A report on Universal Basic Services

The Institute for Global Prosperity has produced a report proposing the introduction of a range of universal basic services.  The principle is the same as the principle of the National Health Service, education in schools, or the road network: providing universal services would offer a foundation for everyone in the society.  The fields in which they are proposing basic services are shelter, food, transport and “information”, which includes phone, television and the internet.

The schemes are not all worked out in the same way.  The proposals that would be genuinely universal are for public transport (extending the equivalent of pensioners’ bus passes to everyone) and communications.  The food service they propose is essentially a residual network for poorer families, replacing food banks and soup kitchens; the model for housing is an extension of existing social housing stock.  Neither would be universal.

They also compare the costs of their scheme with Universal Basic Income.   It’s not a completely fair comparison, because the provision they are proposing for housing and food is not provision for everyone; if they were genuinely offering either of those on a universal basis, the costings would look a lot different.  It is fair, however, to remind people of the alternative to Universal Basic Income.  People need an income so as to buy goods and services on the private market; it may be possible to take those services out of the market altogether.

Both the universal schemes they propose, and the underlying arguments, are interesting and thought-provoking.  I’m persuaded by the ideas of the universal bus pass and a universal infrastructure for the internet; I think others may need more work; but it’s a debate that’s well worth engaging in.

 

 

The Future of Social Security in Scotland: views from within the system

After a little delay,  PCS, the  Public and Commercial Services Union, has published our report on the views of DWP officers administering social security in Scotland.  The report is based on group interviews and questionnaires done earlier this year with 228 DWP officers.   This is not the first report ever to ask social security officers what they think, but it’s a rare event.  The officers generally showed an acute and detailed understanding of current problems in the benefit system, and expressed their frustration that they were not being permitted to set things right when they could.  They complained about constant micro-management, with inadequate staffing levels, poor training and failing  IT systems.  Many of them wanted to be able to provide a more personal service, following people’s cases through from start to finish.

Universal Credit: what took everyone so long?

There’s been a flurry of calls for the rollout of Universal Credit to be delayed (e.g. from two reports from Citizens Advice, and concerns from  Louise Casey and a clutch of Conservative MPs).   It’s still possible to hear people saying what a good idea Universal Credit is, how it was going to simplify everything and how it would help work incentives. “The trouble with Universal Credit”, a New Statesman article tells us, “is that everyone thinks it’s a good idea.”

There are four sorts of problems.  First, there were the basic flaws in the design.  I wrote this in a paper published in 2013:

Means tested benefits are not, of course, the only benefits which are subject to problems.  There are other aspects of the benefits system which are cumbersome, badly designed and problematic for claimants and administrators alike. They include, for example,

  • benefits which people cannot work out they’re entitled to
  • the problem of repaying money that people did not know they should not receive
  • rules that tell people they must work at the same time as recognising that it‟s not reasonable to work (the current position for ESA)
  • the medical reassessment of claimants
  • benefits which penalise claimants for circumstances outside their control
  • the cohabitation rule, and
  • complex assessments that require people to report changes across multiple dimensions.

Universal Credit has the lot. It is as if someone has started with a list of everything in the benefits system that causes problems and designed the new benefit round it.

Then there was the abandonment of all the benefit’s objectives, one by one. All the primary objectives – such as simplification, work incentives, reducing in-work poverty, smoothing transitions and cutting back on fraud and error – have been fatally compromised. The marginal rate of deduction is much higher than intended. The cuts in work allowances have removed any incentive for most claimants to remain in contact with the system if they find work.

Third, there were the problems of implementation.  None of the innovative methods envisaged – real-time processing, smooth tapers, digital by default – was achievable. There is no effective system for coordinating and pooling all the information required in one place – the new system has come to rely primarily on returns from claimants about changes. The system makes complex demands of claimants (for example, those relating to security, agreements by couples or job search) which are almost impossible to police.  It system relies on accurate information from claimants, and people cannot respond sensibly to questions they do not know the answer to.

And then, last of all, there are the so-called ‘teething’ problems – the difficulties of introducing the new benefit at the same time as managing a large injection of additional rules about waiting time, conditionality and housing. With or without Universal Credit, we are already in the position where nearly a quarter of unemployed claimants have had benefits stopped.  Universal Credit is not just threatening  a major breakdown in the safety net; it has already happened.

