Draft regulations have been published for funeral benefits. We should have a universal benefit instead.

The Scottish Government has published draft regulations relating to ‘Funeral Expense Assistance’.  They are a disappointment; the Government seems to see the purpose as being to replicate, to the greatest extent possible, the existing scheme of funeral payments, and that scheme largely fails in its objectives. Funeral payments fail to reach probably half of the people who should get them.

The core problem is that the benefit is simply too complex.   The draft regulations have these objectives:

3 (2) Regulations 5 and 6 describe eligibility conditions relating to the applicant’s relationship to the
deceased person and multiple applications.
(3) Regulation 7 describes eligibility conditions relating to the applicant’s residence, the last
residence of the deceased person and the place where the funeral takes place.
(4) Regulations 8 and 9 describe eligibility conditions relating to the financial means of the applicant,
based on receipt of income related benefits, and of the estate of the deceased person.

There are too many moving parts for this ever to work.  Look at this regulation:

5.—(1) To qualify for funeral expense assistance the applicant, or the partner of the applicant, must
have accepted responsibility for the expenses of the funeral, and the Scottish Ministers must
consider it to be reasonable for that responsibility to have been accepted.
(2) In determining whether it was reasonable to accept responsibility, the Scottish Ministers must
consider—
(a) whether someone other than the applicant, or the partner of the applicant, would be the
nearest relative of the deceased person in terms of section 65(3) to (6) (arrangements on
death of adult) of the Burial and Cremation (Scotland) Act 2016; and
(b) any other relevant circumstances that the applicant brings to their attention.

There are five  elements in this process: the circumstances and resources of a claimant, the circumstances and resources of the deceased, the arrangements made for a funeral, the relationship between the claimant and the deceased and the situation of other relatives who might potentially pay instead.   Of course it can’t work.

What else could the government have done?  We already have public funerals for isolated cases where people have no resources.  We could go for a much simpler, universal approach: remove local authority fees for lairs and cremations.   The cost is certain and relatively predictable, and I don’t think we need to worry about abuse, fraud, incentives to die or stimulating take-up from undeserving cases.

There is a general point to consider, too.  The Government is beginning with funerals because they’re relatively straightforward, but their approach has been to take the existing scheme and “drag and drop” the regulations with a few tweaks.  Far better to rethink.

Progress on the Social Security Bill

The  Social Security Committee’s first stage  report on the Social Security Bill says a lot of the right things about the draft:

  • the status of the principles needs to be clarified
  • the balance between the framework and secondary legislation needs to be redressed
  • there has to be a mechanism to review regulations – the committee recommends an independent Scottish Social Security Advisory Committee.

They have an accessible summary here.

Additional note, 15th December:  The Scottish Government’s Response has also been published; in general, the response seems to be made of warm words rather than a commitment to do anything differently.

Scotland’s Racial Equality Plan is a model of good sense

The press reports on the Racial Equality Plan made me apprehensive.  They’ve been talking about ‘targets’ for minority ethnic employment in Scotland.  In the limited work I’ve done on minority groups, what came over was the diversity – the position, for example, of Filipinos, gypsy travellers and and people from South-East Asia  – and their relative isolation.  There are too many small, dispersed minorities in a society to make intervention by numbers effective.   I needn’t have worried.  The plan, advised by Kaliani Lyle, is exemplary, recognising the special pressures on particular groups (notably Gypsy Travellers)  but with the emphasis strongly falling on dialogue, consultation and engagement.   Things done well are never as satisfying to a blogger as things done badly, so I’ve not much to add.

The worst social security policy ever?

In a recent blog, Jonathan Bradshaw has suggested that limiting Tax Credits and Universal Credit to two children is the “worst social security policy ever”.  There’s a lot of competition for the title.  As Jonathan writes,

There are many competitors for this accolade in our history — less eligibility in 1834 Poor Law Amendment Act, the 1934 Unemployment Assistance Board household means-test, the 1991 Child Support Act, the 2017 lower benefit cap and, probably forthcoming, Universal Credit.  But the two-child policy is just morally odious.

That set me to wondering: aren’t there worse examples?  Here are a few other contenders.

Settlement and removal.  The effect of the settlement laws under the Poor Laws meant that the local parish had to support certain people, and that if they were in need elsewhere they’d be “removed” to their parish of origin.  That meant both that parishes did their utmost to avoid illegitimate children being born on their patch – if necessary, picking up a pregnant woman and dumping her on another patch – and that people in need were transported back to their original parish, regardless of their reasons for leaving.

