Social policy: commentary and updates

The DWP consultation on disability benefits: read it and despair

The DWP’s new Green Paper, Modernising support for independent living, could well be the most alarmingly misconceived document on social security I have witnessed during the tenure of the Conservative government, which in the era of Universal Credit is saying something. It displays a basic lack of understanding of how benefits for disability work and what they are there for.

Personal Independence Payment (PIP) was introduced in 2013 to provide non-means tested cash payments to disabled people and people with health conditions to help them live independent lives.

A brief history is in order. PIP was not a fundamental replacement of the previous system. It was a rebranding of Disability Living Allowance, or DLA, which itself brought together two existing benefits for people of working age: Attendance Allowance and Mobility Allowance.

None of those four was designed to promote independent living. That was the job of a completely different set of systems, initially pioneered by the Independent Living Fund, subsequently incorporated into the Griffiths reform of community care, and currently taking the form of personalised or ‘self-directed support’. There is a limited overlap, to the extent that people who are supported by community care may also get financial benefits, but most of the users of either system are not covered by the other.

PIP … is often described as an ‘extra costs benefit’. It is paid at various rates depending on the level of functional impact of a person’s disability or health condition.

Well, that was how both DLA and PIP were presented politically – but it’s not what they do, or what they were designed to do. The criteria for awards do not, and never have, depended on extra costs. They focused on the severity of the disability, which is something quite different. (The tenuous link to costs is explained in the DWP’s Equality Analysis on PIP, undertaken in 2017:

“PIP is a payment that is intended to be broadly proportionate to the overall need of a claimant. The greater someone’s need, all else being equal, the greater the cost they will face as they go about their daily lives.”)

If the benefits were not about costs, what were they supposed to be doing instead? That was made explicit at the time of the introduction of benefits for people with disabilities in the 1970s. It had become clear that people with disabilities, regardless of their status in other respects, suffered disadvantage throughout their working lives – not necessarily because they had additional costs, but because they were disabled. Alf Morris explained in Parliament:

“It is not only a question of finance we are discussing, but also the dignity of disabled people. … This is only one stage towards improving the financial status, and therefore the dignity, of every one of our severely disabled fellow citizens.”

The logic of not means-testing the benefits was that this disadvantage affected everyone with a disability.

Additional note, 23rd June This graph, from a report by the Resolution Foundation, shows what PIP actually does. Its principal role as a benefit is to do just what the benefits it was based on were meant to do: not meeting extra costs, but offering additional support for persistent low income.

In the United Kingdom, we have had a predominantly cash transfer system for extra costs since the introduction of Attendance Allowance and Mobility Allowance in the 1970s.

These were not ‘extra costs’ benefits, and no assessment was made to relate them to costs. (I should perhaps add that despite the name, Attendance Allowance was not given for attendance, but for severe disability.) In the past, there were two ‘extra costs’ benefits attached to Supplementary Benefit and Income Support: those took the form of “Exceptional Circumstances Additions” and “Exceptional Needs Payments” when they were part of Supplementary Benefit, and became ‘premiums’ when Income Support was introduced. Things have moved on since; the ‘legacy benefits’ are being eradicated, and these provisions are going with with them.

We know from research that people often use their PIP payments on core household expenditure (such as utility and housing costs). We also know that some disabled people view their PIP award as compensation for being disabled rather than as an award for extra costs.

This is one of the few statements in the review that recognises how social security actually works. Benefits are delivered as cash so that people can choose how to use them, and cash is ‘fungible’ – it gets lumped together with other cash.

We also know a certain amount about what applicants think about the disability benefits. One of the primary findings about DLA, shortly before it was renamed, was that applicants didn’t have much idea of what the criteria were, and if they were receiving other benefits were likely to think they ought to have a crack at it. The takeup of these benefits has been weak; people with disabilities do not necessarily think of themselves as ‘disabled’, and some say that they are disabled ‘sometimes’. It has not helped that the benefits have been lumped into a single, supposedly ‘working age’ benefit, and that assessments have often focused inappropriately on someone’s ability to work. There is a good case for smaller, more clearly defined benefits that might actually make some sense to the people who receive them – and, given the level of incomprehension that this DWP paper reveals, to the people responsible for delivering them.

