Just about Surviving
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Community Links latest research publications set out the impact of Coalition Government welfare Reform on the communities of east London. Research findings warn that the Government’s welfare reforms are likely to lead to considerable costs by wasting money in reacting to, rather than preventing, crisis. The reforms are failing claimants by pushing people towards a cliff edge.A second report "secure And Ready" identifies how a social security system tha prevented problems rather than coped with crisis could save money.
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Just about Surviving
- 2. Just About Surviving Monitoring the impacts of welfare reform in Newham Ellie Roberts, Community Links
- 3. Research overview ‘Simplify the system and make work pay’ Need for evidence on impacts of reforms Current government set on implementation; learning important for future Methods: 18 in-depth interviews with claimants, plus staff and stakeholders
- 4. Finances Squeeze on incomes is pushing people into ‘survival mode’ Coping strategies – often harmful Competent money management and reluctant to take on debt ‘So I’ve got a roof over my head… the thing is that sometimes I miss a week from the rent because something else has come up. I’m robbing Peter to pay Paul’
- 5. Work People enjoyed working but did not see it as a route out of poverty Financial ‘stick’ approach to ‘making work pay’ too limited Sense of resignation and powerlessness amongst those who could not work ‘If you work for the minimum wage, how to you pay your rent?’ ‘I think they are trying to get everyone they can into work even if they are wearing an oxygen mask’
- 6. Housing Reforms to HB and LHA make people worry about meeting high housing costs DHP crucial to allowing people to meet costs. People felt powerless to change their housing situations ‘I tried to look up how to move because the rent is too expensive… private rent is a whole load more compared to if I was accommodated by the council. It’s just not really working out for me.’
- 7. Support Family and friends important for support and advice Lack of trust in formal organisations to give support. Organisations offering support feel constrained by what they can offer. ‘They’re my support network and I need that even more than the money – their emotional support… I don’t know what I would have done if I didn’t have these people around me.’
- 8. Key points Knock-on impacts – costs down the line “Just About Surviving” day to day System is short-termist Unsustainable situations
- 9. Secure and Ready Towards an Early Action social security system Will Horwitz, Early Action Task Force
- 10. Social security now It does a big, important job Insurance: dealing with setbacks Social investment: seizing opportunity Sometimes compensating for failures elsewhere Often done badly, with knock on costs
- 11. Done badly… Acts too late Erodes confidence and self esteem Stigmatises receipt of support Ignores other support – eg from family and friends Pays too little Sometimes abandons people completely = Insecurity
- 12. 1) Insurance: Ready to deal with setbacks Act early Presumption of willingness More universal support Recognise importance of relationships Value other forms of contribution Pay enough to live on
- 13. 2) Social investment: Ready to seize opportunity Affordable housing Stronger labour market institutions Childcare Health Skills and education
- 14. Spending rules standing in the way Short term budgets Budget silos Welfare cap
- 15. Initial ideas to stimulate change Ten year planning/testing Treat Early action spending like capital spending Realign incentives & an early action loan fund Reform the welfare cap
- 16. Where next? Early action approaches gaining ground elsewhere Changing the tone of the welfare debate Applying framework to Jobcentre Plus
Editor's Notes
- Background to Community Links: CL is a social action charity based in East London and nationally focused. We run a wide range of community services and projects for all ages. One of our key aims is to find new solutions to old problems and influence national debates. When the Coalition’s welfare reforms were set out, we knew they’d have a huge impact on our community – and this seemed like an ideal opportunity to develop a project incorporating a strong evidence base. This is the second [third?] report in a longitudinal study monitoring the overall impact of the Coalition’s welfare reforms in Newham.
- Background to Community Links: CL is a social action charity based in East London and nationally focused. We run a wide range of community services and projects for all ages. One of our key aims is to find new solutions to old problems and influence national debates. When the Coalition’s welfare reforms were set out, we knew they’d have a huge impact on our community – and this seemed like an ideal opportunity to develop a project incorporating a strong evidence base. This is the second [third?] report in a longitudinal study monitoring the overall impact of the Coalition’s welfare reforms in Newham.
