Some responses to the consultation on social security

The responses to the Scottish consultation on social security have been  available online for about a month, but I’ve just got round to sifting through them.  I’ve not looked at most, because there are 460 of them, but what I have read reflects a great deal of thoughtful engagement, from individuals, professional groups, local authorities and the third sector.   (There are also some things to disagree with,  but I’ll leave people to find those for themselves.)

Here are some links to get you started:

It’s difficult to make sense of the submissions by reading them one by one – which is all that was possible at first.  The web page has been redesigned in a way that pretty much invites readers to enter a key term  – “cold weather”, “funerals”, “maternity”, “hearings” and so on – to see what people are saying about the topic.   However, that doesn’t work for every topic – there are 196 submissions with bits relating to assessments.  It also doesn’t show material from entries that have referred to evidence in PDF documents.  So, for example, the fullest discussion of Industrial Injuries benefits I’ve found so far is made by Thompsons Solicitors, but it doesn’t come up on a search.

The welfare cap is due to be breached

The ‘welfare cap’ was another wizard wheeze from the government that George Osborne hoped would embarrass opponents in the future.  The idea was to limit total spending on some benefits to a set figure, so that if the cap was exceeded, the government would then have to explain why.  There has just been a debate on the welfare cap, and (despite a particularly well-informed contribution from Ian Blackford of the SNP) it has said nothing much.  The motion approved in the House was this:

“this House agrees that the breach of the Welfare Cap in 2019-20 and 2020-21, due to higher forecast inflation and spend on disability benefits, is justified and that no further debate will be required in relation to this specific breach”.

There are good reasons, however, why expenditure on benefits should on occasions go up.  The main one is that many benefits are designed to go up when people’s incomes go down.  It’s also intriguing to note that the government is now expecting to spend more on disability benefits, when it initially claimed that PIP was going to save money (and fined Northern Ireland on that basis).

There is, of course, a simple way to make sure that the cap is not breached, and that would be to increase the level of anticipated expenditure to a more realistic figure.  But it’s far from clear that the global figure is telling us very much about what governments are doing.  Most benefits aren’t really ‘spent’ – they’re transfer payments, moving money from one person to another – and precious little work has been done to see if the global extent of transfers really has much impact on the broader economy.   It’s much more important what effects the benefits have on people’s lives.  In evidence to the Treasury committee yesterday , Chancellor Philip Hammond was refreshingly candid about the fact that he’d cut the living standards of people on low pay, and said directly that it was something the government had intended.

“We were elected on a manifesto that included the commitment to reduce welfare spend, particularly the spending of welfare on in-work benefits … self-evidently, the preponderance of people receiving in-work benefits will be in the lower income deciles. … At the heart of this is the decision to reduce spending on working-age welfare.” (16.21-22)

The Casey Review

I’ve just been reading the Casey Review, published on the 5th of this month.  It’s supposed to consider “opportunity and integration in our most isolated and deprived communities”.  It seems to be doing something quite different, because the main focus is not about that at all.  The primary focus is the relationship of minority ethnic groups (plus the rather odd addition of sexuality, which is a very different kind of issue) to the ‘British’ mainstream.  Deprivation and disadvantage don’t get much of a mention before chapter 6.

There’s a discontinuity, too, between the issues that the report is discussing and the measures which are proposed to respond to them.  One of the key proposals is to “Build local communities’ resilience”.  The issues being considered – for example, asylum seekers or illegal immigration – aren’t, by virtue of the numbers discussed,  necessarily capable of being linked to specific localities.    A second proposal is to ensure that people adopt “British” values, but that’s done without asking how those values related to issues of identity.  Integration is a matter of relationships, and relationships have at least two sides.

Martin Ravallion on The Economics of Poverty

I’ve just finished working my way through Martin Ravallion’s magnum opus, The economics of poverty (Oxford University Press, 2016).  Ravallion was the leading economist in this field for the World Bank, and is now a Professor of Economics at Georgetown.  For Ravallion, there have been two ‘poverty enlightenments’: the early nineteenth century, when economists started to address the problems, and the 1960s and 70s, when poverty was ‘rediscovered’ and many contemporary techniques were devised or refined.   There has been a third wave since then, as people have come to understand the multidimensional and relational character of poverty, the political and legal dimensions of the concept and the importance of voice and empowerment; but Ravallion doesn’t have much time for all that.   Multidimensional indicators are ‘mashups’, poverty is at best ‘weakly relative’ with an absolute core and the experience of poverty is individual.

There’s lots to disagree with, then.  Most of the book is a review of economic techniques for the analysis of anti-poverty programmes; occasionally it’s heavy going.  Ravallion is at his best in the section on impact evaluation, even if I disagree with much about the basic approach.  Ravallion is a true believer in the value of multivariate analysis; missing values can be filled in by the computer (p 158), and the influences on poverty can be identified by letting variables “‘fight it out’ statistically to determine how much each variable matters” (p 249).