I did wonder, before I started, if I really needed to bother writing all this again.  I’ve been making the same sorts of criticisms of Universal Credit for nearly seven years now – try this blog from October 2010,  when I was arguing that the scheme was simplistic, impractical and wouldn’t either enhance work incentives or reduce administrative errors.  While it’s encouraging that so many people are waking up to the problems – it’s never too late to make things a bit better, at least – I have to ask: what took everyone so long?

The prospect of rent control

I was expecting Jeremy Corbyn’s call for rent control to be met with the usual litany of ideological nonsense, so it’s been refreshing to discover that there is actually a nuanced debate about it.  The nonsense comes mainly from the political right, who have pointed to the supposedly destructive effects of rent controls: cutting prices, they argue, must cut supply.  The assumption is supported by a long string of economists, many of whom have been told it’s true during their first year of study.  Empirical evidence on rent control shows just the opposite: the supply of rented housing is generally larger where rent control is in force.  (See R. Arnott, 1995, “Time for revisionism on rent control?”, Journal of Economic Perspectives 9(1) 99-120.) There’s a balanced review of evidence in a recent Parliamentary Briefing.

Many writers still accept the questionable argument that ‘first-generation’ rent control in the UK made the sector shrink.  In fact, rent control in the UK slowed the decline of a sector whose best-paying tenants were becoming owner occupiers or council tenants, leaving a poor residual population of tenants.  When rent controls were lifted in 1957, the movement out of the sector became a waterfall.  It happened partly because rent is not the main determinant of investment decisions, and partly because “rent control” is not just about rent; it’s about the protection of tenants, security and regulation.  Cutting those protections is likely to reduce the supply of housing, as  landlords sell up.   The recent revival of the private sector reflects not the slow expansion after the deregulation of 1988, but a much more rapid expansation after 2001, reflecting a favourable combination of capital values and interest rates.   That has been reinforced by the balance since 2008; as and when interest rates increase again, capital values will suffer and other investments will be more attractive.

Shelter’s position on rent control has attempted to look at a range of different policies which come under the general banner of rent control: some, they suggest, would be harmful, some would be beneficial, and some would make very little difference.   While there’s obviously a need for tenant protection, the fundamental problem with the housing market is not about rents as such; it’s about access to housing, and that depends on supply.   As long as there aren’t enough houses, and those that there are are in the wrong places, some people are going to be left out.  Some people will be squeezed – high rents, poor conditions – and others will be left out altogether.  Britain has millions more people than it used to have, and it needs millions more houses.

 

“Well, here we go yet again … another sorry tale of HMRC institutional incompetence and inefficiency”

The judgment of Justice Nicholas Wikely in the Upper Tribunal in VO v HMRC (TC) [2017] speaks for itself:

“Well, here we go yet again.  I used the phrase “Well, here we go again” with a sense of frustration, bordering on despair, to open my decision in NI v HMRC [2015] UKUT 160 (AAC), a case in which I criticised Her Majesty Revenue and Customs (HMRC) for both its decision-making processes and its conduct of appeals in relation to tax credits claims. .. So, yes, in short this is yet another sorry tale of HMRC institutional incompetence and inefficiency which could well have led to injustice, were it not for the persistence of the Appellant.”

But of course, it did lead to injustice: the denial of entitlement and redress for five years. The judge explained the case as follows:

The HMRC written response to the Appellant’s appeal made the case look very
straightforward. In a nutshell, the Appellant had failed to reply to a request from HMRC to provide evidence of her entitlement to tax credits. She was therefore no longer entitled to tax credits for the relevant tax year and was liable for a substantial overpayment. So, according to HMRC, it was an open and shut case. End of story. … In her notice of appeal, the Appellant stated that “as I previously explained, I forwarded all the information required from me and to my surprise you never received the documents” (emphasis added). I interpose here that I have underlined the phrase “as I previously explained” as this statement alone should have rung alarm bells for the FTT. This is because there was nothing at all in the HMRC evidence provided with the appeal response to suggest that the Appellant had made any contact with HMRC before her notice of appeal … In the parallel universe that is tax credits adjudication, the file does not actually include something as elementary or fundamental as the actual decision notice. As HMRC’s original response to the FTT appeal explained, the HMRC computer cannot provide a copy of a decision notice – only the claimant can do that. So, in a classic Orwellian doublespeak, the response continues: “HMRC has not omitted to include the decision notices from the bundle; it is simply unable to provide copies”. How are we supposed to respond to this? “Oh well, that’s alright then.” Who designed this computer system? Did anyone think to check it was compatible with basic tenets of good public administration, let alone the principles of administrative justice?

