What is the best way to change the welfare system?
- 29 Jan
The think tank, Demos, gives a report on the problems with the current welfare system and believes the solution could lie in introducing private companies to the welfare system.
The review on the welfare system highlights the common consensus that too much is spent on out-of-work benefits, and that not enough is achieved with that spending.
The British welfare state is undergoing a period of dramatic reform. While bringing down the overall cost of welfare is politically popular and enjoys a broad consensus among leading policy makers it carries inherent risks.
There are major problems with the UK welfare state that demand solutions:
- Declining support – public support for the benefits status-quo is diminishing and in decline, particularly among the ‘squeezed middle’
- Relatively ungenerous – despite popular opinion to the contrary, the UK’s benefits system is relatively ungenerous when compared with peer economies. This is particularly problematic for wage-dependent families facing unemployment and for families where the primary earner is unable – for reasons of accident or ill-health – to return swiftly to the workforce.
- Too expensive – despite the above, it remains the case that the UK’s total benefits spend (around £111.7bn each year) is unsustainably high and likely to be the target of future spending cuts.
In order to sustain and rebuild public support for a welfare settlement, the Government must find ways of addressing these tensions between generosity, reciprocity and public trust.
Only 28% now believe that the Government should spend more on welfare benefits, compared with over 50% 20 years ago. However, it is clear there are significant disagreements when it comes to deciding how best we can reduce expenditure on benefits while maintaining fairness and providing the opportunities for a return to work where appropriate.
There are a number of important questions for consideration – which should form the backdrop to any effort by policy makers to promote personal financial protection in the UK workforce.
- Should the Government seek to involve the private sector further in meeting welfare needs? This paper lays out some evidence of the need for private sector involvement in welfare – from the expense of the welfare state to the relative lack of generosity of our benefits system and its knock-on impact on living standards and demand. Nonetheless, many remain concerned that further private sector involvement in the welfare state may undermine fundamental principles of state provision.
- Should the Government instead seek to raise state-benefit levels? Can the taxpayer afford a welfare system that continues to be primarily statebased?
- Does the public still want a state-based welfare system?
Despite all three of the main parties agreeing that there needs to be dramatic changes, it is clear there are significant disagreements when it comes to deciding how best we can reduce expenditure on benefits while maintaining fairness and providing the opportunities for a return to work where appropriate.
The Government’s radical approach to welfare reform is focused on merging multiple benefits into a single stream Universal Credit, capping benefit income, reforming disability benefits and changing the way in which individuals are assessed for incapacity. As a programme of change it is both ambitious and dynamic.
But in its efforts to realign the benefits system in general with the moral intuition of the public this programme risks alienating individuals – particularly those in the ‘squeezed middle’ – from the welfare state and creating or exacerbating perverse incentives that punish those who have done ‘the right thing’. For example, these reforms will not end the £16,000 means test, which the Institute for Fiscal Studies describes as a ‘disincentive to saving’.
Many households would simply be unable to survive a period of unemployment and reliance on state benefits while maintaining their living standards under universal credit. Welfare payments are vital not simply to keeping individuals and families afloat in difficult times but also to maintaining demand in the consumer economy by keeping disposable income in the pockets of the unemployed. Significant reductions in benefit levels put at risk the system of ‘automatic stabilisers’, which sustains demand during recessions
There is huge scope to provide a more robust welfare offer for UK workers, built out of a combination of state and private provision. Doing so may involve using the state to encourage mass take-up of protection products by individuals, and facilitation of these products by employers, but the potential benefits are significant and mutual. The Government stands to save considerable expenditure by enabling individuals to lift their unemployment income and reduce their exposure to financial risk.
To increase the generosity of welfare payments across the board would involve massively ramping up the direct cost and financial risk to the Exchequer of unemployment benefits at a time when further cuts are likely to be needed. Only around a quarter of the population agree that such a course is advisable. To privatise the whole of the system – and to remove the state entirely from the welfare equation – is equally unsatisfactory.
To do so would obviously put at risk the level of care that we provide to those who will never, and can never, work. But furthermore, it would seriously risk the financial security of workers in very low-paid employment.
Products such as income protection, which can provide a vital safety net for workers earning average wages and less, are unlikely ever to be reduced in price sufficiently to become the rational choice for those in part-time or short-term work.
- 01 Jul
SCOTLAND AHEAD OF THE UK ON BUILDING NEW HOMES
SNP Housing Minister, Kevin Stewart said the following while commenting on Social Security and Equalities in the Scottish Parliament, SCN reports:"These figures demonstrate Scotland's strong...
- 23 Jun
HEALTHY DIETS FOR CARE HOMES
Joanna Cox, a manager of Chandos Lodge, said:"Food is a huge factor in our residents' lives and we want to ensure the meals we provide not only satisfy their tastes but benefit their health."Healthy...
- 16 Jun
DO HEALTH AND SOCIAL CARE SERVICES NEED INTEGRATION?
Although, many integration initiatives have been introduced across the NHS; For example, vanguard sites to the prime minister's Challenge Fund and integrated care pioneers- many involving GP...
- 15 Jun
LANDLORDS DIVIDED ON HOW TO VOTE IN EU REFERENDUM
The findings show that landlords are evenly split, with 35% intending to vote leave and 35% intending to vote to remain, reports Housing Excellence.According to Richard Lambert, the NLA's Chief...
- 10 Dec
Highest records of working families since 1996
Research has also shown that parents of young children, who were part of a couple, were almost twice as likely to be in a job. In comparison to older mothers, young mothers under 24 were only half as...
- 05 Dec
What percentage of people have mental disorders in the UK?
Percentage of adults suffering from common mental disorders:Prevalence of common mental disorders:Women (19.7%) are significantly more likely to experience common mental health disorders than men...
- 03 Dec
Safe Tweets, safe Twitter
Twitter is one of the most popular platforms where users across the globe collectively contribute 500 million Tweets every day. However, it can sometimes be inevitable that you come across content...
- 17 Jun
Google Creates System to Eradicate Child Abuse Images
Pressure was on the company to do something about the problem after it emerged that men convicted of murdering Tia Sharp, aged 12, and April Jones, aged 5, had been viewing the indecent images online...
- 04 Jun
How Councils Can Improve Home Care
Read the full article at Community Care.Southwark council has agreed in principle to Unison's ethical home care charter and is working with local providers to find out how they could raise pay ...
- 31 May
Man Aged 83 is First Reported Assisted Suicide for Dementia
Reported @ BBC News | Health on 31/5/13He was assessed as mentally competent to make the decision at the centre in Switzerland, as he was only in the first stages of the disease.He did not want to...
Support Solutions 5th National Housing Support & Social Care Conference 2014 Good organisation from beginning to end. Excellent keynote speaker. Relevant and important topics for discussion which were to everyone's advantage within the supported housing sector. B.H - Stevenage Haven