Wednesday, 25 January 2012

Welfare Reform 2.0 - where will the Coalition go next?

As the Welfare Reform Bill goes through the Lords (with difficulty), it might seem premature to consider where the Coalition goes next on welfare.  The Bill contains so many deep reforms and has encountered so many problems that many people probably aren't considering what comes next.

But it is highly likely that stronger and deeper reform will come.  The Coalition know they're on to a vote winner with welfare; for many complex reasons, the public have turned on the welfare state and, in particular, the benefits system.  Welfare reform will be a key area - if not the key area - fought over during the run-up to 2015 and the Coalition will be desperate to prove they've been radical.

This means that after the Welfare Reform Bill is finally passed, the Coalition will start to think how they go about a second phase of welfare reform.  After all, the clue is the name; 'welfare reform' suggests a narrative of ongoing, relentless change and this is precisely what the government will be keen to show.

So what might we expect during this second phase of policy, or Welfare Reform 2.0?  This is just guesswork, but we can get some clues from the direction of travel in the US, who are about 15 years ahead (or behind, if you think - like I do - that these are neanderthal reforms) of us on welfare reform.  Here are some predictions (and definitely not recommendations) about what might happen next:
  • Intensified workfare.  Workfare (or work-for-your benefit schemes) are already increasing in use, as stories such as Cait Reilly's demonstrate.  But I think we'll see them rolled out even more over the next few years, to increasing jumpers of JSA claimants and at an earlier stage of the claim.  Why?  For the two reasons most welfare reforms are introduced: to cut expenditure (by discouraging people from claiming benefits) and to shame the unemployed (because the public like this kind of thing).
  • Time-limited benefits.  Time-limiting is already a feature of the welfare state, but this is mostly applied to the contributory components of benefits like ESA and JSA.  I think we might see time-limits introduced to means-tested benefits, such as - for example - a 12 month limit to any claim to JSA.
  • The abolition of contributions-based benefits.  It also wouldn't surprise me to see the abolition of the contributory element to JSA and ESA considered, thereby placing all claimants within a system of means-testing.  The contributory principle is already very weak in the UK relative to other countries and has been chipped away at for decades.  
  • Regionalising benefits.  This idea has been brought up by James Kirkup in the Telegraph and has apparently been referred to by Iain Duncan Smith.  This would involve giving people lower benefits if they live in 'low-cost' parts of the country (presumably old industrial areas in south Wales, Scotland, the north-east and the north-west).
  • Limited child benefits and tax credits. The Coalition are already proposing removing Child Benefit from higher earners, but there has been much debate over the past year about large families and whether it is right for the state to support such families.  It's an increasingly populist view that the state should not and it would undoubtedly please many if benefits were limited to a first or second child.
These are just some of the reforms which the Coalition might be considering: in reality they might not pursue any.  But those who want to defend the welfare state must not be complacent in the thought that the government will stop with the Welfare Reform Bill.  They will seek to go further, and they must be challenged.

Tuesday, 24 January 2012

Is evidence-based policy a load of crap?

In a book I'm reading for the LSE Politics and Policy Blog - Personalising Public Services - the author Catherine Needham argues that despite the rhetoric about 'evidence-based policy-making', governments in reality construct and implement policies by 'telling stories' to the electorate:

"Formal evaluative data remains important, as might be expected in an era in which ministers demand 'evidence-based policy'.  However, when compelling findings have proved somewhat elusive - appeals to common sense and/or resonant stories are deployed to fill the gap" (p. 55).

I thought about this (for about 5 minutes) and come to the conclusion (perhaps cynically) that most of the time this is what politicians are doing.  They evade and manipulate questions of evidence: they celebrate research that supports their aims and rubbish research that doesn't.  Thus even when evidence is used in the policy-making process it doesn't form central stage: it becomes part of a wider, theatrical production in which a certain political strategy is put on show.