We would like to understand whether some people receiving PIP who have lower, or no extra costs, may have better outcomes from improved access to treatment and support than from a cash payment.

This is disingenuous. If there is no cash payment, those people will be worse off financially, as the evidence mentioned in the previous quotation makes clear. That will be true regardless of whether their health care is enhanced.

We want to hear how the welfare system could be improved by exploring new approaches to providing support. These include:

Moving away from a fixed cash benefit system so people can receive more tailored support in line with their needs.
Moving towards a better join up of local services and a simpler way for individuals to access all forms of support and care, whilst reducing duplication, to better meet the needs of people with health conditions and disabilities.
Exploring alternative ways of supporting people to live independent and fulfilling lives. This could mean financial support being better targeted at people who have specific extra costs, but it could also involve improved support of other kinds, such as physical or mental health treatment, leading to better outcomes.

In every particular, this refers to the objectives of the system of social care, not benefits for disability. The thorough-going replacement of the objectives of the existing benefit system by the system of community care could potentially imply an expansion of community care – but it also implies, no less, the virtual abolition of the system of social security benefits for people with disabilities.

The Resolution Foundation loses sight of what Universal Credit is really like

I listened on Monday to a discussion at the Resolution Foundation of a new report, In Credit. The participants seemed on the whole convinced by the proposition that UC has simplified the system, that the process of digitisation has worked well (especially in the pandemic) and that the central issues now concerned the adequacy of the benefits rather than the design of the system. At the same time, reports from other organisations point to serious structural problems with the benefit. An outstanding report from CPAG goes methodically through the processes of claiming, decision making, official communications and failures in the management of disputes. And research from Bath University’s Institute for Policy Research criticises the rigidity of the assessment system and the drastic volatility and unpredictability of the income that is being provided. “Monthly fluctuations in UC were ubiquitous, frequent and sometimes very large. ”

Someone has to have got this wrong, and in my view, it’s the Resolution Foundation. They acknowledge that there were ‘teething problems’ at the outset. It’s much worse than that. The early years were a complete disaster, which is why the programme had to be ‘reset’ and massively overspent, but the system failed then, and has failed ever since, to meet any of its declared objectives. I’m not going to go through everything I’ve said about this on this blog, but here are a few salient points.

The declared aims of Universal Credit have shifted frequently over time, but in general they were claimed to be:

the simplification of the system
reducing fraud and error,
reducing worklessness, and
improving work incentives.

Other objectives have included:

reducing the cost of the welfare system
rewarding work and encouraging personal responsibility
reducing poverty
smoothing transitions in and out of work
improved efficiency through automation
personalising benefits through a tailored response.

Every one of those objectives has been a failure. I’ve previously presented evidence about each of them. There have been critical reports from the House of Commons, the House of Lords and the National Audit Office, and specific rebuttals of the positive spin put on them by the DWP.

The main thing to add since I made that argument has been the question of how things changed with the pandemic. According to the Resolution Foundation report, “the system garnered praise during the pandemic for its ability to cope with a huge increase in claimant numbers with minimal delays.” I seem to remember something different. The first thing is that the social security system had coped before with massive increases in claimant numbers. The second point is that in the early stages of the pandemic, the system didn’t cope: it locked up. Here’s a reminder.

When UC eventually did catch up, it was at the cost of substantial delay, uncertainy, error and fraud.

So – how has UC fared? It has failed to simplify. Its digitisation has been clumsy and inappropriate to claimants’ circumstances. As for ‘incentives’, the policy-makers have lost sight of the main purposes of the benefits system, which have little do with work. And, in the process, we have lost sight of the need for a basic benefit that can at least ensure that people are not malnourished, destitute or in despair.

Defining hate crimes

The Hate Crime and Public Order (Scotland) Act 2021 has attracted a great deal of criticism, much of it missing the point. The Act does three things. It consolidates existing laws about hate crimes, while abolishing the ancient offence of blasphemy. Second, it extends protection from “threatening or abusive” behaviour to a number of protected characteristics, including religion, gender identity, age and disability. (Race and sexuality were already protected under previous legislation.) Third, it takes the idea of public order into the private sphere: in a world where people can send messages to thousands from the comfort of their living room sofa, the old definitions of public space don’t work any more.

