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Advice NI social policy briefing paper in relation to:
Welfare Reform: A welfare state fit for the 21st Century
(An ‘Inside Government’ conference to consider Government’s aim to move people
from being passive recipients of benefits to active job seekers)
July 2008
CONTENTS
Advice NI background Page 1
Conference overview Pages 2 - 6
Advice NI perspective Pages 7 - 14
Advice NI Background
1. Advice NI is a membership organisation that exists to provide leadership,
representation and support for independent advice organisations to facilitate the delivery
of high quality, sustainable advice services. Advice NI exists to provide its members with
the capacity and tools to ensure effective advice services delivery. This includes: advice
and information management systems, funding and planning, quality assurance support,
NVQs in advice and guidance, social policy co-ordination and ICT development.
2. Membership of Advice NI is normally for organisations that provide significant advice
and information services to the public. Advice NI has over 80 member organisations
operating throughout Northern Ireland and providing information and advocacy services
to over 110,000 people each year on over 214,000 enquiries including: social security,
housing, debt, consumer and employment issues. For further information, please visit
www. adviceni.net .
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Conference Overview
3. As part of the Government’s debate on the future of the welfare state, Advice NI was
invited to participate in a conference held at One Great George Street, Central London in
June 2008. In particular debate centred on the health of the population, the cost of ill
health and models of intervention. The event aimed to offer the opportunity to address
key issues including:
How best to utilise the different resources and expertise that the private and
voluntary sectors utilise to ensure that those who need it receive the required
support;
Through long term mentoring, help keep customers in work and progress in their
roles as opposed to return to benefits;
How best to reward organisations that are successful in helping claimants find and
stay in work;
How best to role out local employment partnerships;
Greater personalisation of employment support, ensuring the hardest-to-help are
targeted;
Retain and revise the role of Jobcentre Plus (Jobs & Benefits Offices in NI);
How a higher employment rate can be achieved through partnership with local
communities;
How Pathways to Work can be continued to be rolled out across the country;
How reform to the welfare reform system can help the government eradicate child
poverty;
How addressing the skills deficit can address unemployment and keep people in
work;
4. Introducing the event Lord Archie Kirkwood, former chair of the Work and Pensions
Select Committee, talked about welfare reform to date. Regarding future direction he
highlighted the need for welfare reform to be co-ordinated & integrated with other
government policies; monitored to ensure reforms are appropriate and effective; properly
resourced; and have employer buy-in.
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5. Terry Rooney MP, Chair of the DWP Select Committee, spoke about the target of an
80% employment rate (against a current figure of 75%) and if this target is to be achieved
then people with disabilities, lone parents, people from minority ethnic communities and
the low skilled must be better supported. He outlined that there is a comparable person
from each of these groups in employment and any barriers must be addressed to help
more people move into employment. Mr Rooney also expressed the view that when
employees are notified that they are loosing their job, there should be a process whereby
they can make contact with their Jobs & Benefits Office to be supported to find another
job as soon as possible.
6. From the point of view of government responsibilities Mr Rooney believed that the
issue of sanctions required attention. He outlined that if sanctions were meant to change
claimant’s behaviour, claimants must clearly know why they are being sanctioned and
must clearly be informed as to what steps they need to take to have the sanction removed.
There should also be more flexibility around testing work with greater use of Permitted
Work, a review of earnings disregards and more supportive benefit run-on periods. He
also outlined that government has a duty to address the issue of benefit uptake.
7. The Right Honourable Stephen Timms MP, Minister of State for Employment and
Welfare Reform, spoke about the goal of an 80% employment rate from the present
figure of 75% and the need to open up employment opportunities to those who previously
have missed out on these opportunities.
8. The Minister focused particularly on three areas:
New Deal: more intensive job search requirements, increased expectations on
people who have been on benefit for a long time;
Lone Parents: a goal of 70% employment rate amongst lone parents,
introducing regulations requiring lone parents (depending on the age of the
youngest child) to move from Income Support to Job Seekers Allowance with
associated work seeking responsibilities;
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Pathways and Employment & Support Allowance: greater focus on what a
person can do, not what they cannot do; more help available for people to stay
in work and to return to work more quickly;
9. Mark Lovell Executive Chairman of A4e spoke on the role the private sector can play
in the reform agenda. According to their website1, “A4e is a successful international
business and a market leader in global public service reform. We work with government
and the private and third sectors to design, develop and deliver front line public services
that benefit individuals, organisations and communities.”