He warns first-tier tribunals not to take HMRC’s statements on trust.

The basic principles of administrative justice include the right to know what the argument is against you, and the right to have a hearing. The same disregard for citizens’ rights, of course, is found in decisions about sanctions, where penalties are frequently imposed before the claimant has any opportunity to object.

Should “The case for colonialism” have been published?

Yesterday I received a circular request to sign a petition to have an academic article taken down.  The article in question is  “The case for colonialism“, written by Bruce Gilley, and published by Third World Quarterly. For Gilley, anti-colonialism has justified practices that are worse than the colonial systems they replaced; he tries to justify colonialism on the balance of costs and benefits. There’s a forceful rebuttal of the arguments by Nathan Robinson in Current Affairs:

“Truly unspeakable harms can simply be “outweighed” and thereby trivialized.  … Building power lines and opening a school doesn’t provide one with a license to rob and murder people.”

Being concerned about contemporary policy, I’m less concerned about the historical revisionism than about the mis-characterisation of current issues in development.  There have been massive improvements in much of Africa in recent years, and they have not happened by magic.  Gilley suggests that

The ‘good governance’ agenda, which contains too many assumptions about the self-governing capacity of poor countries, should be replaced with the ‘colonial governance’ agenda.

The agenda he’s criticising makes no such assumption; on the contrary, it’s about creating capacity.  The process has encouraged governments to recognise their limitations and to work collaboratively with a range of stakeholders and partners.  Just the sort of thing that colonial governments didn’t do and that international organisations have had to learn.

Gilley’s critics have described the argument as “racist” and “white supremacist”; neither of those is justified by its content.  The article is provocatively written, somewhat cavalier about evidence and possibly slightly bonkers. Does it follow, though, that it should be withdrawn from circulation?    The proper response to anything of this nature is to make the case against it, not to have it expunged from the record. When I’ve taught students about ethics and policy in the past, I’ve sometimes given them extreme positions to consider – arguments for torture and infanticide amongst them. I’ve wanted them to be able to respond cogently and fluently to offensive views, because in real life speechless rage doesn’t win the day. I’d have had no hesitation in getting students to write a critique of this paper.  Students tend to be far to deferential to the things they read; a healthy disrespect for the printed word is something to be encouraged.

 

For dignity and respect, it matters how people are treated

The Scottish Government has said that the new social security benefits will be bound by principles of dignity and respect, so the publication of a commissioned report on Social security systems based on dignity and respect ought to have been very welcome.  Unfortunately, the report fails signally to come to terms with its brief, choosing instead to emphasise either human rights issues or the substantive failures of social security policy.  Both sets of issues are important  – they are necessary for dignity – but they are not sufficient.  There is nothing in human rights legislation which says that people will be addressed politely, that they will be believed when they say things, or that officials will be considerate.

There is very little in this report about those issues.  The report acknowledges, in the Executive Summary, that “The feeling of being treated unfairly or viewed with suspicion by case workers on permanent alert for fraud is reported as particularly demoralising” – there is some further material on these problems on pp 33-35 – but the authors don’t go on to say what needs to be done about them.  A   chapter on “Ensuring dignity and respect in the claimant experience” really says nothing about the claimant experience, let alone about dignity and respect.

The central issue is how people are treated.  The report ought to have considered process at length – access, application, communication, assessment, handling changes of circumstance and so on.  There is some (admittedly dated) empirical evidence that many of the processes used for verification are unnecessary, that insisting on claimant declarations  colours the process, that security is disproportionate and ineffective in dealing with errors.  The system is not geared to deal with complaints or to correct mistakes.  The nearest the report gets to most of this is to  call for greater  personalisation, which risks increasing the scope to get things wrong and exacerbates the problems of judgmental administration.

An assessment of Basic Income

Luke Martinelli’s assessment of Basic Income is a serious, wide-ranging consideration of several of the arguments: among them, affordability, distributive effects, work incentives and political feasibility.  There is more to say about administration, implementation and the relationship to existing benefits, but no-one ever covers everything.

