Labour's plans could destroy the welfare state, not save it

For some years now, social democrats have faced a 'crisis of the welfare state'.  This is the dilemma of how to defend and protect social security when public confidence in the system is drained.  So far, little progress has been made.  The Tories are rampant: just like the NHS is natural Labour terrain, the welfare state has become a conservative issue.

Under Ed Miliband, there have been relatively few concrete proposals aimed to address the criss of the welfare state.  The most important has been a job guarantee for long-term and young unemployed people: an offer that says 'we will provide you with work, otherwise you will lose your benefits'.

Today however marks a significant shift in Labour's welfare offer to voters.  According to the Guardian, Ed Miliband will announce two key changes in a speech today.  First, Jobseeker's Allowance (JSA) will be abolished for the 70 per cent of unemployed 18-21 year-olds who are currently low-skilled.  Instead, it will be replaced by a much more targeted (and seemingly less generous) benefit that is tied to training.  Second, more people will be subjected to means-tested JSA as eligibility for insurance-based JSA rises to five-years of National Insurance contributions from two years.

Purportedly, Labour's proposals are designed to mollify public distrust towards the welfare state and its perceived lack of fairness and reciprocity.  However, many people have long been studying the causes of increasingly hostile attitudes towards welfare in the UK.  And within these findings, two ideas have emerged that suggest Labour's proposals could have the opposite effect.

The first is that distrust of welfare is linked to the decline of the contributory principle.  After decades of increased means-testing and targeting, many people feel they get little from the state in return for their contributions.  This is the problem of getting 'nothing-for-something', not 'something-for-nothing'. Bizarrely, the spin from Labour appears to suggest that further shrinking the pool of people eligible for insurance-based JSA is a strengthening of the contributory principle.  This is a strange and misguided logic: the contributory principle would be strengthened by an expansion, not contraction, of its practical application.

The second determinant of transformed attitudes is the changing views of young people.  In a recent article, I argued that the most dramatic demographic shifts in welfare attitudes had occurred amongst the young.  Twenty years ago, young people were the most 'pro-welfare' group by age, now they are the most 'anti-welfare'.  The causes are complex and disputed - but it is highly unlikely that further restricting young people's access to out-of-work benefits will renew the bonds between Generation Y and the welfare state.

A good start for Labour would have been to expand the contributory principle, not further target it, whilst explicitly focusing on supporting young people, rather than restricting access to social security.  If the causes of such deep, attitudinal change in the UK are indeed linked to the decline of the contributory principle and the changing views of young people, today's proposals by Labour could end up having the complete opposite effect.  They could end up further destroying Britain's welfare state, not saving it.

There are better ways of helping long-term unemployed than punitive Help to Work

Originally published on The Conversation and written with Adam Coutts

There is now another slide in the UK towards American-style “workfare” programmes aimed at getting the unemployed back to work as quickly as possible. The evidence showing that workfare programmes actually work is mixed to say the least.

Under new rules, the long-term unemployed will face one of three options: daily meetings with Jobcentre advisers, six months' unpaid “voluntary” work or more rigorous training and support. There is of course a fourth option, one that explains why the reforms are so controversial: benefit sanctions.

The introduction of yet another layer of sanctions has reignited fierce debates about welfare reform. Is it fair to threaten people with destitution to get them into work? Do workfare placements take jobs out of the real labour market? And are there now similarities in the way we treat the unemployed and the way we treat criminals?

The evidence

But another key question is whether or not such programmes actually achieve what they set out to do. Fortunately for those interested in evidence-based policy, the DWP has conducted a large-scale pilot evaluation of Help to Work.

In fact, the evaluation was a randomised control trial: the “gold standard” in evidence-based policy. The first set of outcomes the DWP was interested in was the effect of Help to Work on employment trajectories and benefit receipt. In the initial report on the scheme, the researchers found no evidence of a statistically significant impact of Help to Work on re-employment.

The latest report – which had the advantage of a longer tracking period of two years – was barely more positive.

As Jonathan Portes has explained, there continues to be no effect of Help-to-Work on re-employment, although participants did spend less time on benefits over the two years compared to the control group. These are, to put it generously, modest achievements.

Health and welfare

As well as looking at labour market outcomes, the Help to Work pilot also examined the impact on participants’ well-being. In what has been a controversial and much debated agenda, the incorporation of well-being into policy has been significantly advanced by the current coalition government.

Health and well-being are hugely important factors in the context of unemployment and the transition to work. Decades of research has shown the deleterious impact that being unemployed has on mental health and happiness as well as affecting how long someone remains unemployed.

In recent years, we have argued that labour market programmes can improve the health and well-being of unemployed people. This is because they act as a supportive step in which unemployed people gain access to some of the benefits of paid work such as daily structure, social contact and a sense of purpose.

The evidence suggests that programmes which provide a supportive training environment, constructive work experience and tackle the wider problems that people have such as mental health issues, participants may gain a stronger sense of hope and self-efficacy: the belief that they themselves can get a job. Participation in these programmes have also been linked to reduced levels of depression and suicide rates.

In the initial evaluation of Help to Work, the researchers tested whether receiving intensified advice or participating on community projects raised the well-being of participants. Importantly, they found evidence of a barely minimal impact. Compared to the usual system of support, participants were no more likely to report higher life satisfaction, life worth or feelings of happiness, although participants on the community projects reported feeling less anxious.

Unfortunately, this evidence appears to have been ignored and consideration of health and well-being as important outcomes of policy has been abandoned.

A hard balance to strike

Should we be surprised that Help-to-Work will have little effect? Perhaps not. The international evidence on “active labour market programmes” – summarised by the DWP – shows they are hard to get right. There is little evidence, for example, that compulsory work activities are effective in boosting employment returns. Perhaps most importantly for Help-to-Work, this is especially the case for the most disadvantaged out-of-work groups.

But this does not mean that back-to-work schemes are always ineffective. The Future Jobs Fund – before being scrapped by the current government – was a surprising success story. The message is that training schemes must appropriately “fit” those they are trying to help, as well as being designed with particular local labour market conditions in mind. It is very hard to get a job where there are no jobs in the local labour market.

The question we must ask is whether the exceptionally modest effects of Help-to-Work programme justifies its expansion. And this is not just in economic costs, but in well-being ones as well. The use of pure and punitive workfare measures and sanctions may well increase instances of debt, food bank use, depression and ill health among those it is intended to help.

We need to seriously consider whether there are more effective – and less dehumanising and stigmatising – ways of helping the long-term unemployed. In areas where there are no jobs to go into could government policies such as back to work programmes be used to protect and promote the wellbeing of unemployed people during difficult economic times rather than make it worse?

We also have to look elsewhere for examples of how labour market programmes can be designed such as Scandinavia and Europe rather than continuously following the US work-first approach. Finland’s Työhön Job Search Training Programme is such an example which has been found to have both positive effects for the labour market and programme participants.

Finally is long-term unemployment really a problem because claimants see an adviser just once a fortnight? Or, alternatively, is long-term unemployment linked to more structural issues of labour demand, regional inequalities and ill health? Programmes such as Help-to-Work should be based on robust evidence about how to move people into the labour market: and, perhaps more importantly, on the reality of why people remain out of work.