- Two years since the 2012 Welfare Reform Act was introduced to simplify the system and make work pay. The coalition’s welfare reforms represent a huge change to the system. There is a lack of evidence on what the impacts have been – for example the government has repeatedly refused to undertake a qualitative impact assessment of welfare reform, despite recommendations from SSAC and others. Where there is evidence about welfare reform it is mostly quantitative. We know for example through DWP analysis that only 4% of those impacted by the BT have moved but half being in arrears. Our findings certainly echo this sentiment of significant and widespread impact. Similarly, we know how many people have been sanctioned, or affected by the benefit cap, and we know some figures about how employment has changed. But we don’t know much about HOW the reforms have affected behaviour. Our study adds to this by getting to the human detail of how individuals have responded. Qualitative research is really useful in this context, especially given many of the reforms have been aimed at changing behaviours. In terms of the policy context, not much has changed over the past 6 months and it’s unlikely to change until after the next election. In Newham (where this research has taken place) we are still waiting for UC. That said, the direction of travel for WR is clear: Overall budget is capped and both parties recently announced further cuts to CB. There may also be further announcements in the Autumn statement tomorrow. Another likely trend is the extension of conditionality within the SSS. With these trends in place, it’s especially important to improve our understanding of how changes to the benefit system affect people, their behaviours, and their experiences – which is one of the main reasons for us undertaking this study. METHODS Eighteen in-depth qualitative interviews with local people Two focus groups with Community Links employment and advice staff Seven qualitative interviews with local policy makers, advice staff and other stakeholders Findings in this report build on findings from the previous report ‘Tipping the Balance’ I’ll now take you through some of our key findings across four themes, finances, work, housing and support.
- We spent a significant amount of time talking to respondents about their finances to understand the money coming and going out of households – this helped us gain a sense of some of the crunch points and challenges associated with managing tight and fluccuating budgets. Incomes are low (even for people in work) and outgoings were in some cases disproportionately high and uncontrollable. Welfare reform contributing to this – and doing so in an indiscriminate way: no accounting for how other reforms have affected people. The continued squeeze on incomes was forcing people into survival mode – this is characterised by people focusing increasingly on coping short-term, but struggling to look longer term. Coping strategies: not paying bills/ waiting to the last minute. Particularly true with council tax – so we saw that lots of people were not paying CT and the very persistent LA collection strategy meant people getting into more debt. People were also borrowing from family and friends. Overall it was clear from our research that financially people are living on the edge with tight finances meaning that daily people are having to deal with really stressful situations around the choices they made about what to buy/ pay. But people are capable of money management – develop strategies to make money last longer and go further. EG - People feed their children and go without themselves; wash clothes by hand if their washing machine breaks; walk miles to work in the early hours of the morning. Finally we found that people were reluctant to take on debt, especially with formal creditors. This was due to the high cost of such credit and also often related to bad experiences they or family/ friends had in the past.
- Half of the sample were in work. The work that people had taken was mostly low-paid, in the service sector and often temporary. Work was not necessarily viewed as a sustainable route out of poverty – people were aware of it being poorly-paid and insecure in nature. Furthermore work did not necessarily alleviate financial pressures created by welfare reform. In fact people found that they struggled with new welfare challenges when they moved into work such as changes to Tax Credits, council tax and LHA changes. Whilst people enjoyed their jobs and found they got many non-financial benefits from working (eg: sense of worth, confidence etc) – the fact that they did not feel better off felt unfair. Also, the financial approach to trying to get people into work was too blunt. People talked to us about various motivations for working – beyond purely financial ones – but the reforms did not address these. Instead, the reforms had forced some people into ‘survival mode’ which made finding and keeping a job harder and less of a priority for that group. So in some cases it had failed to make use of their varied motivations for getting into work. Lastly there was a sense of resignation and feelings of powerlessness amongst those for whom work was not an option. This was specifically related to escaping some of the negative impacts of the reforms.
- Welfare reform has made people worry about their living situations, their ability to pay rent and the sustainability of staying in their homes. People lived across all three sectors and spent very different proportions of income on rent accordingly. Unsurprisingly living in the private rented sector was felt to be particularly insecure, expensive and unsuitable for some individuals and families. A key finding from our research was about the role that Discretionary Housing payments are playing in covering some of the impacts of the recent welfare reforms. DHP was temporarily enabling some respondents to stay through alleviating (often large) deficits caused by the BT and BC. Whilst the top-up was absolutely vital, the short-term nature of the subsidy does not enable people to feel secure or ready. Worryingly, people hadn’t received the support – through or alongside DHP – to allow them to change their situations, to avoid being affected by the bedroom tax or benefit cap in the long run. As such, we can see a cliff-edge being approached: it is likely that some will be evicted if/ when DHP is removed. Mixture of feelings about moving – some wanted to move to escape high rents or unsuitable conditions but felt powerless to do so due to a lack of suitable and affordable accommodation. Others were wanted to stay and talked about having strong emotional and practical attachments to places they had lived for many years. Often this was about staying near to family and friends that enable them to manage other aspects of their life.