No where is this clearer than with welfare reform, which is not about evidence at all.  Welfare reform is a grand narrative starring the workshy scrounger and the hardworking taxpayer.  It is played out as soap opera, in which the scrounger has the upper hand but where the taxpayer is fighting back.  As with all soap opera the realities of people's lives and experiences are ignored in favour of a simplistic, dramatic and ultimately false dramatisation of the real-life protagonists.

It'd be nice to think that our politicians were old enough and mature enough to do policy differently than 'telling a story'.  But they're not.  Instead we have a political elite obsessed with crafting lies and creating villains.  They don't seem to realise that this fiction is a reality for those they cast in the leading roles.

Trouble ahead for Cameron's Work Programme

Every week at PMQs, in response to the many questions he receives about unemployment and welfare, David Cameron consistently refers to the implementation of the Work Programme - the Coalition's replacement welfare-to-work scheme for the unemployed - as the means by which the country's labour market problems will be solved.

Cameron does this so frequently that last week I asked on Twitter what evidence does he have - if any - that the Work Programme is working and, if there is any evidence, is he sharing it?  After some rooting I found that there is an official evaluation of the Work Programme by CESI, but that we won't see qualitative evidence on its success for another six months, and the statistical analyses won't come until next Winter.

In a time of increasing unemployment and huge welfare changes, it is surely too long to wait until next Winter to get some hard facts about whether the Government's landmark scheme is actually having any effect.  However, some early evidence on its impact comes here, from the National Audit Office, and the signs aren't good for Mr Cameron.

Although praising the Work Programme's central feature of 'payment-by-results', the NAO highlighted the following problems:

  • 14% fewer over-25s would get jobs compared with official estimates.
  • Programme providers run the risk of getting into 'serious financial difficulty' due to the ambitious targets built into the system.
  • The 'harder to help' category (previous IB claimants) are getting less support than expected.
  • The absence of a proper evaluation study now was a cause for concern.
The NAO also said it was a concern that no alternatives to the Work Programme had been considered.  What this represents is David Cameron's quasi-fundamentalist belief - on display every Wednesday at PMQs - that the Work Programme is a panacea for all sorts of problems.  However, as those of us who study welfare-to-work understand, the effect of such schemes is often modest and dependent upon buoyant labour market conditions.  

If Ed Miliband has any sense, he will make the NAO's report the centrepiece of his questioning to the Prime Minister tomorrow.  Coalition ministers consistently celebrate the Work Programme as their central strategy to defeat high unemployment.  Yet the early evidence from the NAO is that it is far from the panacea it is heralded as.  While it's still early days, it's time the Government thought of new approaches to welfare-to-work as the labour market plummets.  It is up to Labour to hold them to account.

Monday, 23 January 2012

The benefits cap is all about morality, with a nonchalant regard for the consequences

Today's debates about the Government's proposed benefit cap have been unusual in the context of welfare reform.  Few numbers have been throw about, there is little talk about policy objectives and whether the cap will boost employment seems at best a side issue.

Instead, the policy is all about morality and, more specifically, about what is fair and what is unfair.  According to the Coalition - and, seemingly, the 75% of the public who agree with them - it is only fair to cap the total amount of benefits an out-of-work household can claim at the same level as median earnings.  If you can take in more through benefits than you can through the average income then, according to this logic, there is something deeply wrong with the welfare state.

Putting aside whether this a morally justifiable position to take, perhaps the most worrying feature of the debate has been the complete sidelining of the likely effects and outcomes of the policy.  The consequences of the cap will be horrific for those affected (just a few are outlined here by the Guardian).  Yet in debate after debate these issues - from child poverty to homelessness - are brushed aside with remarkable nonchalance.  What matters - and only matters, it seems - is justice for the taxpayer.

You can't take morality and justice out of social policy.  But equally, you can't and shouldn't take out evidence.  In debating the benefit cap the Government and its many supporters are doing precisely the latter.  The social and economic fall-outs from the cap have become secondary to notions of justice, and those who are seeking justice care little for the condemned.