10. Mr Lovell spoke about putting customers at the heart of the design process; about
models of engagement in other European countries, including France where there is a
voluntary model of engagement, Germany where there is a family model of engagement
and England where the model is the Pathways to Work programme. Mr Lovell spoke
about the need for partnership, effective services require vibrant diversified supply
chains, mixed portfolio of services focused on client need, commissioning and contract
structures must support demands for delivery, he described a consumer model of services
‘for people’ not ‘to people’, the need for sufficient government investment and for
financial risk to be managed at the top tier and not passed down to service providers. He
finally highlighted that providers would need to be aware of the need to provide value for
money, efficiency and productivity.
11. A view from the advice sector perspective was put forward by Teresa Perchard, Head
of Policy, Citizens Advice. Teresa outlined that people, particularly those who have been
claiming out-of-work benefits for a long period, often lack the confidence to be able to
consider moving into employment; often the staff in Jobcentre Offices do not have the
time to provide the required support; moving from benefits to employment is often
considered a risk because finances are so tight; effective advice services must be in place
to assure claimants that (1) they will be better-off; and (2) ensure that in-work benefits
are put in place swiftly and accurately.
1 http://www.a4e.co.uk/Home.aspx
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12. In terms of integrating welfare reform with Employment and Skills, Ruth Owen
(Jobcentre Plus) and David Cragg / Karen Riley (Learning & Skills Council) spoke about
transforming the welfare state: and supporting people to move from welfare to skills and
employment. Ruth spoke about the need for core skills & employment support that was
available to all, with associated tailored solutions to fit local needs. Karen talked about
the need to conduct skills screening with claimants to ensure that skills could be
developed; matched to job content; and employer needs. The idea of Any job, Better job,
Career (ABC) was raised which appears to be a particularly US concept. David
highlighted the need for alignment with government strategies including investment,
regeneration, housing and health. He also highlighted the need to engage with employers
to ensure that any claimant-support programmes were meeting their needs. The ultimate
aim of all speakers appeared to be sustainable employment leading to career progression.
13. Ann Watt, Deputy Director, Cabinet Office Social Exclusion Taskforce2, spoke about
the challenges in terms of employment relating to people with complex multiple
problems, with no/low skills and no experience. She particularly referred to (1) young
people leaving care, (2) adult offenders, (3) mental health service users and (4) people
with moderate to severe learning disabilities. These categories of people could
additionally include those who are homeless and / or have drug and alcohol addictions.
Ann outlined that compared to the average 75% employment rate across the entire
population, these groups had employment / education / training rates of 63%; 35% 20%
and 10% respectively.
14. Paul Kirk Head of Worklessness, Communities and Local Government, believed that
the introduction of the new Employment & Support Allowance and the rollout of
Pathways was significant. He made the following points:
Monitoring / Quality: the need to be better able to track off-flows from Incapacity Benefit
/ Employment & Support Allowance to ensure people remain in employment and actually
embark on career progression;
2 http://www.cabinetoffice.gov.uk/social_exclusion_task_force.aspx
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Conditionality: greater conditionality may create resistance from claimants and support
groups; greater conditionality in the form of sanctions may cause hardship and may also
force people to accept jobs that are not right for them;
Contracts: government needs to create contracts which will allow for effective delivery;
Health: the health service must be able to react effectively to the needs of claimants with
disabilities; needs to be better integration between health and work agendas;
15. Finally Dame Carol Black, National Director, Health and Work Well Being, provided
a review of the health of Britain’s working age population. She outlined that outflows
from incapacity benefits have fallen by 35% in the last decade and that 30% of children
who have a parent with a disability or health condition live in poverty. She added that if
we are to achieve full employment and reduce child poverty, no discussion on welfare
reform can take place without considering:
• How best to promote health and well-being in the workplace and protect the health of
those in work; and
• How best to support those with health conditions to stay in work or return to work.
