PIP is costing more than DLA did. Why is the OBR surprised?

Personal Independence Payment has proved to be more costly than the system it replaced.  If only we had realised, the Office for Budget Responsibility complains, we shouldn’t have accepted that PIP would deliver the savings that the DWP was predicting.

“At the time of its use in our December 2012 forecast, the results from [the DWP survey] appeared the best available guide to the assessment process. But hindsight has revealed several issues with the nature and use of the results …  including: the voluntary nature of participation; the hypothetical nature of the assessment; subsequent changes to assessment criteria; and a sample that was unlikely to be representative of new PIP claims. It is now clear that the results were biased rather than merely uncertain.”

Among the excuses, the OBR notes that the forecasts are subject to changes in the composition of the peopopulation which is making claims, legal challenges about the scope of the benefit, and changes in the way that benefits are delivered.

Oh, my: who’d have thought it?  Well, as it happens, I did.  I wrote in this blog on 15th December 2012:

I think the predictions are likely to be wrong. The common experience of selective benefits has been that when governments try to impose firmer boundaries, they are liable to discover that needs are deeper, more complex and more difficult to reject than they imagine. The distinction between the lower and middle care rates on DLA has always been confusing, and many people can argue persuasively for higher banding. There are new opportunities to include people with psychiatric disorders. And the PIP rules do not exclude the growing numbers of older people claiming DLA. Short term reductions have to be offset against the general trend, and as time goes on, inexorably, there will be pressure to extend protection. That happened with Single Payments, it happened with Incapacity Benefit, it has happened with DLA, and it will probably happen here, too.

 

A second referendum is not the way out of this mess

If there is a second referendum, there is no good reason to suppose that it will deliver the result that remainers hope for.  I’m basing that view not on opinion polls, but on some old-fashioned political science.  There is no such thing as ‘the will of the people’.  What there is, instead, is a mish-mash of different opinions.  Some people voted ‘leave’ because they were unhappy with the EU; some because they were opposed to immigration; some because they were against capitalism; some because they wanted to return to the 1950s; some because they wanted to give the government a kicking.  Some people voted remain because they like the EU; some because of self-interest; some to avoid disruption; some because of their judgment about the economy; and so on.  Lies or fear may have played a part, on either side, but that’s not decisive; nor is the fact that some people will feel empowered to vote leave, or that other people will strain themselves to get a different result this time.  The more complex an issue is, the more likely it becomes that people with different motivations and preferences will cancel each other out, and the closer the result moves to what you’d expect from a random distribution – a 50-50 split.

Once we start from that position, the result is statistically likely to be decided by a relatively small group of people with a strong, settled opinion, if there is no equivalent group on the other side to oppose them.  The source of this argument is L Penrose, The elementary statistics of majority voting, Journal of the Royal Statistical Society 1946.    Bartholomew and Bassett wrote, in Let’s look at the figures, that  “2,000 resolute voters in a population of just over one million can almost always get their way.”   (p 125)  And that’s what happened in 2016.   (There might well have been an equivalent group on the other side – Britons in Europe – but they were largely barred from taking part.)     It’s not the polls that count; it’s the mechanism by which the issue is to be decided.  And without very strong reasons to the contrary, we should expect the same mechanisms and the same process to produce the same result.

Monthly assessments for Universal Credit aren’t working

The High Court judgment on Universal Credit payments has implications beyond the immediate issues.  It condemns the DWP for simply following through an automated process for income testing rather than considering the actual circumstances of the claimants – in this case, the early payment of monthly salary.

When the idea of making assessments in ‘real time’ was first mooted, in 2010, I was critical of the idea.  In the course of the last eight years – yes, it’s that long – I’ve posted a range of comments about the effect of assessing income on the basis of the current month.   I’ve just been reading through my old posts to make a list:

  • it deals with uncertain information
  • it requires the system to process information that it doesn’t have  access to
  • it deals with information from diffuse sources
  • it’s not applicable to the circumstances of self-employed people
  • it puts claimants into default when things go wrong
  • the system can’t cope with irregularities in the calendar, like bank holidays or Februaries
  • it provides an income that is fluctuating, unstable and unpredictable.

To this, we can now add another point: mechanical calculation yields arbitrary and unreasonable results.