- We found strong evidence to suggest that people got most of their support from friends and family. This was emotional as well as financial, and staying near these networks was seen as vital to people’s survival. However, it was unclear how sustainable these informal support networks were. [LC – can we expand on why its unclear how sustainable these were?] Due to previous negative experiences, respondents did not seem to trust authorities to provide the support they needed in a timely way, even when they tried to proactively seek it in times of need Reasons for negative perceptions were threefold. They found communications difficult to understand, they could not always get in touch with people to communicate and they could not always get the information they needed. This added to people’s feeling of isolation and powerlessness. Whilst financial support was seen as critical in helping people manage short and long term gaps, DHP was the only real financial subsidy that people were using or had heard of. As I’ve intimated already, there are concerns over the sustainability of this subsidy. We also found evidence to suggest that people were both giving and taking support as their changing circumstances dictated different needs - so for example we heard of stories of people helping out at foodbanks and shortly after needing to access a foodbank for their own needs. This highlights the fragility of people’s situations and the churn of people in and out of poverty and living on that knife-edge.
- In the report we make some recommendations for changes that we think would improve the impacts of welfare reforms for people. I won’t run through all of these recommendations, but instead I want to leave you with 4 key messages: Firstly, by looking overall at people’s lives, this kind of research allows us to see the knock-on impacts of the reforms on other areas. We are seeing how these knock-on effects are exacerbating people’s situations – leading to more costs and complications later down the line. Some of the examples I’ve already spoken about highlight this – impacts on people’s health, on their ability to heat their houses or feed their children, all have cost implications for other parts of public service The second key point explains some of the reason for these knock-on effects occurring. People are struggling to make ends meet across competing financial demands. Welfare reforms have eroded people’s resilience and forced people into situations where they are ‘Just About Surviving’ as they can’t see a proper pathway out of poverty despite what is often a clear willingness to improve their lives. Last time we saw the beginnings of this, when we talked about an ‘erosion of resilience’. This time, people are much further along and the real difficulties that people are facing to achieving long-term sustainable changes are clear. Every person in our sample whose situation is improved this time can thank DHP payments, and all of them have struggle to use these payments to make longer-term changes. Related to this, the third main point is that we are seeing the short-term approach of the reforms being passed down, making claimants also feel and act in much more short-term ways. The squeeze on incomes and the combined impact of several, often confusing, reforms being implemented at once squeezes people into focusing on getting by day-to-day and prevents them from being able to make long-term positive changes to their lives. Finally, we found that people are being pushed into vulnerable and insecure situations. They are drawing on unstable and unsustainable forms of support to enable them to just about survive. This includes both formal support (we can see people who receive DHP in particular approaching a cliff-edge), and informal support: some people turning away from formal support altogether and starting to rely on their social support networks. Some people who were previously giving support to others in their network, have now become the receivers of support – this shows the risk of some of these support networks becoming eroded.
- General introduction Ellie’s report takes a close look at individuals’ experience and the detail of the policy. Alongside that we wanted to take a step back, try and make sense of this in a wider context. Much of our work on social security in the last few years has felt reactive – to government policy. This is important but not enough on its own. Set out what evidence report is based on: - Community Links experience in sector delivering employment support programmes such as New Deal and the Work Programme for over fifteen years Also seen the harmful impacts of reforms though our Advice work Policy work over the past 10 years (influence on development of universal credit) and recent roundtable with other stakeholders Alongside our work on social security we have been running the Early Action Task Force for the past 3 years – asking how we build a society that prevents problems from occurring rather than waiting and dealing with the consequences. Group of cross-sector leaders had made the general case in a series of reports, made excellent progress with the public accounts committee and the treasury, with local govt in Wales and the local authorities around the country, but never applied it to social security. In policy work on early action, social security spending is often portrayed, rather crudely, as an avoidable ‘cost of failure’. A more nuanced view would improve the quality of the debate particularly on the possible savings from acting earlier.