16. She spoke about the review which she carried out ‘Working for a healthier
tomorrow’3 which had at it’s heart “a recognition of, and a concern to remedy, the
human, social and economic costs of impaired health and well-being in relation to
working life in Britain”. The overall message from Dame Carol was that work is
generally good for both physical and mental health and well-being; and she outlined 3
key objectives which were:
1. Prevention of illness and promotion of health and wellbeing;
2. Early intervention for those who develop a condition; and
3. An improvement in the health of those out of work
17. Closing the event Lord Kirkwood urged all stakeholders to engage in the welfare
reform debate. He quoted George Bernard Shaw: “Be careful to get what you like, or you
may have to like what you get”.
3 http://www.workingforhealth.gov.uk/Carol-Blacks-Review
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Advice NI perspective
18. Taking up Lord Kirkwood’s challenge, Advice NI would wish to focus more
keenly on government’s responsibilities and ensuring that these responsibilities are
discharged. This can most plainly be illustrated by looking at the issue of
government’s responsibility from the perspective of someone in work and paying
their tax and National Insurance contributions.
19. The government has recently expended much effort in terms of researching,
developing and implementing pathways from welfare-to-work. This has included a wide-
ranging public relations offensive in particular around the achieving the goal of an 80%
employment rate and in particular focusing on vulnerable client groups which may find
themselves furtherest from the labour market. The focus of the welfare reform debate has
clearly been on the personal responsibility of benefit claimants to move into employment
– in particular lone parents and people with disabilities.
20. Advice NI believes that the starting point when government talks about welfare
reform needs to change. There needs to be account taken of the views of people who are
in employment because these may be the very people who are not engaged now, who will
find themselves out of work and who will become very disillusioned with government
and the social security system for not protecting them in their hour of need.
21. Advice NI would wish to highlight that pathways from work-to-welfare must not be
further undermined. People pay National Insurance contributions with the expectation
that should they become unemployed or ill they will be supported by the social security
benefits system – in particular in terms of accessing contribution-based benefits. If the
government tip the balance so far that in effect this support is not forthcoming for people
who find themselves out of work, the question may rightly be asked ‘why should I pay
National Insurance contributions at all?’ Advice NI believes that the time has come for a
debate on the issue of National Insurance contributions; the extent to which these
contributions allow access to social security benefits; the extent to which this access has
diminished over time / will diminish in the future; & the role and cost of private
insurance packages which are in effect replacing this support.
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22. From the perspective of people who are in receipt of benefits, government has
very clearly put forward a rights and responsibilities agenda4. Again Advice NI
would challenge government to do more to meet it’s responsibilities towards those
on benefits.
23. In respect of benefit claimants, areas where government responsibilities have not been
adequately discharged include:
Benefit uprating: in respect of the Income Support Personal Allowance (aged 25 or
over) the increase in 2008/9 was from £59.15 to £60.50 representing an increase of £1.35
which is 2.28%.
Benefit uptake: the extent to which people are not receiving the support they are entitled
to needs to be addressed. For example in Northern Ireland take-up of Pension Credit is
considered to be as low as 49% by caseload and 60% by expenditure.
Earnings disregards: the earnings disregard for a single person (£5) has remained
unchanged since the introduction of Income Support in April 1988. The disregard has
now become less than the National Minimum Wage hourly rate which currently stands at
£5.52 an hour. This in no way incentivises claimants to move into paid employment.
ESA & permitted work: the differential treatment of those claiming contribution-based
and means-tested Employment & Support Allowance in relation to earnings. It appears
that relatively generous earnings disregards for contribution-based ESA do not apply to
means-tested ESA. As well as being confusing for ESA claimants and staff alike, this
differential treatment effectively discourages means-tested ESA claimants from engaging
in paid employment.
Benefit run-on: the transition from benefits into paid employment acts as a disincentive
for claimants. More financial support could be provided: which in effect could empower
claimants to themselves proactively seek to work. This could be funded from monies
which otherwise would have gone to government agents to provide back-to-work support.
Better off in work: other incentives should be considered including the extension of Free
School Meals provision which will help government meet it’s goal of trying to ensure
parents move into work; and improved support with housing costs which is a key
consideration for people moving from benefits to work.
4 http://www.dwp.gov.uk/welfarereform/readyforwork
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National Minimum Wage: the NMW should become a National Living Wage which
again would encourage people to take that first step into paid employment. In respect of
the NMW uprating, in October it will increase from £5.52 to £5.73 an increase of 3.8%.
