The Government’s Vision for Welfare Reform

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In a speech to the Centre for Social Justice, Iain Duncan Smith reinforced his ambitions for the welfare state and the role it ought to play in our society.

At its heart was the idea that there needs to be a shift in the way that we approach and engage with issues of welfare, and this shift is epitomised by the ambition behind Universal Credit.

The Secretary of State argued that the complexity of the current system itself has not only been a barrier to work, but has also promoted a ‘quick-fix’ approach to the issues of worklessness and poverty. Universal Credit is intended to achieve a behavioural transition away from this approach, and deliver benefits year-on-year through a simplified system.

Simplification of the current system to Universal Credit will:

  • Promote independence by providing opportunities to make informed and positive choices;
  • Encourage effective communication between individuals and government
  • Ensure that you are better off in work.

Promote independence

Allowing individuals control over their own budgeting through direct payments is a good thing. The State still has a responsibility to ensure that there is sufficient support for those who struggle, but we should not shy away from giving people autonomy and helping to develop a culture of independence that will benefit people in the long run.

Encourage effective communication

A simple system helps both those who claim benefits and those who work in frontline services. The current system’s complexity creates a barrier to communication, and understanding. Conveying information clearly and simply allows individuals to make informed decisions.

Better off in work

This is the guiding principal behind Universal Credit. Moving into work should never make you worse off. Universal Credit will not only smooth the transition into work, but also incentivise people to take on more hours by removing the cliff-edges of hours rules in tax-credits.

This speech outlines the Secretary of State’s vision for the welfare system. A system that provides individuals with real opportunities, with welfare that is positive, aspirational, and a force for good in people’s lives.

This message goes beyond Universal Credit as a solution to tackle worklessness, and talks about a wider culture change within what he argues is currently a broken and dispirited system. The new system will have a culture that promotes independence, whilst providing an effective safety net for those that need it.

Lord_freudMinister for Welfare Reform

Lord Freud also gave a speech in the same vein, which gave both a vision of where welfare reforms are heading and reflected on the results that we are already seeing.

Its main thrust was the idea of empowerment, creating a structural framework that gives control back to individuals. This may be financial or simply giving people a sense of independence and pride. It advocated a need to move away from a system that “penalised” people and discouraged work, and suggested that we are starting to see positive results.

The main factors driving this push to empowerment are:

  • Universal Credit – A more responsive system that ensures claimants are better off in work than on benefits and provides an incentive to work more hours. Early indications suggest claimants are spending twice as long looking for a job.
  • Local Support Services Framework – Helping individuals through the process of transferring onto Universal Credit and providing longer-term support to help those who are struggling to “progress towards independence”. The LSSF report can be found here, examples include Lewisham’s triage process or Bath & NE Somerset’s one-stop-shop.
  • Direct Payments – Allowing claimants to take control of their budgeting and developing important skills that will help them in other aspects of their lives. Local Demonstration Projects revealed an average rent collection rate of 94%. The increased personal responsibility and closer interaction with tenants also helped to identify other areas where people need support.

Lord Freud acknowledged the importance and positive results of these local pilots. He also suggested that a fall in the number of people on inactive benefits of around 400,000 was encouraging but said that more still needs to be done.

The driving motivation in this speech and in Lord Freud’s vision for Welfare Reform more generally was that it is not enough to just hand control to individuals, but that we have to ensure this empowerment is sustainable.

Both speeches reinforce the need for effective engagement and communication, supported by structural reform. But they also highlight the inherent challenges involved in transforming what is such a complex system: Identifying potential problems and promoting good practice may be a long process, and this is where Policy in Practice work to make a difference. 

Universal Credit does not provide all the answers, and a large part of its success will depend on how it is perceived by those who use it. However, it does have cross party support, which will help to ensure that any positive impacts are sustained into the future.

You can watch Iain Duncan Smith’s speech to the CSJ below:

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