He characterises the opposition to UBI as saying that “an affordable UBI would
be inadequate, and an adequate UBI would be unaffordable.”  That’s not the whole story, either.  I put the case like this in a video interview:

“If you limit the level of benefit you are still dependent on other benefits, so you’ll get all the problems of the tapers, the poverty trap, the intrusion into people’s lives and the complexity.  If you increase the cost, then you can float people off those benefits – but what will you have achieved if you do that?  … those people who were formerly on benefits will find themselves on the equivalent in Basic Income, and you’ll have spent nearly all the money to the benefit of people who weren’t on benefits – to people who are better off.  So you have really got to decide, is it worth putting large amounts of money into a scheme which isn’t going to benefit the people you most want to help?”

Self-directed support makes little headway

Self directed support in Scotland hasn’t exactly shaken the rafters – a report in 2014  called the system “nebulous” – but an Audit Scotland report suggests it “shows many examples of positive progress”.  The vague welcome is hardly justified; this is a system that’s hardly stirred into life at all.  The Social Care (Self Directed Support) (Scotland) Act offers four  “options” for self-directed support:

  • Option 1  Direct payments
  • Option 2  The individual chooses the support and the authority manages it
  • Option 3  The authority chooses the support and arranges it
  • Option 4  A mixture of options 1, 2, and 3.

It’s highly debatable whether option 3 can be thought of as self-directed support at all, and it’s far from clear what qualifies as option 4.

An Audit Scotland report claims that  “at least” 53300 people, out of 208,000 adults receiving non-residential support, are getting SDS.    Of that figure,

  • 11% chose option 1
  • 9 per cent chose option 2
  • 75% chose option 3, and
  • 5% chose option 4.  (para 24)

So out of that 53,300, something between 10600 and 13330 people chose an option.  Direct payments have increased, from 3680 to 7530 people 2010-16,  but as a proportion of more than 200,000 people it’s a very long way from the ‘total control’ supposedly offered by SDS.

It’s also troubling that at this stage the evaluation has not been able to show any clear advantage in personal budgets, even for the selected few who receive them.  A few qualitative comments show that some people support the idea in principle; other comments point to difficulties in knowledge, implementation, resources, restrictions from the local authority and a lack of choice.  My own experience as a carer has been that assessment came cursory and late, with no effective choices at all.  I’ve previously expressed some scepticism about personalisation; developments to date have done nothing to change that view.

The negotiations about Brexit aren’t addressing key issues

Although the EU has been behaving badly about the Brexit negotiations, they have reason to complain about Britain, too.   They’re right, first, to say that Britain’s position papers are too vague to be any use.  Britain offered 16 pages on trade, for example, recently supplemented by another 11 pages on continuity.  It’s not difficult to know what a successful trade agreement looks like.  The agreement with Canada, CETA, runs to nearly 1600 pages.  What  the UK had to do – and it’s had 15 months to do it in – was to begin with those 1600 pages, identify which terms are acceptable to Britain (they are all, after all, already acceptable to the EU), and then work on the differences.  That would still be a lot of work, but at least there’d be a meal on the table rather than a bowl of twiglets.  Britain can hardly complain that trade is  not being discussed if they’ve not offered any points for discussion.

The EU negotiators are right, too, to identify key issues besides trade: citizens’ rights, Ireland and treaty obligations.  The UK’s concerns are difficult to decipher; the latest position paper relates to the confidentiality of official documents, which suggests that government ministers are more concerned with covering their backs than they are with getting on with the business. Where the Commission is behaving badly is to say that nothing else gets discussed.  The EU also has treaty obligations.  Article 50(2) states that

the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.

Whatever happens about the bill, the EU has no right to refuse to discuss the future relationship.

Two of the three items the EU is starting with are, in fact, about that relationship: Ireland, and citizens’ rights.  The Irish border is difficult, but not intractable, because different elements can be separated out and dealt with differently:  for example, Switzerland is not part of the customs union or the EU but is part of Schengen.  Citizens’ rights is much the more complex problem, and neither of the parties has shown any inclination to acknowledge that UK citizens resident in the UK are also currently citizens of the EU, and many will face the same sort of problems with split families, cross-border care, pension rights or interrupted periods of residence that people now in Europe or other nationals now in the UK will face.