Welfare Reform Bill: Wise Group comment

The Welfare Reform Bill places an appropriate emphasis on capability rather than disability and signals an important cultural and political shift in attitudes to people with disability or long-term illness.

The Wise Group has worked with incapacity benefit recipients via the New Deal for Disabled People programme (branded as Workable) for the last five years, and over this time has helped 3012 people (53% of registrations) to move into employment through this programme.  

An individualised approach will be the most crucial element of successful welfare reform – and the reform agenda will stand or fall on the quality of assessment, guidance and support given to each individual. Incapacity benefits cover a range of distinct and complex conditions, and the differences between and within these must be acknowledged.

It is critical to recognise that workless and unemployed people have overlapping needs - although the groups focused on by the bill are primarily out of work because of a specific situation (health or disability) they will also face a number of other barriers to work that must be addressed through a holistic programme of support.

There is a clear link between benefit dependency and wider disadvantage – and the role that organisations like the Wise Group play in trying to address these simultaneously is crucial. Welfare reform can impact on wider communities and the reform agenda can be linked to the wider regeneration of communities through activity such as the Intermediate Labour Market (ILM) model. The ILM provides unemployed people with paid work experience placements delivering socially useful services such as environmental regeneration, home safety and security, energy efficiency and childcare and as a model could be used to maximise the impact of welfare reform.

There are also a number of infrastructural barriers inherent within our benefits, taxation and services systems that make labour market entry difficult for the most disadvantaged groups. Those moving into work after a prolonged absence from the labour market face increased costs when moving into employment, for example, requirements for new clothing, equipment, transport etc, and these are often compounded by a significant income gap if moving from weekly to monthly payments.

On top of this Housing and Council tax benefits are removed shortly after an individual moves into work, further reducing disposable income.  Also many debts that were not pursued whilst an individual was unemployed are actively pursued once he or she moves into employment, placing even greater financial pressures on the individual.

A number of measures could be taken to tackle some of these difficulties and to provide greater incentives for jobless individuals to consider labour market entry.

 These could include the payment of an in-work credit, linked to skills acquisition; the provision of flexible funds to deal with financial crises within the first few months in a job; the extension of council and housing tax ‘run ons’ post employment; greater flexibility amongst public authorities with regards to debt repayments; and the provision of freely available financial advice resource at a national level specifically targeted at people on low to moderate incomes). There is also a need for clearer communication of the measures available within the existing incentives structure.

The city strategies that are currently at the development stage and due to be implemented from April 2007 present opportunities for some areas to demonstrate the benefits that can be gained through greater flexibilities within benefits and other systems.  The government should ensure the strategies are properly monitored so that the lessons learned can be shared about what has worked and not worked and quickly replicated elsewhere in the UK.

A greater focus on the sustainability of disadvantaged employees in the labour market is absolutely critical if the government’s aspiration of an 80% employment rate is to be achieved. Too many individuals circulate between low pay/no pay, moving in and out of the insecure end of the labour market, and as highlighted by the Harker report, low pay is a significant contributor to child poverty across the UK. Positive action is needed to ensure that disadvantaged individuals not only move into and keep a job but also are given support and incentives to progress into more secure, higher skilled and better paid positions.

In order to provide this kind of intensive and individualised support providers of employment and related services such as Pathways to Work must be given freedom and flexibility to provide a route to employment that is designed for each individual. The programme should also provide a clear framework that requires common standards of provision to ensure that all clients receive a guaranteed basic quality of experience. Although an outcome-based approach can motivate providers positively, there is a need for a basic framework of standards to be applied, to protect against the worst excesses of the profit motive.

Outcome based payments for programmes such as Pathways to Work must take into account distance travelled and the particular labour market conditions in which each provider operates. The needs and abilities of each individual client will vary greatly – some will require ‘light touch’ support over a short period before re-entering the labour market whilst others will require a longer period of more intensive training and support. The Pathways to Work payment regime should focus on outcomes rather than targets, and recognise when providers are working with the most disadvantaged individuals, or in areas with tight local labour markets. Without this level of sophistication the system will simply motivate providers to ‘cream’ the easiest to help clients from the pool, ‘parking’ the most disadvantaged individuals, because it would be unprofitable to work with them.

Additionally, we would welcome greater clarity on the timetable for secondary legislation to enable greater support to both lone parents and older workers. The latter group receives little targeted support within the current welfare system and the greater protection offered to older workers via the Employment Equality (Age) Act of 2006, needs to be reinforced with proactive support for those with dated or no skills who could re-enter the labour market.

Other groups, such as ex-offenders (many of whom end up as IB claimants), could benefit from a greater focus within welfare reform policy. The Wise Group has learnt valuable lessons from its work with ex-offenders about the specific support needs this group has when trying to find and keep a job. There is a wealth of evidence that shows that being in employment greatly reduces the chances reoffending and this has been the focus of many government policy statements ( The Management of Offenders Act (2005) in Scotland,  Reducing Reoffending Through Skills & Learning from the DfES), it is disappointing therefore that emphasis this has not been carried through as a key part of the welfare reform agenda.

For further information please contact Abigail Howard at The Wise Group:
Telephone 0141 3033131
Email Abigail_Howard@thewisegroup.co.uk