB migrates to UC.

· We also currently operate a joint HB/CTB processing system and the complexity of CTS assessments will remain on par with CTB assessment (and possibly more complicated).

· We therefore doubt that significant savings in respect of admin will be realised.

2.4 Lack of clarity about future funding: Considering the new burdens being faced by local authorities through the implementation of the various welfare reforms, it is yet unclear whether:

· The CLG / DWP have undertaken an analysis of the resource pressures and new burdens local authorities are facing and will continue to face.

· Funds will be made available to reflect this additional resource requirement, what the rationale for the apportionment would be and how much local authorities will be allocated.

3. Are there financial risks to local authorities from Welfare Reform changes? Are such risks being adequately addressed?

3.1 Benefits Cap: The most significant resource challenge for local authorities, primarily those in London, will not be the implementation of localised council tax support or advice on Universal Credit, but mitigating, as much as possible, the severe impact of the Benefits Cap.

3.2 Based on DWP scan data around 1600 households in Tower Hamlets will have a shortfall in benefit payments following the introduction of the cap. The average loss will be £103 per week (£6,706 per annum). The households affected include nearly 5000 children who will be impacted, at threat of losing their homes.

3.3 Tower Hamlets has implemented a number of actions to mitigate the impact of the cap including:

· Borough wide awareness campaigns of the changes

· Personalised joint housing options / employment advice visits to every household who is at ‘high’ and ‘medium’ risk

· A series of high profile drop in roadshow events (“Money Matters Month”) providing advice to over 600 residents in one month

· A short welfare reform video, booklet and practitioners guide

· Ongoing training for council, housing provider and partnership staff

· A rich number of resources for residents and practitioners on our website: www.towerhamlets.gov.uk/welfarereform

3.4 Despite these activities, we still envisage a large impact on a significant number of households across the borough.

3.5 In Tower Hamlets some of the biggest losers are black and minority ethnic families and single parent households, usually headed by women. We have concerns about the extent to which the equalities impact of this policy was fully assessed and considered before implementation.

3.6 Our biggest concern is about the human impact of this change on some of our most vulnerable residents. There will also be consequent financial risks to the local authority which include:

· Cost to the local economy: Based on DWP scan data the estimated total loss to Tower Hamlets residents in lost benefit payments due to the cap will be approximately £8.5m per annum which will have a serious impact on the affected households. As spending patterns are not entirely clear, it is difficult to calculate what percentage of this loss will be felt in the local economy, but the overall loss is likely to be significant, potentially exacerbating depressed demand, increasing debt and reducing local economic growth.

· Temporary accommodation costs: There are currently 450 households living temporary accommodation due to homelessness who will be affected by the cap. The Housing Benefit lost to these claimants has been calculated to be £3.27m per annum. The Council has a duty to house these residents. Tower Hamlets Council will be forced to meet these costs unless able to find alternative and less costly housing options for these families.

· Lack of affordable housing options: There are no private rented options within the borough or within most of the neighbouring boroughs which will be affordable to families affected by the benefits cap. The average rent for a two bedroom property in the Tower Hamlets is £350 per week, and a four bedroom is £524 per week as of March 2012, in itself over the £500 per week cap. The Council will therefore have little choice but to consider rehousing homeless families outside of the borough, and potentially some distance from families, disrupting communities, schools and support networks.

· Increase in homelessness: On top of those families already homeless and in temporary accommodation, there are a further 460 households currently in the private sector who will be affected by the cap. The average shortfall for these families is £104 per week (very slightly above the £103 average for all types of dwelling. The loss for those in the private sector is above a £79 average weekly shortfall for those renting in Housing Association dwellings and below the £143 shortfall for families in homeless accommodation). They are unlikely to be able to negotiate lower rent levels with their landlords or find alternative local housing solutions. Many will find themselves in rent arrears and subject to eviction, leading to further homelessness applications to the Council.

· The cost of rehousing: There is a massive human cost in re-housing families out of the borough – with the loss of support networks and community ties. There are also potential hidden financial costs to the public purse which may outweigh benefits savings. For example, many provide or rely on informal care from families and these costs may in future fall to the state. Allocating new schools, new GPs, new addresses, new practitioner contacts and of course new housing are all additional costs relating to rehousing some of the most vulnerable residents in society.

· Increased demand for emergency support: Those affected by the cap will face the sharp dilemma of paying their rent or feeding their families and heating their homes. Local authorities who will from April be delivering the Social Fund face a potential significant increase in demand for these, and for other payments including child care costs and discretionary housing payments. Our whole Localised Social Fund budget is currently £1.4m compared to an estimated benefit shortfall of £8.5 million. There are also additional administrative costs related to the localised Social Fund which each individual council is having to bear, calling into question the efficiency and rationale of devolving the Social Fund.

3.7 Planning for these risks is hampered by:

· Lack of information and funds from CLG / DWP making it difficult for Tower Hamlets to plan accordingly for the forthcoming changes, and to enable us to attempt to maintain the current level of service provision

· The timetable for implementation is too tight to ensure enough support is given to residents to cope with changes – both rehousing and finding employment solutions for vulnerable residents take time.