The Act has some clear defects. The most obvious, following Joanne Rowling’s furious exchanges with online trolls, is its failure to protect women from abuse. Only slightly less obvious is the question of reasonableness: the police have already been inundated with thousands of complaints that presumably seem reasonable to the complainers but not to people who don’t share their world view. (There is some reason to believe, too, that many of those complaints are vexatious – aimed at making a political point, rather than offering evidence of threat.) A third is that the offence of ‘stirring up’ hatred relates specifically to groups: threatening or abusing an individual person on the basis of their character or identity is left to previous legislation.

Another problem, which is regrettably intrinsic to the subject, is that threats are often delivered obliquely. Holocaust denial has been a common route; the world ruled by shapeshifting lizards less common, but nevertheless a cause for concern. The idea that it’s somehow acceptable to go to a random kosher delicatessen and ask about conduct of the Israeli Defence Force comes close. That’s not, however, a reason not to legislate – it’s proof that protection is needed.

Some of the criticisms, however, are illegitimate. One is the idea that responding to threatening or abusive behaviour is beyond anyone’s competence. Another is the argument that this is an infringement of ‘free speech’. Freedom of speech is not a right to say whatever one pleases, and it never has been. I’ve reviewed the arguments about this in a previous blog, so I won’t repeat it all here. In UK law, common restraints on free speech have included laws about public order, libel, blasphemy, incitement and conspiracy. Whether speech is restricted or not depends on what is said, where and when. Words can kill.

Trans: where both sides go wrong

As a social scientist, I’m approaching this topic with some trepidation. There’s a lot of heat being generated on both sides and people are not just getting things wrong, they’re doing it at the top of their voices.

‘Gender’ and ‘sex’ are inter-related, but they’re not wholly equivalent. We mainly use ‘sex’ to refer to biological males and females, while ‘gender’ refers, not just to physiology, but to a set of social facts. It should be obvious enough what a ‘social fact’ is, but the debate has become muddied. We’re surrounded by social facts – things that are true because society is constructed to make them true. Law, finance, morality and property ownership are all examples of social facts. Gender is like that, too. It’s based on a complex and extensive set of norms, developed through a well-established process of socialisation – education, upbringing, shared perceptions and socially defined norms.

The Scottish Goverment got itself in an awful muddle when it assumed that ‘gender’ is subjective and that ‘identity’ is something we choose. Social facts aren’t subjective – they’re social. You can present yourself however you please, but it won’t change the speed limit, the amount of money you have in your bank account or your educational qualifications. Nor will it change your gender. That’s something that can only happen after a long, difficult process of re-socialisation, and some people are uncertain it can be done at all.

So, where do the protagonists go wrong? On the gender-critical side, the protagonists have been driven to a point where they argue that it’s mainly about biology. Kathleen Stock’s Material Girls is an example. Biology certainly plays a part, but Stock’s reductionism comes perilously close to a denial of gender roles. I know there’s a school of thought in psychology that holds that everything we do is genetically determined – last week, for example, I came across a completely daft article that claimed that whether or not people have health insurance is down to their genes – but we need to understand that gender is highly socialised. Take a simple example: in our society, men are more likely to interrupt women speaking than vice-versa. This is not about biology. The point is that people raised as men have been socialised to behave in a different way to people raised as women. And we might well note that some of the voices of trans women – people who’ve been raised as men – are still given to speaking over women.

On the other side of the argument, nominally pro-trans, there’s been a tendency to over-simplify in the opposite direction. The most vocal advocates for trans claim that ‘trans women are women’. The underlying assumption seems to be that there are only two categories that matter, men and women. That leads to the proposition that people who do not fit one binary category must be redefined in terms of its opposite – with the consequence that trans people are expected to perform gender-based roles that may be inconsistent with their circumstances or capacities. There’s no space left along a wide spectrum, let alone an acceptance that quite a few people find themselves somewhere in the middle.

A valuable report for the Scottish Trans Alliance offers a different perspective. It considers the experience of people who feel they fit neither category – people who are ‘non-binary’. The respondents used a wide range of terms to describe their position, but more than 80% were concerned that their gender identity simply wasn’t valid. The respondents expressed their discomfort about being pressed into the wrong categories: “I find that most services can just about cope with the idea that you are transgender … but being non-binary is still beyond a lot of people’s comprehension.” Liberals should uphold the ‘dignity of difference’ – but the thing about being different is that people are different because they’re not the same. I suspect that, in time to come, the binary position that is being advocated by some activists will be seen as crude, reductionist and failing to represent diversity.

