Category: Social security

This blog includes discussion of issues in British social security policy, along with new material to complement my book, How Social Security Works.

Social Security Scotland lays out its stall

The Corporate Plan published by the new agency, Social Security Scotland, is brimming with good intentions.  Under the agency’s name is the motto: dignity, fairness and  respect.  The key to this rests in how the agency deals with mistakes, and there will be mistakes: introducing complex systems for people with complex problems to resolve makes that inevitable.  There are some good signs: a commitment to resolving issues “resolved quickly and at the point of contact”, listening, and ‘continuous improvement’, using feedback to improve the quality of services.  The problem, however, rests in a bitter legacy of conflictual, adversarial approaches to managing agency mistakes.  Several elements of the new system create hurdles to overcome:  mandatory ‘re-determination’ (the decision should have been checked anyway on first complaint), referral out to the Scottish Public Services Ombudsman (another hurdle), and heavy reliance on the appeals structure.  This may all work work against speedy and effective resolution.

Discussions of Universal Basic Income

I’ve written several background papers for a series of seminars on Universal Basic Income, and the first of them has been put online by Citizens Basic Income Network Scotland.   The series will include specific discussions about employment, rights and equalities, housing,  care and implementation; I was asked to do papers for three of them (rights, housing and care).  (The seminar series is organised by the Scottish Universities Insight Institute at Strathclyde University; details are available on request.)  In due course, after the seminars are finished, I’ll be revising the papers for an integrated presentation.

I’m still sceptical.  While I’ve always been sympathetic to arguments for more universal benefits and services, there are lots of key problems that need to be thought through before a scheme could be introduced.  Too many of the published schemes either wave those problems aside or try to manage them by making poor people worse off.  As things stand, the best possible schemes would not offer anything like an adequate, secure income.

The problems of Universal Credit aren’t just about transition

I looked at the report of the Resolution Foundation on Universal Credit when it came out, but wasn’t particularly excited by it.  It seems to say that the system can still be made to work given time and effort, and I’m not convinced that it can.  I referred to a number of the “teething” problems, so-called, in a previous post: they included

  • the difficulties people have in making digital claims
  • the lack of reasonable adjustments for people with disabilities
  • requiring claimants to make claims in order to migrate, and using mistakes or omissions as a reason to demand  fresh claims
  • insufficient levels of ‘universal support’
  • obstacles to cooperation with welfare rights advisers
  • the DWP’s apparent inability to engage with the process by which claimants report changes, the electronic ‘journal’, and
  • the inappropriate use of sanctions.

But there are many more problems, where the system simply cannot operate as intended.  Those include

  • the muddled system for verification, which cannot be done online
  • the demand for instant assessment, rather than basing claims on previous, known income
  • the unpredictability of a system where entitlements can be revised at short notice before payment date
  • the use of individuated payment dates
  • the lack of effective coordination with taxation
  • the confused treatment of self-employed people
  • the alterations to work allowances, which mean among other things that contact will no longer be maintained
  • the effect of fluctuating entitlement on household management, particular evident in the treatment of rent
  • the impact of the system on housing finance, and
  • arrangements for transition that  lead to major income loss.

Beyond that, in terms of the overall design of the benefit, there are several systemic flaws:

  • the complex means test
  • the reliance on digital systems
  • the reliance on immediate access to information that people cannot know about
  • the high taper rates
  • the failure to individuate claims
  • the lack of flexibility, and
  • the central confusion about employment and job-seeking – once the system is fully rolled out, most claimants on Universal Credit will not be seeking work.

The operational problems are all difficult, requiring a rethink of policy and administration to make the system work .  However, even if they were all to be resolved, the fundamental defects in the system would remain.

Problems in migrating to Universal Credit

The National Association of Welfare Rights Advisers (NAWRA) has made a submission to the Social Security Advisory Committee about ‘managed migration’ to Universal Credit.  They point to a series of problems:

  • the difficulties people have in making digital claims
  • the lack of reasonable adjustments for people with disabilities
  • requiring claimants to make claims in order to migrate, and using mistakes or omissions as a reason to demand  fresh claims
  • insufficient levels of ‘universal support’
  • obstacles to cooperation with welfare rights advisers
  • the DWP’s apparent inability to engage with the process by which claimants report changes, the electronic ‘journal’
  • the inappropriate use of sanctions.