· There has been little or no information about the historic demand for Social Fund payments (i.e. who is demanding what and why) making planning and effective delivery of the new Localised Social Fund more challenging and less efficient.

Housing

4. How will the separation of the administration of Council Tax Benefit and Housing Benefit affect claimants?

4.1 LBTH, like most Local Authorities are committed to maintaining a seamless service in respect of both Housing Benefit and Council Tax Support, whist the Council retains responsibility for the administration of HB.

4.2 This is being achieved in the following ways:

· Initially involving the retention of a single application form and joint HB/CTB processing via integrated ICT processing systems which issue separate award notifications.

· In addition to Housing Benefit and Council Tax Benefit the application form also incorporates an application for education and welfare benefits.

· Currently recipients of ESA(IR), IS, and JSA(IB) are passported to full HB/CTB without LA’s having to enquire further regarding any other income they may have. However, the inclusion of Housing Benefit within Universal Credit and the fact that it is impossible to separate and disregard the Housing Cost element of the final Universal Credit award, means that “passporting” will not be possible and this is likely to complicate the Council Tax Support assessment process.

4.3 Local Authorities will have significant difficulty replicating the passported provision inherent in the current HB and CTB schemes. This means that a relatively streamlined, joined-up process currently faced by claimants is likely to be significantly complicated in the future.

4.4 It is also likely to increase the assessment requirement for Council Tax Support – meaning claimants will have to complete separate forms and provide information to both the DWP and to the Council.

4.5 Universal Credit is being designed to be One Benefit and One Payment and CTB local schemes are likely to closely resemble the benefits incorporated within UC. The rationale for operating a local CTS scheme independent of Universal Credit has therefore not been made clear.

5. How significant an issue is housing benefit fraud under the proposed new system and what measures are being taken to address it?

5.1 Tower Hamlets has a number of mechanisms in place to prevent fraud. The investigations team works closely with other agencies including other departments within our council, other councils, the Department for Work and Pensions, the police and members of the public to ensure incidents of fraud are continuously addressed.

5.2 The committee may want to consider how media coverage remains overwhelmingly negative with regards to those receiving benefit payments. A report by Turn2us, part of the poverty charity Elizabeth Finn, illustrates the level of disinformation here [1] . This amount of disinformation can have a negative impact on the quality of the debate on welfare reform, and the subsequent solutions to challenges around welfare.

6. Are there sufficient safeguards to protect social landlords from financial harm resulting from the payment of housing benefit direct to claimants?

6.1 Social landlords have considerable concerns about the payment of benefit direct to claimants.  Residents as well as their landlords will face considerable pressures as a result. The full scale of the impact has not yet been clarified – the pilots have not reported in sufficient detail to be able to take a view on the risk to rental income and that in itself is a worry. However, there are some key areas where social landlords do have concerns:

6.2 Impact on Landlords

· The increase in transaction costs decreases provider income which is used to invest in homes and services.  That income will instead be paid to the companies such as AllPay or the Post Office or the banks who facilitate the transactions.

· Feedback from partner landlords suggests that all are increasing the resources we spend on supporting residents and chasing arrears – at the expense of improving homes and services to residents – this is on top of the pressure on income should arrears start to increase

· We still don’t know how the courts will view arrears cases which are as a result of these changes – guidance to the courts from the Government would be useful.

· We would suggest that the level of arrears necessary to trigger a direct payment needs to be low enough such that there is a realistic prospect of the arrears being paid in a reasonable timescale and servicing the arrear is not significantly onerous on the tenant.

6.3 Impact on claimants

· Many of our residents are vulnerable to financial abuse, from legal and illegal lenders – we will need to provide additional services to identify and support these residents as otherwise this cash will be diverted to their abusers and we will end up pursuing arrears. Locally, we have a financial inclusion network which is seeking a range of ways to increase local people’s skills in managing money and avoiding debt, but the level of change associated with welfare reform is likely to significantly increase demand on these resources.

· Once direct payments are introduced, many residents may also be more open to abuse from family members and acquaintances. With the payment going to the notional head of household it will put many already vulnerable residents – particularly but not exclusively women – more dependent on their abusers and so more trapped in abusive relationships with the associated risks. Residents are also considering moving back in with abusive family members as a consequence of falling incomes because of the cap.

· We would suggest that the Committee seriously consider recommending a change to this aspect of the policy, specifically where a tenant wants to have their rent paid direct to their landlord they should be able to request this at the outset.  If it is an informed choice then we do not see how this would undermine the Government’s publicised intent that people should take responsibility for their finances.

Employment

7. What impact have Welfare to Work schemes had, or are likely to have, on the numbers of benefit claimants?

7.1 Our contact with our affected families in temporary accommodation, coupled with discussions with Job Centre Plus, local employment support agencies and housing providers have stated that the overwhelming majority of those affected by the cap and not in work are unlikely to be able to move easily into work.

7.2 This is often because of childcare responsibilities and/or childcare costs make it financially unviable for lower earners. Nearly half (46%) of those affected by the cap in Tower Hamlets are single parents. Many of these have children under 5 and thus are not expected, even within new stricter job seeking rules, to be available for work.