Note that I haven’t said anything about hate crime yet. That’s for another blog.

Reparations for historical wrongs can’t be fair

I attended an online session recently in which some academics were making a principled argument for reparations for slavery and colonialism. The argument is simple enough. Both slavery and colonialism did terrible things. People are still suffering as a result. The countries that perpetrated those wrongs should pay reparations to redress the balance.

I understand why people want to make this argument. There have been historical wrongs, and there is continuing disavantage as a result. I also think that they are profoundly muddled. There is no possible way for reparations to be done fairly.

My objections rest on four points of concern. The first question to consider is remoteness. Do people merit compensation for something that has been done, not to them, but to their ancestors? To what extent are people responsible for the sins of their parents? Their grandparents? The seventh generation? This isn’t some obscure philosophical point. Jamaica has asked Britain to compensate them for slavery – which was substantially abolished in the colony in 1834 (some time after the 1807 abolition in Britain). Many of the wrongs that have been done to indigenous peoples date from the long nineteenth century. Some of them happened centuries ago. African slavers sold their compatriots into slavery in the New World. Should their descendants be paying compensation to their descendants in the USA? Where does this end? Where do we draw the line?

Second: who is liable? If the issue is viewed collectively, the implication is that anyone who has become part of the collective becomes liable for that collective’s past actions. One of the characteristic features of colonial powers is that often they brought in people from the lands they had colonised. That’s how populations of people of South Asian or Afro-Caribbean descent developed in the UK, and Muslims in France or Russia. If “Britain” is treated collectively for the purposes of reparations, those reparations will come, not from the concealed coffers of perpetrators, but from a population that according to the 2021 census includes fully a quarter of people who do not identify as ‘white’ and English, Scottish, Welsh, Northern Irish or “British”. About one in six people were not born in the UK. Should the Windrush generation, and those with a Caribbean heritage, pay reparations to Jamaica? Because that’s an inherent part of what Jamaica’s demands for reparations would entail.

The third problem concerns injustice. Human history everywhere has been marred by oppression. The East India Company, the Highland clearances, the Irish famine, the treatment of the poor, the dispossession of indigenous peoples, the pogroms, the wars, the genocides – there’s no end to it, and nowhere to stop. The ancestors of the vast majority of people, in almost any country you can name, have been the victims of oppression. It follows from that that any historic reparations will have to be made by or on behalf of people who have been the victims of oppression, as well as people inheriting from the oppressors – and the inheritors of victims will be in the majority. This isn’t a bit of “what aboutery”; if it was just that, a partial redress it could still help to correct some illegitimate disadvantage. The problem is much more fundamental. There is hardly anywhere in the world where the current distribution has not been influenced by injustice, oppression, exploitation or denial of rights: most of humanity have been treated badly for most of history. No measures can be taken that are not also in effect measures taken against people whose ancestors have also been the victims of injustice.

Fourth, past wrongs are a poor guide to present injustices. Consider some of the large-scale forced migrations that have taken place in the course of the twentieth century: the partition of India, which displaced twenty million people and almost certainly led to a million deaths; the displacement and exchange of up to 20 million people in Germany, Poland and Ukraine in the period immediately following the Second World War; the mass expulsion and displacement of 1.6 million Greeks and Turks. We tend to ignore much of this, although it is all relatively recent, either because it is considered less important than other historical wrongs (which should be a source of moral outrage), or because so much has been done to improve the lives of their children and grandchildren. If some groups are suffering injustice now, that is surely the responsibility of those who are responsible for addressing that injustice now – and that is a matter for contemporary governments, the people who have the power to redress that injustice now. The alternative, of course, is to address one form of disadvantage in the hope that it will reduce other related problems. If so, what distinction should we draw between people who are the inheritors of historic injustice, people who are migrants from poor countries, and people who are poor now because of indequate incomes? And what on earth makes us think that we have the knowledge, moral authority, competence or technical capacity to make such distinctions?

There are, then, four fundamental objections to the argument for reparations.