Housing Benefit.  The Housing Finance Act 1972 set about demolishing the system of housing subsidies, and trebled rents in the process.  Housing Benefit was introduced initially in the form of Rent Rebate and Rent Allowance, supposedly representing a shift from subsidising bricks and mortar to subsisising people.  The benefit was staggeringly complex, the costs and management span out of control.  The effects were catastrophic, especially when they were combined with the costs of rent from Supplementary Benefit.  The first stage might be thought of as a blunder – the theory said that it would be more efficient to direct resources to people.  The second stage, introduced when it was evident that the first stage hadn’t worked, was a fiasco.  We’re still suffering from the consequences: a destruction of housing subsidies, a diversion of resources to private landlords, a horrendous poverty trap, and the introduction of restrictions (including the benefit cap) because the system is unworkable.

The Griffiths report.  Creating a quasi-market system in social care was widely welcomed by many people who ought to have known better, and the system still has its defenders.   The system depends on intrusive personal assessment, penal means tests, market distribution (which always leaves gaps) and lengthy delays in service delivery.  Some of the defences begin with feeble excuses, such as the claim that it would all have worked if only there was more money and the thing had happened more; some try to deny that we’ve been trying to do this for nearly thirty years and it’s never worked.   (It’s a social security policy, because it directs cash towards a test of need rather than  providing a basic service.  A large part of the funding came from the  resources for residential care that were being paid for in social security benefits. )

Reclaiming overpayments.  The practice saddles people on low incomes with long-term debts. It used to be the case that claiamnts could only be directed to repay money if they had misrepresented or failed to disclose a material fact.  That was overturned with the Tax Credits system, which presented people with demands for repaying thousands of pounds they had no reason to suppose they weren’t entitled to.  The Ombudsman laid into the system as being fundamentally unsuited to the needs of the low income families it was supposed to help.  Now the same principles are being rolled forward into Universal Credit – and, it seems, the new Scottish system of benefits, including benefits for disability.

Disability assessments.  I’ve already referred to personal intrusion.  Why is every person who is sick required to undergo an assessment?  Why are medical records disregarded?  Why is everyone being asked about going to the toilet?  Why are most of the people who are too sick to work being required to attend sessions to indicate a readiness to work?

Suspending benefits.  When the “four-week rule” was applied, research (by Molly Meacher) reported that about a third of the people subjected to suspensions were convicted of their first criminal offences afterwards.  Now lengthy, indiscriminate suspensions have become a major aspect of the social security system, with getting on for a quarter of all claimants having benefits sanctioned for a period, and some having benefits cut off for three years.    There are no circumstances where leaving people without enough to buy food is ever justified.

These policies have something in common.  In every case, it’s not just that the policies didn’t work; it’s that after they had been tried out and were shown to have bad effects, the responsible governments ploughed on regardless, and rolled them out more generally.  That’s the point at which incompetence crosses over into immorality.  And that’s why Universal Credit is such a horror: it takes every element in recent years that has been shown not to work (tapers, sanctions, delays, assessments, obstructions to redress, transfers of process across agencies, multiple moving parts, and so on), and builds a whole system round them.

 

 

The joint agreement of the UK and the EU

The text of the agreement between the  European Union and the UK is now online.  There are sixteen pages, contaning a considerable amount of detail in some respects (particularly citizens’ rights). The press has caught up with its existence but the details have not been published more widely yet.

Pages 1-6 are taken up with citizens’ rights.  The rights are centred on a “specified” date, which is the date of the UK withdrawal.  It allows for family reunion and marriage for those who are resident on the specified date. There is no other protection for the EU citizenship of UK citizens who are in the UK on the specified date. People  who move between EU countries while retaining UK residence are not protected.

On Northern Ireland (pages 7-9), there will be no hard border but there will be “mechanisms” to protect the integrity of the Customs Union and the single market.  The Common Travel Area can continue, by neogitation between the UK and Ireland.

On financial arrangements, the UK will continue to contribute to the EU as if it was a member until 31st December 2020.    In other words, the UK government chose the wrong date for its notice.

Police and judicial cooperation will continue under EU law.   Other continuing arrangements will “closely mirror” EU arrangements.

 

Is the Irish dilemma beyond a solution?

The problem for the UK government seems to rest in a choice between two unacceptable options.  On one hand, they can treat Northern Ireland wholly as part of the mainland, implying the return of a hard border.  On the other, they can treat  Northern Ireland is treated differently from Great Britain, allowing for regualtory alignment with the Republic of Ireland.  The UK government seemed posed to accept the latter, but it has been resolutely rejected by the DUP:

“We have been very clear. Northern Ireland must leave the EU on the same terms as the rest of the United Kingdom. We will not accept any form of regulatory divergence which separates Northern Ireland economically or politically from the rest of the United Kingdom.”