- From the stories Ellie has told three things are fairly clear: It does a big job Helping us deal with unemployment, ill health, expensive housing, low wages. 5.3m people receive some form of social security 50% of us receive means tested benefit over 18 years In total over £130bn per year. Makes individuals more likely to take the risk of changing jobs or industries Tax credits managed to lift 1.4m children out of poverty in 2011/12 DLA/PIP and child benefit = cope with the additional costs of illness or having children allowing fuller participation Redistributive effect of social security across the lifecycle; the IFS showed that this redistribution accounts for over 10% of the total after just 15 years 2) It does a big job, but unfortunately it’s often unnecessary, in that it is merely compensating for failures elsewhere in public policy High housing costs particularly in the private rented sector and the loss of social housing Insecure, poorly paid work Preventable illness, and a lack of support and infrastructure Failures in the education system which leave young people unprepared for work 3) Perhaps this would be OK if social security worked smoothly once we needed it. But, as the stories in the previous report show, it clearly doesn’t. …next slide.
- Acts too late – sometimes deliberately – the delays in accessing ESA, or employment support , sometimes accidentally through poor administration/policy design – eg PIP assessments Erodes confidence and self-esteem Overriding finding of the Communtiy Links research has been the lack of support at JCP WCA causes ill people to get more ill – 95% reported deterioration of health due to assessment Stigmatises receipt Contributes to the impact we’ve just discussed And effects how people are treated: one survey found 15% people claiming benefits experienced verbal abuse; 4% (200,000 people) reported physical abuse; large numbers denied housing or treated less favourably by employers Deters people from accessing necessary support – somewhere around £10bn of unclaimed benefits each year. Undermines other forms of support and security We rely on family and friends at least as much as the social security system but the system is indifferent at best and actively damaging at worst – eg moving people a long way from support networks. Pays too little to live on – value of unemployment benefit relative to wages has almost halved in 40 years Cuts to benefits are main reason for rise in child poverty Imposes harsh conditionality Sanctions – including the 68,000 that were wrongly administered last year – push people to food banks and in some cases off benefits but there is little evidence that they help people get decent, sustainable jobs. The overall impact? A social security system that in too many cases makes people less, not more, secure. This is not necessarily accidental. The insurance and investment functions of the social security system have increasingly given way to a liberal view of the social security system – where it is primarily seen as a constraint on labour supply. In the analogy we often use in the Task Force, instead of building a fence at the top of the cliff, the social security system all too often waits until we’re at the bottom. And then installs spikes there, to make it particularly uncomfortable to stay there.
- How does this link to Early action? We talk about the overarching aim of an early action society: to build readiness. This framing is really important – social security is too often seen as just residual, We need to build readiness: So that we are ready to deal with setbacks (often called ‘resilience’) Those fences at the top of the cliff Ready to seize opportunity and thrive Here are just some ideas: Act earlier – step in at the first sign of trouble – or even before – rather than reluctantly intervening at real crisis point. Eg as soon as someone falls ill at work, not 9 months later. To anyone who is struggling to progress at work, or in insecure employment, not just when they claim JSA. Institute a presumption of willingness: Start from the premise that all of us want the best for ourselves and our family. If we are reluctant to engage with a service it’s because we don’t believe it has our best interests at heart – that is a failure of the service, not the individual. At the moment we get institutionalised suspicion – a system which seems largely indifferent to our wealth, health or happiness so long as we don’t receive a penny more than legislation intends. As just one small example, how about reversing the incentives on Jobcentres so that the best performing are those that issue the fewest sanctions, not the most. Be more universal – the assumption is that universal services will be too expensive so we never even bother to consider them. Yet heavily restricted services usually act much later, are more stigmatising, more expensive to administer, sometimes miss the majority of people they intend to support, and are often poor quality because people using them don’t have the social power to demand change. The Jobcentre is a spectacularly unpopular institution given the important role it’s supposed to fulfil. Perhaps a universal high quality employment support service which offered help with career progression and skill development at any stage – including when you lose your job - would be more effective and more popular. Or universal support with staying healthy in the workplace – Sweden offers £330 a year to every employee to spend on activity to keep them healthy at work. And perhaps we need to seriously explore the citizens basic income as a universal benefit. Recognise the value of relationships – friends, family, and individual support are at least as important in helping us deal with setbacks as the financial help offered by the state. Perhaps employment support services could be based around them – like Participle are exploring with Backr – or more priority could be given to helping people stay near friends and family when they lose their home. Value other forms of contribution – in the ‘core economy’ – caring and volunteering, are vital. The estimated value to the economy of unpaid care is £119bn a year, yet carers allowance only worth £1.9bn. Pay enough to live on – currently meagre – Out of work benefits only account for 39% of what single, working age people need to reach Minimum Income Standard; poverty worsens health and wellbeing – ultimately costing more too.