There are a couple of sideways mentions of my book, The idea of poverty, and the joy of blogging is that I can reply.  Ravallion is critical of the contention that structural adjustment made things worse for poor people. I’ve written more about structural adjustment, but in the book in question I had written only this brief comment:

In the 1980s, the International Monetary Fund and the World Bank promoted ‘structural adjustment’, a particular model of economic reform for developing countries – creating opportunities for international business, imposing strict financial discipline, increasing inequality and cutting the public sector.  Even when this worked, it generally increased the vulnerability of the poor.  When it did not, it could have very detrimental effects, because it weakened investment in human capital and cut away the main social protections that poorer people might have had.

Ravallion comments:

The critics of adjustment efforts argued that they were externally imposed and ill-conceived agendas for reform. In the 1980s it was often claimed that these programs increased poverty and inequality and one still hears such claims. [Note 174:   For example, Spicker (2007, 127) asserts that these programs generally increased inequality and poverty.]  The claims were rarely based on good evidence and, by and large, they did not stand up well to more careful empirical scrutiny.

Well, I did write that “Even when this worked, it generally increased the vulnerability of the poor.”  And another poverty expert wrote this:

This success against extreme poverty has come with continuing vulnerability to aggregate economic contraction, with one-in-six people in the developing world now living between $2 and $3 per day.

I wrote that the programmes increased inequality, and the same expert wrote, with a reservation I’d accept, that

Better (in the sense of “pro-market”) institutions … offer some hope for poor people, but it must be judged a rather limited hope based on experience.  The favored institutions tend in practice  to perform less well for poorer people. … [S]uppose that reforming developing countries fall into two categories: those for which pre-reform controls on the economy benefited the rich, keeping inequality artificially high (arguably the case in much of Latin America up to the 1980s), and those in which the controls had the opposite effect, keeping inequality low (as in Eastern Europe and Central Asia prior to the 1990s). Then economic policy reforms can entail sizable redistribution between the poor and the rich, but in opposite directions.

The expert in question is, of course, Martin Ravallion, on pages 448, 409-10 and 439 of this book.

Why we should have some sympathy for Lord Howard

It’s been reported that Lord Howard, once a hardline Home Secretary who became briefly the leader of the Conservative Party, has had a little local difficulty with the law.  When his car was detected speeding, Lord Howard was unable to say whether he or his wife was driving.  It’s a route they drive frequently, the notice of committing an offence comes some time after the offence has been committed, and either of them could have been driving.   Lord Howard has been heavily penalised for not making the declaration, suffering a penal fine and extra points.  The two drivers had the same number of points;  they could have agreed a story between themselves; they could have lied.  They chose not to.  Instead, they gave the honest answer: we don’t know.

Regular readers of this blog will be ahead of me.  I’ve argued for years, sometimes to the bafflement of MPs and MSPs,  that people claiming social security can’t sensibly answer the questions that the authorities want to ask them.  People with disabilities can’t say whether they’re disabled or not (most of them get it wrong).  People who are forming a relatonship with someone else often can’t say when that person becomes a partner.  People who start work in our new, ‘flexible’ labour market may not  know whether they’ve got a job or not, or even if they’re going to be paid.   When they fail to answer the black-and-white question, or when they plump for the wrong answer, they’re penalised for it.  I trust that Lord Howard will now have the insight to champion their cause.

The NAO criticises the inconsistent application of sanctions

The National Audit Office has published a critical report on benefits sanctions. In 2015, 400,000 claimants were sanctioned, out of 3.5 million claimants of sanctionable benefits; the NAO reports that 24% of JSA claimants have been sanctioned.  The application of sanctions is not properly monitored,  and the DWP does not know what effect this is having.  The NAO raise doubts about consistency, accuracy and timeliness.  Their overall conclusion is this:

The Department has not used sanctions consistently. Referral rates vary substantially across jobcentres and providers, and have risen and fallen over time in ways that cannot be explained by changes in claimant compliance. While the Department is correcting errors earlier, it needs to do more to show that the quality of referrals and sanction decisions has improved. Our review of the available evidence suggests the Department’s use of sanctions is linked as much to management priorities and local staff discretion as it is to claimants’ behaviour.

The DWP, as is their wont, have blamed inconsistencies on the front line staff (p 26).  We should be careful what we wish for.  It’s perhaps worth putting this together with the information from the Couling Report, which denied (however implausibly) that the DWP had any centrally directed policy to impose sanctions or targets governing their number. If the DWP does as the NAO asks, it will have to.

There are much more serious concerns about sanctions than their inconsistent application.  There are reasons to question their purpose, their scope and their legality.  I hope that when the Public Accounts Committee will go further when they report on their inquiry.

Changing Universal Credit (again)

There are two days left for the consultation about limiting Tax Credits and Universal Credit to two children.  I’m not making a submission.  This is not a consultation about the policy, but about what exceptions should be made, including multiple births and the children of rape.  It’s a depressing process, which illustrates a general problem: if governments create stupid rules they then have even more problems to stop the anomalies  from spiralling out of control.