Surely, people in favour of means-testing might reasonably ask, there’s no real difference in principle between monthly assessment and the assessments we used to have?  That may be true.  Many of the problems we’re seeing are problems that we’ve known about for years.  They include:

  •  the problem of offering fluctuating incomes to people on very low incomes – a system, the Ombudsman commented about Tax Credits, fundamentally unsuited to the needs of low income families
  • the problems caused by tapers, which mean that people can’t tell when they’re entitled to benefits and when they aren’t
  • the problems posed by changes of circumstances, and
  • the devasting effect when changing entitlement to one benefit (such as Income Support) spills over into suspension or recalculaltion of another (such as Housing Benefit) .

Universal Credit, I’ve previously written, “brings together every major feature that has caused administrative meltdown in the course of the last forty years … It is as if the designers had painstakingly identified all of the elements of the benefit system that are known not to work and built the new benefit around them.”

 

The ‘rethink’ of Universal Credit doesn’t go very far

A couple of recent announcements suggest that planning Universal Credit has been subject to a “rethink“.  The actual changes amount to something less than that.  There is a delay in the rollout, which will affect those people currently being transferred from existing legacy benefits.  The largest group of people affected by the decision are those who are currently on Employment and Support Allowance, because that is the largest group of people of working age who receive benefits for longer periods.  Most people who were unemployed and in receipt of JSA have already been transferred, and anyone who signs off benefits and then needs to make a claim will have to claim through the Universal Credit.  Amber Rudd has said that even with the ‘pause’, the numbers of people receiving Universal Credit is expected to grow to three million in the normal course of events – more than double the existing figure.

The other major change has been the revision to the two-child policy, which limits support to the first two children.  That does not mean that two children will get fed when the third doesn’t; it means that every child in a larger family gets less support, and that is why the policy is exepcted to have such a large effect on child poverty.  The change is confined to children born before April 2017, which is why it will only benefit 15,000 families.

The treatment of Universal ‘Credit in the press has become increasingly critical, but I’m not sure that most have yet appreciated just how deep the hole is.  It doesn’t help that benefits are paid monthly, that it expects people to be online, or that strict and lengthy penalties are being applied for non-compliance, and the idea that people with no other income can have their benefits stopped for 5 weeks or more is simply outrageous.  Any of those could be stopped in short order. That would still leave us with all the other problems with the scheme.  MPs are well aware of those problems – their constituency surgeries are inundated with them.  The government is trying to offer enough tweaks to defuse the discontent.  It will take more than a few tweaks.

The NHS long-term plan for England is not really a ‘plan’

I’ve not been close to work with the NHS for some years, and I’ve been away from England rather longer; but I think I know what a plan looks like, and the NHS Long Term Plan isn’t it.  The supposed plan is a long, rambling shopping list, lacking in structure, priorities or the means of achieving any aspirations people might have.  It’s all very well to say that the service will “dissolve the divide between primary and community health services”, or that people will have “more personalised health care when they need it”, but we need to know why, how, and how we will know if it’s happened.

One of the implications of the lack of structure is that there will be no way to tell whether or not this document has made any difference.  Being told, in bold lettering,  that “The health  service will continue to support implementation and delivery of the government’s new five-year action plan on Antimicrobial Resistance” or that “every trust in England with a maternity and neonatal service will be part of the National Maternal and Neonatal Health Safety Collaborative” tells us nothing at all – and if those objectives aren’t achieved, the gaps will be covered up by the rubble from hundreds of other equivalent objectives which might be achieved on the whole, or in part, or not at all.    The problem with long lists of policies,  Aaron Wildavsky wrote in Speaking truth to power,  is that they become a way of burying the things that don’t get achieved – “mechanisms for avoiding rather than making choices”.  The NHS Long Term Plan doesn’t identify problems, aims, methods, process, outcomes, or how to get value for money.  That doesn’t inspire confidence for the future.

Thoughts for 2019

Richard Murphy has posted a rather gloomy blog entry, outlining many of the things going wrong in Europe and America.  He points, among other things, to Brexit, populism, growing inequality and economic and political instability. 2019, he thinks, ‘is going to be horrid’.  While I can’t gainsay any of the grim predictions he offers, I think there are other grounds for optimism, mainly from the developing world.