There is a third option.  The United Kingdom has three devolved governments, each of which already has partial derogations from laws and rules which apply in England.  If the British government accepted that there could be a derogation of rules for all three devolved governments, it would no longer be the case that Northern Ireland was being treated differently from the other parts of the United Kingdom.    The precise scope of that derogation has to be considered, but the terms and management of the derogation could be delegated to Scotland, Wales and Northern Ireland to resolve.  It’s called ‘devolution’.

Spot the difference

According to the Treasury, “in 2015-16 income inequality fell to its lowest level since the mid-1980s.”  This is from the Treasury’s paper on the distributive impact of the budget:

This, on the other hand, has just been circulated on Twitter by Alison Garnham of CPAG:

This is what the Treasury thinks is happening after the budget, reviewing income in percentage terms:

And this is what the IFS thinks:

As they ask in Private Eye: I wonder if they are related?

What benefits are for

A response to my post yesterday on Twitter asks:  “Wondering what “directed to the wrong purposes” really means?” Twitter isn’t a good medium for discussion, so I’m going to try to deal with it here.  This government believes, I think genuinely, that the primary purpose of benefits is to help people into work.  That was the view not just of the Coalition before them, but the Labour government after 1998:  people may remember the slogan, “work for those who can, support for those who cannot”.

I tackle this point in my book, What’s wrong with social security benefits?  Most people on benefits aren’t expected to work (actually, most of them are pensioners); most people of working age aren’t expected to be in the labour market; most of the rest are working.  Benefits are there for lots of reasons – among them, meeting need, relieving poverty, economic management, social inclusion, subsidy, compensation, and so on.    When we get to particular categories of people, such as disability, the aims multiply; for example, I gave a special presentation last year about the provision available for people with mental health problems, and the list I’ve just given here doesn’t cover the ground at all.  When we get to the issues of Universal Credit, pat formulas about work miss the point; and the incongruity of lumping together issues such as self-employment together with incapacity, homelessness and child care  helps to explain not just why the system isn’t working, but why it can’t.

 

Tinkering with Universal Credit

The announcement of modifications to Universal Credit in the Budget fall a little short of what is needed.  Para 6.14 outlines proposed changes:

  • advances on entitlements for those ‘in need’ – effectively an interest free loan repayable over twelve months.  UC will continue to be paid in arrears.
  • the reduction of waiting time by 7 days; it will still be 5 weeks for most claimants.
  • continuation of Housing Benefit for two weeks.  That should reduce rent arrears by two weeks – it is not enough to ensure continuous payment.
  • ‘easier’ arrangements for payment of rent to landlords.
  • a slower roll out, still to be completed by December 2018; and
  • a limited trial of ‘innovative” approaches to improve earnings.

What the proposals didn’t include was

  • a review of tapers
  • a review of work allowances – the current allowances are too low to lead to continuity of contact
  • a review of the treatment of children
  • pause and fix, or
  • any announcement of measures to deal with the administrative problems.

Para 6.12 and 6.13 defend the system’s design. The government evidently thinks that the scheme is okay because people on it are working, and that if there are residual problems it’s because people are not getting out and working.  They haven’t realised that most of the people on working age benefits, and so most of the people the scheme is going to deal with in due course, are unable to work, and most of the rest are working already.  (Universal Credit should ultimately be there for 6 to 7 million people; only 1.4 to 1.5 million of them are ‘unemployed’, that is not working and available to work.)  The roll-out of Universal Credit began by focusing on a particular category of claimant, mainly younger single applicants; but as the scheme expands, more and more of the people who are being dealt with will be in other categories. That’s why problems such as self-employment or telling people who are working to come in to the office are only really emerging now.  The scheme is not so much ‘unfit for purpose’ as directed to the wrong purposes – and that means that no amount of reinforcement is ever going to make it appropriate to people’s needs.

A free textbook on economics

I don’t usually post about a book before I’ve finished reading it, but this one is going to take me a time to get through and it’s worth sharing.  The Economy is a free online textbook on economics, produced collectively by CORE, an international group of economists who are concerned about the way that economics has become detached from the real world.  The word cloud in this image is the way they indicate their priorities in the preface.  (My own reservations about economics as a discipline can be found in an article in the Real World Economics Review published last year.)

I’m not going to endorse everything in the textbook, because there are various issues in the way economists think about their subject that  I’ve been critical about. I’ve got far enough into the textbook to be able to make reservations about indifference curves, the subject of the third section, or the applicability of game theory, the subject of the fourth.   (My criticisms of those methods can be found in my book on Reclaiming Individualism).  I do want, however, to welcome the approach, the accessibility of the document, and the determination of the team to make the text available to everyone.