All of this implies a need to “pause and fix”.  But even if that happens, the fundamental problems in the design and delivery of the benefit will still be there.

A glimmer of hope for disability benefits?

I’ve just spent a productive afternoon at a round-table discussion of benefits for disability, at the Scottish Parliament.  While many groups are understandably concerned with the transition from UK to Scottish administration, there is also some interest on seizing on the opportunities that the new legislative framework offers.  The need to protect people’s current situation is however emphasised by a recent report from the MS Society, charting the impact that the transition from DLA to PIP has had on people with multiple sclerosis.  The transition had had a major negative effect on daily life, emotional well being and the medical condition of sufferers.

There’s a limit to what the Scottish Government can hope to do; the system is a mess, and resources to revive it are limited.  The best hope probably lies in reforming the culture of the administration:  moving, if it can be done, from an adversarial system to one that listens, learns and corrects its mistakes.

Terminating a Basic Income experiment tells us something, too

The decision to terminate the Basic Income Experiment in Ontario is a sort of finding, too.  The design of related experiments has usually been based on short term economic or behavioural effects – because that, after all, is all one can hope to pick up from an experiment for two or three years.  However, the arguments around Basic Income, on both sides, are about something different – about social and cultural change.   That kind of change can take a generation or more, and it’s simply not going to appear in the way that economists usually model such effects.  I’ve previously drawn the parallel with the introduction of old age pensions, where the effects in the UK weren’t fully resolved in sixty years.  It’s not possible, more than a hundred years after the introduction of pensions, to be certain what the implications were for older people at the time – and people considering retirement would have been right to be uncertain.  The costs of the 1908 scheme led the UK government to threaten retrenchment, and after massive post-war cuts in other services (the “Geddes axe”, applied 1921-22, cut spending worth 10% of GDP), in 1925 pensions were fundamentally reformed to raise money through contributions instead.   Most older people were retiring by the 1940s, but many people who were retiring in the 1970s were still deferring their pension claims.

The decision in Ontario comes shortly after a (somewhat less brutal) decision in Finland not to extend their experiments.   The message coming over is clear and strong: Basic Income is pushing at the limits of what politicians are prepared to consider.

What does this imply for Basic Income?  First,  politicians won’t leave Basic Income alone – they just can’t stop themselves from tampering.  Look at Child Benefit, which was working really well before the Coalition government decided to create special conditions for wealthy people. If Basic Income comes, it won’t be forever.

Second, there’s no such thing as an unconditional benefit.   Issues which may seem relatively minor now, such as the treatment of migrants, prisoners or religious communities, are going to surface eventually.   Some of the conditions are more liberal, some are less intrusive, but there will be conditions – tax exemptions to “send a message”, rewards for virtue, or whatever.  People advocating for Basic Income have to argue for conditions to be kept to a practical minimum.  That’s hard to do when politicians and the press will convert it into “benefits for paedophiles” or “benefits for members of ISIS”, with specific instances.  Be prepared.

And that leads to the third point: whatever people use their Basic Income for, they’d be unwise to bank their long-term security or future life-plan on it.  How long would it take before the system is so strongly embedded that the future becomes certain?   I can’t be sure, but it’s not going to happen in a three year experiment.

McVey’s vision is the wrong direction for benefits

In a speech to Reform, Esther McVey has outlined her vision of a reformed system of welfare benefits.    It is almost exactly the opposite of what I have argued for over the years, most recently in What’s wrong with social security benefits?  Ms McVey explains:

Our vision is one of a personalised benefit system, a digitised system.

Mine is for a system that is simple for claimants, less intrusive and less presumptuous.

We’re rolling 6 benefits into one, that means that people now have a better oversight of their income and can spend accordingly.

The government has produced a benefit which delivers an unpredictable outcome that is subject to change at very short notice.  Withdrawal of all the elements of benefit all at once invites catastrophe.

We are developing a personalised system that gives a 360 degree view of an individual’s needs to provide bespoke tailor-made support.

The government has developed a benefit which is too complex for the administrators to manage, or even to pay on time, and too complex for claimants to understand..  People can’t work out whether they’re entitled, what they’re entitled to, or when entitlement stops.