Childcare: there is a distinct lack of accessible, affordable childcare, particularly as
regards Northern Ireland. In addition no government department here has lead
responsibility for childcare and there is no strategy in place to deliver accessible,
affordable childcare in the foreseeable future.
Education / training / volunteering: the focus of moving people from benefits into paid
employment has left many people feeling sceptical about the motives behind welfare
reform – more about a numbers game rather than seriously tackling heath and well-being
issues. Given that many people within vulnerable client groups are furtherest from the
labour market, government needs to be realistic and understand that many will have a life
changing journey to make before they are ready to move into paid employment.
Social fund: the provision of lump sum payments via the social fund should be reviewed
and broadened to encompass support for low waged households.
Cross departmental support: government still tends to operate within silos which
negatively impacts on the support that can be given. For example intense activation
activity within the benefits field may run in parallel with lengthy waiting lists and delays
in treatment within the health field.
24. Advice NI asked the following questions at the event: (1) given that welfare
reforms are now targeted at the more vulnerable within our society, is there enough
recognition that these people have a journey to make; that they are furtherest from
the labour market; that they are the least attractive to employers; that they may
need to take part in up-skilling, further education, training, volunteering permitted
work, part-time work before getting to the stage where full time paid employment
might be a possibility? & (2) given the research that expresses the view that work is
generally good for you, how fit do you have to be to be considered fit for work;
where is the tipping point from being unfit for work / work being detrimental to
your health as opposed to being fit for work / work being beneficial to your health?
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25. As expected the answers were non-committal and perhaps underlined that when the
surface is scratched the issue is not as straightforward as may first appear. In respect of
(1) the response was that employment is the end goal and in fact government does not
want to incentivise any activity other than moving claimants off benefits and into
employment. This disheartening response perhaps underscores the view of the sceptic
that number counting rather than tailored support is the order of the day. This is perhaps
further evidenced by the stated policy objective of reducing the number of people on
incapacity benefits by one million from 2005 levels [Ready for work: full employment in
our generation (Dec 2007].
26. In answer to (2) it was agreed by Dame Carol that work is not the best place for
everyone; that decisions have to be taken on a case by case basis; that it is difficult to
generalise and that it is not about lumping people all together. This again demonstrates
how coming at the issue of welfare reform from a different perspective leads to responses
which are diametrically opposite to initial headline comments.
27. It is the view of Advice NI that there is always a balance to be struck between
encouraging families in receipt of social security benefits to move into paid
employment and providing adequate support for families while they are in receipt
of benefits. In our view the government has taken a predominantly ‘work focused’
approach, concentrating primarily on ‘making work pay’ and using employment as
the principal means of tackling child poverty. However, in taking this approach,
there is a concern that families on benefits are being left behind and marginalised.
In general terms, just as government would urge those on benefits not to have a
phobia about working, Advice NI believes that Government itself should not have a
phobia about seeking to improve the quality of life for those people and children
reliant on benefits.
28. Benefits sanctions, for example regarding a failure to carry out a job seeker’s
direction, impacts upon the whole family and there needs to be a balance between
‘encouraging’ people to move into employment and ensuring that these same people are
adequately supported while on benefit. Previous Advice NI Social Policy Papers (‘New
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Deal for Disabled People’; ‘The Contributory Principle – On the Agenda or in the Firing
Line’ and ‘Welfare Reform: Challenges, Choices and International Insight’ available on
www.adviceni.net) indicate that the focus may be too heavily weighted in favour of
moving people off benefits rather than firstly ensuring that people are adequately
provided for on benefit. In our previous Welfare Reform paper we highlighted the plight
of so-called floundering families in the USA:
“Welfare reform was successful because the US economy was good and because in-work
supports – child care and health insurance – helped make work pay. With the downturn
in the economy, problems with the US approach were highlighted as being the difficulty
for welfare recipients to secure continuous employment (often a focus on ‘take the first
job’ and not the ‘best job match’). There was also a very significant issue related to
‘floundering families’ – with a significant increase in single mother households without
work and without access to welfare (number has almost doubled since 1990).”
29. In terms of people with disabilities, Advice NI notes the analysis of the impact of
Pathways5 as highlighted in the report ‘The impact of Pathways to Work’ which
focuses on the overall impact of Pathways on employment, earnings, receipt of
incapacity benefits, and a potential indicator of the extent to which individuals'
health affects their everyday activities.