7.3 Other residents have poor health and are receiving Incapacity Benefit or Employment Support Allowance in reflection of this.

7.4 In the move from IB to ESA the Government has itself recognised that assisting long term claimants of sickness benefits is a long term approach which needs to be accompanied by training and support. There is no quick fix which will enable employment options to be realistic for those affected by the cap on implementation in April next year.

7.5 Often part time work is a useful option for those moving back into work following ill-health – but part time options below 24 hours will not exempt people from the benefits cap.

7.6 Even where those affected are available and looking for work, the lack of job opportunities, particularly in a job market hit by recession means finding employment is not a simple solution. In addition, many residents lack relevant competencies, which require significant additional investment in training and skills.

Other

8. Is the guidance available to local authorities from central government on implementing welfare reform adequate? Are there areas where more or better guidance is required?

8.1 In general, we have been disappointed about the level of information and guidance available to local authorities to implement these reforms. This includes:

8.2 A lack of information on the progress being made on Universal Credit implementation and likely timescales

8.3 A lack of information on the level of contingency funding available to help offset the impact of the reforms.

8.4 A lack of accurate information about numbers affected – the DWP scan produced to identify residents likely to be affected by the cap, appears to be flawed as it is not based on current data. We have received three different scans each with different numbers and names of those affected. We have worked with the DWP on these issue, but to help us identify errors with the scan it would be helpful if DWP were to publish their assessment formulae.

8.5 A lack of information with regard to local Social Fund administration – in particular DWP were extremely slow to publish statistics regarding current administration of the Social Fund and although figures have now been published on the DWP website, we feel it would be beneficial to visit the local DWP centre which processes Social Fund applications from LBTH residents. However, our requests have been refused, which is a pity as we feel this would be of more practical use than the regional and generalised Social Fund seminars being conducted by DWP.

8.6 DWP HB/CTB Circulars are less frequent and HB Direct does not provide the level of guidance we are seeking.

Methodology:

9. Is the Government’s timetable for implementing Welfare Reform achievable?

9.1 We believe it will be exceptionally difficult. The DWP have only recently set up specialist teams to deliver the benefits cap which will involve merging benefit streams to calculate the total. Effective UC delivery is likely to require the integration with HMRC’s RTI system, but developments on this have not been forthcoming

10. What evidence is there that local authorities are able to use effectively existing services or contracts for the delivery of new local Social Fund schemes

10.1 The new work to operate the Social Fund for Tower Hamlets will require additional claim handling and assessment staff and new systems. Workload planning is hampered by the lack of recent detailed information from DWP on the volume of applications and on the number, values and purposes of grants or loans.

10.2 We are evaluating potential suppliers of systems to administer the Social Fund, including some with whom we have an existing contract. However, it is very unlikely that we can make variations to a contract to encompass the Social Fund, given the potential value of the contract and the need to ensure best-value, fair and transparent procurement. This gives some concern in terms of the timescales to evaluate options and procure a system.

10.3 All of the potential suppliers are still developing their systems, so there is a risk that we may move to procure a system which is not ready for testing, training and adapting for local criteria in time for 1st April 2013.

10.4 Some council services, especially in the social work fields, already help people with their applications for Social Fund payments from the Job Centre, and we are working to ensure that this support will still be provided. However, it seems likely that there will be an increase in applications to the Social Fund, and there would be no additional resource in social work or in local advice agencies to provide support for higher numbers of applicants.


[1] Benefits Stigma: how newspapers report on welfare; Guardian Data Blog http://www.guardian.co.uk/news/datablog/2012/nov/20/benefits-stigma-newspapers-report-welfare Accessed 11/12/2012

©Parliamentary copyright

Prepared 5th February 2013

250px-Canary.wharf.from.thames.arp As you can see Tower Hamlets council is pretty critical of the DWP. It seems that the DWP are not only reluctant to give us, the public, any clear and unambiguous information about their plans, but they also keep Local Authorities in the dark making it harder for them to plan ahead to help those in the most need – which they have a duty to do.

Personally, when people are vague and downright obstructive with me I tend to think they’re up to no good…so what is the DWP really up to?

The Trial of a Proud Man: Evidence against Iain Duncan Smith

the_great_ids   Iain Duncan Smith has spoken a number of times about his pride in the welfare reforms he’s presided over. He’s dismissed all criticisms and poo-pooed all the evidence that these reforms are causing hardship.

Imagine that IDS could be put on trial for the harm he’s done (I wish) and evidence was presented for the prosecution. What would that evidence be? Where would we begin to start? Well, here’s an interesting video from February this year. It shows three well educated, articulate  people appearing before the Scottish Parliament’s Welfare Reform Committee, telling how they suffered at the hands of Atos. Its a long video, over an hour and a half, but its well worth watching.

lbc-logo Here’s more evidence for the prosecution in the form of a conversation on LBC radio. A caller, Sally, who claims to be a former nurse assessor at ATOS  gives Petrie Hosken an uncomfortable insight into how assessments are made.

 

So, anyone going to present any evidence for the defence?