People can’t be held morally responsible for the actions of their distant ancestors, either individually or collectively.
We cannot distinguish people who are liable from those who are not liable. Are we really going to make people descended from slaves liable for compensating the slavery their ancestors endured?
We cannot fairly take account of historical injustice, as opposed to injustice now.
We cannot unmake the history of the world.

There is every reason to argue that people who are treated badly should be treated better. Wherever people are disadvantaged, there is a case to redress the balance, but that case is based in disadvantage now, not the ill-treatment of the past. The world is as it is; what matters is what we do next.

Plunder: the scandal of private equity

A little over two years ago, I wrote a short piece on this blog about the dangerously precarious funding of residential care. At the time, I didn’t realise how pervasive the financial model had become. I’ve recently read an account from the USA by Brendan Ballou, called Plunder (PublicAffairs, New York, 2023), which discusses just these problems. (Full disclosure – I was given a signed copy of the book, by way of the author’s sister. ) Private equity firms have developed a business model which battens on to, and ultimately destroys, profitable businesses – and, when they get the opportunity, privatised public services. Examples in the UK include not just residential care, but the water companies, rail franchises, energy and health care.

The methods adopted by these companies include

Leveraged purchases: firms and assets are acquired by borrowed money, and it becomes the responsibility of the firm that has been taken over to repay the debt.
Further debt. Beyond the cost of purchase, firms are then put into further debt in order to increase the rate of return to the controlling financiers.
Leaseback. The assets of firms are transferred to other companies and the firms are then required to pay rent in order to use the facilities they used to own.
Fee structures. Firms are required to pay further liabilities for services provider by their purhaser, typically including fees for transactions, management, consultancy, ICT and payroll management
Tax avoidance. The returns from this milking machine are diverted through tax havens. If they are submitted to taxation, it is done through the most advantageous tax regime, such as the limited taxes on capital gains rather than taxes on income.
Pension funds. Some firms have raided their pension funds directly – it is a common element in bankruptcy proceedings – but it is also done by directing the investments made by pension funds towards support for the firm.
Nested firms. It has become common for firms to be owned by other firms. These structures are opaque. The effect of separating out each function within a business is to make it possible to cook the books, so that profits disappear through cross-charging.
Limited liability. Many firms which have been drained through these procedures go bankrupt. The construction of laws relating to bankruptcy and limited liability mean that those responsible can avoid all liability to meet their debts or obligations. make it legally possible for subordinate businesses to become bankrupt without leaving any liability to the parent firm.
Aggressive – and effective – lobbying. Ballou makes the point that these firms have bought extensive influence without incurring the duties of transparency and reporting that public firms have to meet.

Most of the options that Ballou considers for reining this in are geared to the pecularities of the American legal system, such as anti-trust legislation; I think they have a very limited potential in the UK. It seems to me that we need to consider a number of changes in the law:

preventing beneficial owners from claiming limited liability for default. If the subordinate firm goes bankrupt, the beneficial owner should either be fully liable or themselves go bankrupt.
taxing firms on turnover rather than profit.
equalising capital gains tax with the rates of income tax.
treating pension funds not as a liability, but as something in the unqualified ownership of the beneficiaries. If you leave your shoes for repair and the repairer goes bankrupt, the repairer is a bailee, and you can get your shoes back. Beneficiaries have to be treated not as creditors but as owners, and the firm as a bailee of those beneficiaries.

I know this falls some way short of dealing with a major, endemic problem, one which has come to threaten not just the public services but, by Ballou’s account, the whole structure of the market economy. I’d be grateful for further suggestions – I’d be happy to revise this blog, or to return to the subject with better ideas.

Universal Credit: the gift that keeps on taking away

I’ve been ploughing through a long, complex but very worthwhile report from CPAG, which examines the effect of the digital administration of Universal Credit on the way that people experience the system. It focuses on the scheme’s serious deficiencies in transparency, procedural fairness and lawfulness.

First, there are the problems relating to claims. Thje system absolutely insists that people fill it in perfectly and in line with the expectations of administrators. It can’t cope with incomplete information, such as people not having a bank account, and doesn’t have the options the process needs for people to get round the blocks. Standard additions, exemptions and exceptions aren’t considered. The system can’t manage backdating or claims made in advance (for example, for someone leaving care).