I’ve some sympathy for a comment made from the IFS in their work on the Autumn Statement, which included a change in the UC taper rate but maintained the swingeing cuts in the work allowance.  Stuart Adam pointed out that to date there have been four changes in the work allowance, one to childcare support and now one to the withdrawal rate.  It’s exceedingly difficult to know what the effect of cumulative small changes to Universal Credit will be, and maybe they shouldn’t be done unless we do.

 

 

Evidence to the Social Security Committee: too much water coming through and not enough fingers

On Thursday 17th, I was part of a group of academics giving verbal evidence to the Social Security Committee of the Scottish Parliament, concerning the future development of social security in Scotland.  The verbal record of the proceedings is here, in the section headed ‘Work Programme Priorities’ (that’s about the future work of the Committee, not the Work Programme).   There is also a full video of the committee (our discussion starts at 1:03).  As I can be fairly sure that most of you won’t read or listen to that discussion, here’s a shortened version of my opening statement:

… there is often a tendency to respond to the current set and diet of benefits as a laid table. The terms on which benefits are delivered always determine what it is possible to think about for the future, and it becomes extremely difficult to adapt to change or to anticipate change because of the huge pressure to make up for what has gone before. We saw that in relation to the bedroom tax … [and] tax credit cuts  … however, I am afraid that it will not be possible to deal with most of the cuts. Quite simply, there is too much water coming through the dyke and you do not have enough fingers.  …

It is important to look to the future and future priorities for the ways in which benefits are to be delivered in Scotland. There are some very large issues of huge importance coming at Scotland at great speed. The Scottish Government will take responsibility for what is, admittedly, a minor part of the total social security system but one that, nevertheless, represents a huge administrative, practical and financial challenge. That must be the priority for future work over the next five years.

In some ways, it is a minefield. Whatever happens—no matter how well the system works—we all know that, with a large system with multiple iterations that deals with tens of thousands or even hundreds of thousands of people, whatever can go wrong will go wrong, and the Scottish Government and the Scottish Parliament will get the blame when it does. We have to accept that as being part of the enterprise that we are engaged in. It is clearly important to try, as far as possible, to promote the kind of agenda that the Scottish Parliament has previously adopted relating to respect, dignity and fairness to ensure that the system works properly.

I know that it is tempting to focus on specific policies… I would argue that, rather than trying to adapt specific policies on each and every thing, the focus should be on something that is fundamental to everything, and certainly to dignity and respect: developing the administration and mechanics of benefit delivery.

There’s lots more in the full verbal report.

Redesigning funeral benefits

I was at a conference today on funeral poverty, part of the Scottish Government’s agenda for #fairerscotland.   The current system of support is very limited, and horrendously complicated.  There are five elements in a claim: 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.  I argued that the system could be simplified most effectively if we treated the liabilities and any claim as a matter for the estate of the dead person.  That position didn’t attract much support at first, but as the discussion went on more people saw the point of it.  This is virtually the only circumstance in the UK system where we directly oblige family members other than spouses to take on the financial liabilities of their adult relatives.

It’s always a pleasure to learn from people who know much more than I do, and the representatives from the organisations for funeral directors were particularly impressive, not just for their detailed knowledge but also for their sensitivity and awareness of the issues. Unfortunately, the profession isn’t well regulated, and I was shocked to hear of bodies in England being kept in the freezer for months until fees could be met – in one case, for 25 years.  Some problems can’t be solved by the market.  There’s a strong argument for decommodification, and while there will always be some elements of the process that depend on personal choice, there’s also a case for reducing the role of payments and charges, for example by direct provision of burial lairs or cremation.

 

Poverty as a wicked problem

CROP, the Comparative Research Programme on Poverty, has just published a poverty brief I wrote for them, on Poverty as a wicked problem.   In the brief I argue for a pragmatic approach to poverty, rather than an analytical one.  Poverty is a wicked issue – complex, multidimensional, unclear and changeable. There is not one problem to be addressed. If we are not dealing with a set, specific problem, or even a defined process, there is little point in chasing after definitive, mechanistic answers.   There are some common misunderstandings about anti-poverty policy. The first is the belief that we can prevent poverty by identifying and dealing with its causes, or the ‘generative mechanisms’ that lead to people being poor; this has led to a long series of bad policies. The second misconception is to suppose that if we know what causes the problems, we will know how to stop them; the way into a problem is not usually the way out of it. Neither position is tenable, and too often they have led policy astray.

The problems are not going to sit there waiting for someone to solve them, so that they can be picked off one by one; new problems and issues are arising all the time. Poverty is dynamic – constantly shifting and changing, as an enormous range of processes coincide and collide. One of the central insights offered by the emphasis on poverty as a multidimensional issue has been to emphasise the importance of the perceptions, experience and voice of people who suffer it, as a way of clarifying issues and developing priorities.