30. Whilst generally positive about the impact of Pathways it should be noted that the
report highlights that Pathways had little effect on the employment or self-reported health
condition of people suffering from mental illness. Given that people with mental illness
account for over 40% of the Incapacity Benefit caseload, Advice NI remains concerned
that a suitable form of support has not been developed to meet the needs of this particular
client group. In the push to remove claimants from benefit, we would remain concerned
that people with mental illness may find themselves in the position of being removed
from benefit and / or placed in employment; a position which may do nothing to improve
their health and well being.
5 http://www.dwp.gov.uk/asd/asd5/rports2007-2008/rrep435.pdf
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31. Dame Carol also highlights a ‘consensus statement’6 from leaders of the healthcare
profession which supports the view that healthcare providers should be doing all they can
to help people enter, stay in or return to work. Again the fine print of the statement
clarifies that:
“Work which is appropriate to an individual’s knowledge, skills and circumstances and
undertaken in a safe, healthy and supportive working environment, promotes good
physical and mental health, helps to prevent ill health and can play an active part in
helping people recover from illness.”
The key word in the statement is “appropriate” and again Advice NI would be concerned
that decisions as regards entitlement to benefit, fitness for work and taking up
employment may be overly concerned with simple head count considerations rather than
providing tailored support which is appropriate to meet the needs in each individual case.
32. Finally on the question of ‘is work good for your health and well-being?’ Advice NI
notes the report7 with the same title which interestingly makes the point that:
“There is also growing awareness that (long-term) Worklessness is harmful to physical
and mental health, so the corollary might be assumed – that work is beneficial for health.
However, that does not necessarily follow.”
33. The report highlights a number of issues including: employment is generally the most
important means of obtaining adequate economic resources; work meets important
psychosocial needs in societies where employment is the norm; there is a strong association
between worklessness and poor health; there is strong evidence that re-employment leads
to improved self-esteem, improved general and mental health, and reduced psychological
distress and minor psychiatric morbidity; claimants who move off benefits and (re)-enter
work generally experience improvements in income, socio-economic status, mental and
general health, and well-being.
6 http://www.workingforhealth.gov.uk/documents/healthcare-professionals-consensus-statement-4-march-2008.pdf 7 http://www.workingforhealth.gov.uk/documents/is-work-good-for-you.pdf
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34. Whilst the report does conclude that “work is generally good for health and well-
being”, it makes a number of provisos to this statement:
These findings are about average or group effects and should apply to most
people to a greater or lesser extent; however, a minority of people may experience
contrary health effects from work(lessness);
Beneficial health effects depend on the nature and quality of work (though there is
insufficient evidence to define the physical and psychosocial characteristics of
jobs and workplaces that are ‘good’ for health);
The social context must be taken into account, particularly social gradients in
health and regional deprivation.
Again Advice NI would draw attention to the journey that many will have to make before
being work-ready. We would like to see a continued focus on different elements of this
journey including ‘is volunteering good for your health and well-being’; ‘is education and
training good for your health and well-being’; ‘is part-time work good for your health and
well-being’. Advice NI will continue to advocate on behalf of those people for whom the
transition from benefits to work may not be a straightforward process. We will try to
ensure that the needs and views of this section of the population are heard despite the
rhetoric and sweeping statements to the effect that work is good for everyone – the
evidence appears to suggest that appropriate work can be beneficial with decisions to be
made on a case by case basis. This is not such a good sound-bite but it does perhaps
more accurately reflect the situation.
35. In conclusion, Advice NI note that commentators are predicting the first signs of
recession in Britain. A slowdown in the British economy with associated job looses must
be factored into the welfare reform equation. As highlighted above:
“There needs to be account taken of the views of people who are in employment because
these may be the very people who are not engaged now, who will find themselves out of
work and who will become very disillusioned with government and the social security
system for not supporting them in their hour of need.”
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36. Advice NI is keen to stay involved in the welfare reform debate and would be keen to
be kept informed of developments.
Contact information on this Social Policy Briefing Paper:
Bob Stronge (Director)
Fiona Magee (Deputy Director)
Kevin Higgins (Head of Policy)
Advice NI
1 Rushfield Avenue
Belfast
BT7 3FP
Tel: 028 9064 5919
Fax: 028 9049 2313
Email: [email protected]
Website: www.adviceni.net
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