  • There have been marked improvements in the incomes of poor populations in many of the world’s poorest countries – among them China, Bangladesh, South East Asia, Latin America and the Middle East.  See the World Bank’s Atlas of Sustainable Development Goals.
  • Around the world, infant mortality is falling.  So is family size – one follows from the other.
  • Maternal mortality is falling.
  • Girls are much more likely to be engaged in primary education.
  • Social protection is being extended.  See The state of social protection 2018.  There is a still a long way to go, with less than 30% of the world’s population experiencing comprehensive social security provision, but safety nets have been spreading across the global South.

2019 might well be horrid, but it may not be quite as horrid for everyone as it threatens to be in the UK.  Happy New Year.

 

 

Universal Credit rolls out, despite the problems

Brexit has used up all the oxygen of political debate.  There are few proposed changes in policy for real life, but it’s important to realise that while all this has been going on politically, Universal Credit has been rolling out.  David Webster’s invaluable briefings on sanctions also tell us a lot about the process.

  • 1.3 million people are now on Universal Credit.  (The November figures make that more than 1.4m.)  With more than 100,000 new recipients each month, the numbers are increasing rapidly – even if it will still take four or five more years at that rate to reach the target figures.
  • 580,000 of the UC claimants are unemployed.  339,000 unemployed claimants are still in receipt of JSA.  That means that UC is now the main source of support for unemployed people.
  • 190,000 UC claimants are working.

That leaves 530,000 others to account for.  Most benefits for people of working age are there, not for unemployed people, but other people of working age.  As the numbers receiving UC continue to grow, that must mean that progressively higher proportions of people who are sick, or otherwise out of the labour market, will be receiving UC instead.  But the whole focus of UC, such as the requirement for people to form a claimant agreement with ‘work coaches’, is on the very small minority of people who are unemployed and unlikely to find work in their own right.  That can only mean that problems of UC get worse.

How May’s government messed things up

While it still seems likely to me that the withdrawal agreement will be ratified, in the absence of anything clearer, the current government bears a heavy responsibility for a botched negotiation.  Regardless of whether one supports the principle of leaving or staying, the government has made a series of unforced errors.  They include:

  • giving notice with no prior negotiation and no plan – they were warned against this by Ivan Rogers, the lead diplomat at the time;
  • agreeing to a timetable, in breach of the EU’s treaty obligations, which precluded adequate discussion of the future relationship;
  • going into the negotiation without any prepared documents, position papers or proposed legal texts;
  • refusing to discuss the issues with other parties or outside contributors – a process fundamental to building consensus;
  • the ‘red lines’, and the withdrawal from other agreements such as Euratom, which were not part of the brief from the referendum;
  • the abandonment of considerations of citizenship, which were treaty obligations on the EU rather than for the UK;
  • failure to engage the devolved governments in questions relating to devolution (the obvious way to avoid differentiating Northern Ireland from other assemblies within the United Kingdom); and
  • repeated attempts to prevent Parliament from debating the issues, to the point of being declared in contempt of parliament.

To make one such error is unfortunate; to make eight stretches some way beyond carelessness. This is, in sum, the least competent administration of my lifetime.

 

The Bank of England wants us to make sure the ship has lifeboats in case of need. It hasn’t asked us to man them.

The Bank of England has offered us a range of scenarios, anticipating potential outcomes from different types of Brexit, based on a long series of assumptions.  These, for example, are possible eventualities relating to unemployment:

Jacob Rees Mogg has been complaining about the ‘wild inaccuracies’ of previous Treasury forecasts.  That’s quite irrelevant.  A projection is a conditional statement, saying what will happen subject to certain assumptions; a scenario is an alternative possible future; a prediction is a statement about what will happen.  Projections and scenarios are not predictions.  Putting lifeboats on passenger ships is not based on a prediction about what is going to happen; it’s a preparation for a particular scenario.  It doesn’t mean the ship is sinking.  Mind, in this case it might be.

Some remarkable graphics from the World Bank

The World Bank has published a series of graphics outlining progress on the Sustainable Development Goals. I’m hopeful that this example will display properly on your systems and that you’ll be able to see what I’m seeing.  Click on the arrow in the centre to see the animation.

Among the many other insights, the graphs show that in many places boys are more likely to suffer malnutrition than girls, and that cash transfers – including unconditional cash transfers and pensions – are the most likely form of social protection to benefit the poorest.