Second, there is the problem of decisions. The DWP has sailed ahead regardless of the notices it is supposed to give or the need to fix problems that come from clearly incorrect assessments. The absurd pretensions of tracking income in ‘real time’ are still subject to wildly inconsistent arbitrary calculations based on calendar dates – the courts have repeatedly taken the DWP to task about this. There are widespread problems of claims being closed without due consideration, obstructing further action or the ability to revive and correct the details.

Third, there are the issues of communication: incomprehensible calculations, failure to inform people of their entitlements, and frequent failure to give the information required by law.

Fourth, there is the management of disputes. The process for “mandatory reconsideration”, itself a deliberate obstacle to access to justice, is protected by stonewalling, where DWP officials refuse to register requests or let claimants ask for redress.

It seems all too clear that, nearly thirteen years after the scheme was adopted, the many deficiencies of the computer programme have still not been sorted, and the benefit continues to fail in many major respects.

This is not the way to develop social care

I was listening this morning to a thoroughly depressing discussion on social care. A major part of the way the issue has been framed is, apparently, to encourage migration so that migrants can fill the roles that need to be provided. The other was to point to the supposedly five and a half million people receiving ‘out of work’ benefits, a figure that includes, as far as I can tell, four million people who are either too sick to work, in work on low pay or who already have caring responsibilities, and demand that they provide social care on a minimum wage. The underlying message seems to be that care is unskilled, and anyone can do it.

If we look at the way that social care is being provided, the picture is very mixed. The delivery of services has been shaped to match the criteria of commercial markets: individuated services, priced distinctly by activity. So we get tick-box lists of what needs to be done, masquerading as an assessment: dressing people, cutting their fingernails, brushing their teeth and so on. Some of the activities are paid for, and counted as nursing care; others are based on reported needs that, in their nature, are typically out of date. I’ve argued, in How to Fix the Welfare State, for a different (and admittedly rather more expensive) approach: providing teams of professionals who are paid for blocks of time, rather than specifically costed activities, who within that time can identify and negotiate services with the people who receive them. To do that, social care needs a professional structure – including training and qualification – and a pay structure that is commensurate with the skills that are required. We have a long way to go before we get there.

In praise of the triple lock

The ‘triple lock’ is the name given to a commitment to maintain and improve the value of state pensions. The table comes from a recent report by the Institute for Fiscal Studies.

In the course of the last twelve years, this has meant that pensions have increased by a nominal 60%, while if they had only increased by inflation, they would be up 42%. Putting that another way, pensions have risen by 12.7% over inflation (that is, 160/142), which in real terms is 1% a year.

One might suppose that ratcheting pensions up, however slowly, was a praiseworthy thing to do, but the principle has come under fire from those who claim that it represents an unsustainable commitment. The criticism has been fed by the IFS report, which argues that it creates ‘uncertainty’ about the future value of state pensions, and that if it is left in place till 2050, it will increase the value of the state Pension from about 25% of median earnings to something between 26% and 32%.

The first of these arguments is, frankly, codswallop. The benefits system is in a parlous state: the main ‘uncertainty’ it is creating is whether or not people will be able to eat. Improving the value of the pension does not increase uncertainty; it reduces it. If we are genuinely concerned about the narrower problem of how people plan their pensions for the future, the main ‘uncertainties’ come from the govenment’s eccentric reliance on means-testing and the desperate problem of paying for social care.

The second argument invites the obvious retort – so what? A modest increase in the value of pensions, relative to the median wage, is surely a good thing. The UK’s treatment of pensioners is, by international statndards, parsimonious. Consider this graph from the OECD. It puts the percentage of GDP spent on pensions in the UK at 5.1%. The Office for Budget Responsibility, which works on a slightly different set of definitions and takes into account a few extra benefits, estimates that this year, the percentage will be – try not to be too shocked – 5.3%.

<a href="https://data.oecd.org/chart/7bkr" target="_blank" rel="noopener">OECD Chart: Pension spending, Public, % of GDP, Annual, 2021</a>

https://data.oecd.org/socialexp/pension-spending.htm

The State Pension provides, at best, a modest basic income. The (somewhat limited) success of the triple lock is something to applaud, not to denigrate. One might wish that the the same approach could be taken for the painfully inadequate benefits offered to people of working age.

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