Policy-making should always be about combining your politics with the evidence.  People on the left have  often wrestled with this dual concern: as the desire to seek economic justice has often clashed with the need for economic efficiency to fund the goals of social democracy.  Yet politicians can sometimes find themselves in a dangerous comfort zone: when the public are on their side they can resort to political manoeuvres with little regard of the consequences.  This is where the Conservatives find themselves today on welfare; the limits on how far they will go are unknown and, at this point in time, deeply unsettling for those who care about the welfare state.

Tuesday, 3 January 2012

Three things we learned about Labour's welfare policy from Liam Byrne's Guardian article

Today Liam Byrne – the shadow Work and Pensions secretary – has written an article for the Guardian which, as is usual with these kind of things, attempts to ‘rewrite’ Beveridge for the 21st century (people have been trying to rewrite Beveridge since his report was produced). 

The report has caused the usual storm amongst Labour supporters on Twitter.  Many on the left are criticising Byrne’s ‘hardline’ or ‘reactionary’ stance on welfare, in what they see as pandering to the Coalition.  Those on the right of Labour are supporting Byrne’s defence of a ‘fair deal’ on welfare for ‘hardworking taxpayers’.  Others are just a little nonplussed and see nothing new or fresh in Byrne’s article.

In my view though, there are important things to be taken from what Byrne says.  As is the case with most political strategies, Labour is trying to do two things with its welfare policy.  First, show common ground with its opponents (in order to look moderate).  Second, let voters know what it would do differently (in order to be worth voting for).  In this context, it’s possible to take three messages from Byrne’s article in terms of what Labour might offer the electorate on welfare in 2015.

First, Labour is unequivocally in favour of welfare conditionality.  This might not come as a surprise to most of us, but conditional benefits were once (and probably still are for some) a controversial policy area for many on the left.  Today, I think you’d be hard pushed to find any Labour politician come out in favour of an unconditional, social rights approach to welfare as associated with T.H. Marshall.  Why is this the case?  The answer is probably complex, but we know via important research from the British Social Attitudes series that the public are very much in favour of welfare conditionality; to advocate otherwise would be political suicide.  On conditionality then, Labour is at one with the Government.

However, Labour is also keen to differentiate itself from the Coalition on welfare, and this necessity leads to messages two and three.  Firstly then, Labour would do more in power to create jobs.  Perhaps for a mix of ideological and economic constraints, the Coalition is not keen on government action to create jobs; where it is sort of attempting this, it is through incentives for the private sector rather than direct state job creation.  Labour has less of a problem in using the levers of government in this way, and so Byrne argues for a ‘responsible government taking determined action to create work’.  It is likely therefore that Labour will advocate reinstating something similar to its Future Jobs Fund, scrapped by the Coalition upon coming to power.

The second difference on welfare between the Coalition and Labour is, potentially, much more radical, and is something Byrne alludes to quite strongly in his article.  This is the strengthening of the contributory principle in the welfare state or, as Byrne describes it, a ‘something for something’ approach.  Beveridge was a strong advocate for social insurance yet his visions for a contributory welfare state were only weakly implemented and have, over successive decades, been consistently diluted by both Labour and Conservative governments.  Byrne suggests that Labour – if elected – would give people who had contributed to the system much more back in return.  He is not too specific (he ignores, for example, whether this would apply to benefits such as JSA or the State Pension) but this would necessitate a radical shake-up of existing welfare relations and is clearly not in the plans of the Coalition government.

So although Labour supports the Government on its tough approach to welfare conditionality, the party is attempting to draw two dividing lines: on the scale of support the state offers to out-of-work claimants and on how government rewards people through the welfare state.  This is a start for Labour after struggling to compete with the Coalition on welfare and there is still much work to be done on specific policy details.  But it could – just could – be the beginning of a serious and potentially radical renewal of Labour’s often troubled recent relationship with the welfare state.