- Secondly, we also need to promote readiness to allow us to seize opportunity and thrive Ready to learn at primary school, to thrive at secondary school, to be ready to get a good job, and then when the time comes ready and able to be good parents. Investment well away from the edge of the cliff. A social security system should be a vital part of both. – need to see it more as an investment in people. The social investment approach would see a much greater focus on Affordable housing Stronger labour market institutions – higher minimum wages, stronger unions Free childcare – better for children’s outcomes and parents’ income. Investment in health – for example mental health at work. Only 4% of the NHS budget goes on prevention. Skills and education – age 16 – 19, retraining in older age, These are all covered in much more detail elsewhere, so we merely draw them into the picture at this point.
- Public opinion isn’t central but is an important consideration for social security policy. We often hear about how the public is increasingly against spending on ‘welfare’, and about stigmatized perceptions of social security and of claimants. The question that is asked in polls is usually. “How much do you agree that “the government should spend more money on welfare benefits for the poor even if it leads to higher taxes?” Just a couple of observations: 1) Leading ourselves into a trap with questions like this. Earlier action yields a triple dividend – spending more on social security could lead to lower taxes if it saves money elsewhere. 2) But nonetheless the public are supportive: … This relates to the second problem: a perceived lack of money. Perceiving social security as an investment in the future, rather than a residual cost to be cut, can help address this. In terms of addressing this, I want to focus mostly on something which doesn’t usually receive as much attention as ideology – the spending rules that underpin public service delivery. - Acting earlier is not just better for us as individuals and society but also very likely to cost less. This possibility almost never enters into public spending decisions. Why? Short term – there is no incentive to invest up front in services that might reap benefits in the future – for example in housing, education, or support with mental health problems. The fact that social security spending is accounted for separately – via annually managed expenditure – means there’s very little incentive for departments to invest in programmes which might save social security spending, and vice versa. The overall welfare cap exacerbates this problem. EXPLAIN
- So how can we overcome them? Changes to spending rules could include: Ten year planning/testing Planning: Firm budgets for first five years and renewed on a rolling 3 year basis to allow changes in economy etc. All five year budgets = further five year impact assessment to highlight negative future costs of inaction and +ve value of investments Supported by PAC Testing: Highlight 10 year consequences of cuts to/investment in SS Highlight ten year impact on SS budget of cuts/investment in health, skills, family support etc. Should be audited by OBR Need to better understand links between DEL and AME Improve impact assessments/use of green book Capital spending Incentivises upfront investment ‘one way valve’ - Money can be redirected to EA but not away from it (links to transition plans) – and a separate budget Overcoming silos One way of doing this is to realign incentives locally – e.g. earn-back deals like Manchester Other transitional mechanisms include an EA Loan Fund which could provide interest free loans to public agencies to invest in and thus also bolster proliferation of evidence Reforming the welfare cap Counterproductive – a more useful cap would: Encourage/recognise upfront investment that will reduce demand Distinguish between spend that could be brought down by EA investment elsewhere and spend which contributes to future prosperity Discourage crude reductions in entitlement/generosity as a way to keep costs down in the short term
- 1) Elsewhere in our EATF work, we are seeing how this early action thinking is leading to some new ways of doing policy. As I mentioned in the introduction, we are seeing institutions taking up this approach in some exciting ways (eg Wales Future Generations Bill; Southwark Early Action Commission, etc.) 2) Primary aim of this report to start a conversation about the role and purpose of the social security system that has been lost in the current narrow focus on work and savings. EXPAND 3) This paper sets out an overarching case for applying early action thinking to social security. Alongside partners, we will now start focusing on what this practically means for different Many see the Jobcentre a struggling institution; already some proposals have been made to privatise it. e.g. in-work support, national career service, greater choice for claimants eg good social care providers often let people choose the staff member they’d like to work with. Imagine how that would shake up the Jobcentre. Within Community Links we are starting to put this approach in place by looking at what an early action jobcentre might look like which we plan to publish in the Spring next year. But more broadly, this thinking should open up completely new avenues and extend our thinking about what’s possible in the area of social security. We hope that by trying to focus on the elements set out in Secure and Ready, some of this fresh approaches can be taken in the area of social security too…