Part of the problem, of course, is the misplaced faith in technology to resolve complex  personal circumstances.  Part is the emphasis on employment, which is simply irrelevant to most of the projected population that the benefits are intended to serve.   But a larger part is the arrogance of a government department that assumes that it will be capable  of responding to complex situations if only it asks for more, processes more and does everything more thoroughly.    There are limits to what governments can do, and Ms McVey’s vision of a personalised, comprehensive digital system goes far beyond them.

Universal Credit still fails to deliver

The DWP has just released statistics that tell us that

83% of new claims to Universal Credit Full Service received full payment on time.
94% of new claims received full payment within 4 weeks of the payment due date.
97% of new claims received full payment within 8 weeks of the payment due date.

This is an improvement.  According to the NAO report, in 2017 a quarter of new claims were not paid on time, and in March it was 21%.  However, it’s still woefully sub-standard.  The DWP has five weeks to process claims; the complexity of the system means that many claimants have already suffered delays before they get that far; by this account, some of them will not have received payment within three months.

Is it possible to do it faster?  Supplementary Benefit, a complex benefit delivered to cover more than six million claims a year without the benefit of computers, used to have a target of 14 days.  The Conservative minister Linda Chalker told Parliament in March 1980:

I should like to say a few words about our intentions. Regulations will be made to put the supplementary benefit position broadly on a par with the similar provisions for national insurance … That means that benefit officers will be required to determine new and repeat claims as far as is practicable within 14 days of the time when they are in possession of all the information necessary to make a determination. I emphasise that, as my right hon. Friend said in Committee, the vast majority of new and repeat claims for supplementary benefit are cleared well within the 14-day period. But I accept that regulations along the lines that I propose will serve as a useful reminder of the need for speed in resolving claims.

 

A few new books on social security

One of the disadvantages of being abroad has been that it’s been harder to get access to some recent books, and I’ve been taking the opportunity of the last week to catch up, using the resources of the National Library of Scotland.  First off is Welfare conditionality, by Beth Watts and Suzanne Fitpatrick (Routledge, 2018).  This is a short, insightful consideration of  conditionality,   distinguishing different kinds of conditions, attached to status, need and conduct.  The book’s main focus is in on behavioural conditions,  not just about social security but in other areas including social housing and homelessness; it also has a welcome discussion of the ethical issues.

Next is Understanding social security, a third edition edited by Jane Millar and Roy Sainsbury (Policy Press, 2018).  Like the earlier editions, it’s a collection of essays that fill in background information around the system, but it wouldn’t be much use to someone who did want to understand about social security, because doesn’t cover most of the main benefits, client groups or methods of distribution.  It woke up with an essay on ‘everyday life’ on benefits.

Then there are two books on Basic Income.  Malcolm Torry’s Why we need a Citizen’s Basic Income (Policy Press, 2018) is a second edition of Money for Everyone (2014)I think it’s much improved from the earlier edition, which reflects the depth of reading, the widening range of evidence and some practical proposals for how it might be introduced.  My reservations about the argument remain, however; I don’t think we can transfer evidence from countries where people are getting benefit for the first time to justify a scheme which proposes to take benefits away from many people.

The other book on UBI is a collection edited by Amy Downes and Stewart Lansley, It’s Basic Income (Policy Press, 2018).  This at least has some arguments against Basic Income, even if they get rather less treatment that the case for.  By comparison with the massive (and very expensive) anthology of essays collected by Widerquist and his colleagues, it’s rather less authoritative, but it’s accessible and wide-ranging, and it would be a good place for many students to start.   There are lots of gaps in the argument, about distribution, opportunity costs and universal services – Iain Gough’s explosion against the scheme from the Guardian is duplicated here – it would be helpful if some of the advocates addressed them.

I remain resolutely unimpressed by proposals for experiments that can’t possibly tell us what’s going to happen in the course of the next seventy years.  However, as Malcom Torry recognises in his book, we have already had basic income for families with children in Britain for forty years, and we already know  what the practical issues are (it works) and what the incentive effects are (none to speak of).

The fifth book is the bible, so to speak, or something slightly fatter: the new CPAG book, which I had delivered to Fife so I wouldn’t have to carry it back from Poland.  The first page covers the benefit rates, and I had a strong sense of déja vu; I’d seen this somewhere before.  Yes, it was the same as last year.