What do you think? • Social security: insurance or investment? • Good social security: supporting people when they fall on hard times or stopping them fall in the first place?
I think that the second option must be right but, as the paper by Will Horwitz explains, the short-term and Departmental-silo approach of Government spending structures has pushed us to the insurance after-the-fall answer. And the insurance model can mean that benefit payments may simply end up subsidising other parts of the economy without making enough of a positive difference for the claimants:
- Working Tax Credits subsidise low paying employers to the tune of around £27bn a year;
- about £24bn goes in Housing Benefits to landlords and their increasing rents;
- a sizeable proportion of about £26bn disability provision (nearly equally split between DLA/PIP and incapacity benefits –ESA, IB etc) will be attributable to employers failing to make adjustments for employees who acquire long-term health conditions (and the author later suggests that some £34bn are spent each year on benefits related to illness and disability).
Child Benefit (£12bn) that can offset the costs of raising the next generation is sizeable enough but just £5bn on JobSeekers Allowance seems paltry!
So what are the solutions? More housing might reduce rents (but increase the number of landlords), higher wages might reduce the need for WTC (and benefit savings could be passed to employers through the tax system), more preventative health care might reduce disability (with benefit savings transferred to Public Health), better sanctions on employers might improve retention (and funds raised be used for disability employment support).
The paper suggests a social investment approach that builds human capital: “We picture a society which is defined … by reference to its strengths. Its people are ready and able to benefit from opportunity, to learn at primary school, to thrive in secondary, they are job-ready at 17 and when the time comes they are ready and able to be good parents. Because we all experience difficulties at some point in our lives, they are ready and able also to manage adversity – to cope with losing a job or a relationship, to rebuild after illness or bereavement, to adapt to change”. The investment model would need changes to current Government funding structures: longer-term and recognition that more money/activity in one area will reap benefits elsewhere – a holistic cross-Departmental rather than silo approach.
In contrast, our current social security system seems to be the sticking plaster that attempts to reduce the impact of faults elsewhere in society but often don’t provide a cure, especially when it is late by design or inefficiency. Waiting for social security can make the patient worse: increasing stress, impacting on mental health, breaking down family support systems, compounding financial difficulties, distracting from job search, reducing the likelihood of returning to work after sickness and more. Sanctions provide an example of how the current system may be counter-productive: most of the recent increase in sanctions is due to claimants just not understanding their conditions rather than deliberately flouting them. The result is increasing numbers leaving the benefit system but still not finding work.
The final two chapters of the paper are particularly interesting to anyone concerned with practical employment support:
- Assume willingness – of people to comply, seek work, improve their lives etc.
- Provide early interventions – ideally before current employment is jeopardised either by sickness or because jobs are low-paid and insecure.
- Provide rapid access to support before networks, health, motivation etc break down.
- Provide more universal support – avoiding eligibility criteria, stigmatisation etc (but universal eligibility shouldn’t mean universal delivery methods that don’t cater for individual needs).
- Sustain and develop individual’s social relationships networks which amplify support and increase employment opportunities.
- Incentivise sustainable employment.
- Devolve employment support to Local Authorities with strong links to local employers and providers and incentivise them further with a share of benefit savings.
You can read the whole paper here
Bouquet of the week.
To school friend Maggie who took the time to visit me after nearly 27 years. She is a triumph of survival: ill-health, challenging relationships plus ill and ageing parents. Still planning for the future, using her talents and nurturing her family – what an example!
Disability Dynamics ltd www.disabilitydynamics.co.uk
Helping disabled people to work since 2000