The ‘pensions timebomb’: don’t panic!

There are reports today that an independent Scotland would face a ‘timebomb’ from increasing numbers of older people.  Scotland on Sunday mangled the figures when it reported that “an independent Scotland would have to increase the proportion of GDP spent on welfare from the current level of 14.4 per cent to around half.”  That would be three-and-half times current spending.  This is obviously wrong, but I’m not going to criticise – one of the hard lessons I’ve learned from writing this blog is that it’s all too easy to jumble figures from different calculations  before hitting the ‘send’ button.  (And yes, I confess, I just did that again on the first version of this very post.)

The actual increase that’s being reported is that the ratio of pensioners to workers will double, going from 25.8 pensioners per 100 workers to 51.7 by the year 2060.   (The figure for the rest of the UK is 45.9).   If that is translated into public expenditure at current rates – which probably won’t happen – it implies that two workers will need to pay for pensions what four workers pay now.  As pensions currently cost half  the ‘welfare’ budget, that implies a 50% increase in that budget, not a 250% increase.  There’ll be increased calls on health and social care, too.  These are contingencies that need to be planned for, but none of them is catastrophic.

I’ve previously considered the general principles of managing the costs of an ageing population in this blog.

Universal Credit delayed

The announcement that the pilots of Universal Credit have been delayed has to be welcome. The scheme was due to run in four pilot areas; three of those four will now start in July instead of April. The delay has been described as an ’embarrassing setback’, but there are worse forms of embarrassment. The scheme was supposed to start for new claimants in October, and over the next four years it is still scheduled to run for well over eight million people. The more that can be done to reduce the possibility of things going wrong, the better it will be for those people. This is not a race.

Reclaiming individualism

Reclaiming individualismMy latest book, Reclaiming Individualism, has just shipped. At present it’s available only in hardback.

Individualism used to be a radical idea; it was a way of asserting the rights, dignity and value of each and every person. That was before it was dragged into a back alley and stripped of its valuables. For many people nowadays, individualism has become a defence of privilege – a cornerstone of arguments for unrestricted markets, privatisation and the commodification of everything. In Reclaiming Individualism, I make a case for a different balance, trying to show how individualism can be taken to argue for welfare, empowerment and government for the people.

Has the Universal Credit scheme already failed?

At the same time as a stream of reassurances has been issuing from Ministers, the DWP and the project team, The Guardian is reporting that the project to implement Universal Credit has stalled, and that staff have been stood down. They cannot all be right. Although personally I lean towards a glum outlook, the government could still save its face without too much effort. Universal Credit has not really been designed as a unified system – it sticks together a number of existing benefits, most of which already have common rules and structures. So it has always been open to the Government to say, here is Universal Credit (Jobseekers Allowance), Universal Credit (Employment and Support Allowance) and so on, claiming to have introduced an integrated system when all they have really done is to rename the benefits. True, that would not give us an integrated system, responding to millions of people individually in real time – but the idea it could was always a fantasy.

If it’s not 70 sq ft, it’s not a bedroom

Special note, 12th December, 2014.  The argument I made here in the last paragraph has been considered by the Upper Tribunal and rejected.  See this link for an explanation.  However, the decision of the Upper Tribunal also says two other things:  that it is not up to the landlord to decide and there must be an inspection of the room, without which no imposition of the bedroom tax is lawful.

Further note, 3rd April 2016:  The Upper Tribunal has now decided that to be a bedroom, a room “…should be capable of accommodating a single adult bed, a bedside table and somewhere to store clothes … , as well as providing space for dressing and undressing.”  Joe Haldeman has calculated this to imply an absolute minimum of 65.81 sq ft, and more depending on the layout of the room.

The new under-occupancy rules will mean that people will have their benefits cut when they are deemed to be occupying property that is too large for their family size. This will affect benefits for hundreds of thousands of people – the estimates for Scotland alone run between 80,000 and 105,000 tenants of social housing.

The standard that is being applied is the 1960 bedroom standard, introduced in 1960 for the Social Survey (the first use was in P Gray, R Russell, 1960, The housing situation in 1960, Central Office of Information.) This was intended. more than fifty years ago, to be used in place of the restrictive standard in the Public Health Acts (1936 and 1957).

It’s been reported that Knowsley Housing Trust are in the process of reclassifying the size and type of their bedrooms. This is not as radical as it sounds; they are only reclassifying 566 properties in a stock of 14,000. When I was letting council housing in the 1970s, I had to reclassify properties to help house larger families. Most local authorities had only two- and three-bedroomed properties; very few properties had four bedrooms or more. So where a three bedroom property had a dining room or a ‘front kitchen’ area, reclassifying a downstairs room as a bedroom made sense. Later, a housing association committee I was on routinely arranged for permitted storage space with walk-in cupboards to be pooled, to make something that could be used as a boxroom or small bedroom. If revisiting those classifications means that people can afford the rent, it’s worth doing.

Beyond that, there’s another standard to take into account. For the purposes of the 1936 Public Health Act, there was a minimum size of bedroom. No room less than 50 sq ft (4.65 sq metres) was allowable as a bedroom; any room between 50 and 70 sq ft was classified as a half-person bedroom (only suitable for one child under 10); any part of a room less than 5 feet in height should be disregarded. The 1936 space standard is now contained in England in the Housing Act 1985, s.326 and in Scotland in the Housing (Scotland) Act 1987, s 137. This is still the law. It can’t be claimed that a standard designed for one purpose is conclusive in a different context, but there is at least a reasonable case to make that we know what should be counted as a bedroom, and what should not. If a room is not at least 110 sq ft (10.2 square metres), it’s not big enough for two people over ten, and if it’s not at least 70 sq ft (6.5 square metres), it should not be counted as a bedroom at all.

Additional note, 10th September:  A recent tribunal case in Fife permitted a challenge to the definition of a bedroom, discounting a room that was 67 sq ft with a combed ceiling.   This is not authoritative but does indicate that the definition of a room is open to challenge.

The British believe in contributions, apparently

An intriguing pamphlet from the Policy Network compares attitudes to benefits in Britain, France and Denmark. Their main point is that other countries have a greater commitment to ‘social investment’, but apart from that they also have material on social attitudes to benefits and services. Question 1 asks whether benefits hould be targeted at those in need, confined to those who have contributed or available to every citizen. In Britain, 48% of people said that pensions should be for those who contributed; 41%, social housing; 49%, unemployment benefits. Then question 2 asks what the main response of the government should be to financial problems: and only 24% say that benefits should be limited to people who have contributed. There is a fairly marked discrepancy here, which might be taken in three ways. One possibility, though I think it’s unlikely, is that people thought rapidly about counter-examples. A second explanation is that the responses defend what people suppose to be true at present – pensions are contributory, unemployment benefits used to be, and even if social housing has never been, some public authorities used to house people according to their ‘merits’, including contributions such as military service. The third explanation, which is most likely, is that the opinion is soft-centred, and there is something in the way the questions are worded that has led to an inconsistent response.

How not to choose a Chief Executive

Fife, where I live, is advertising for a new Chief Executive for the Council. According to the advertisement:

  • “We are looking for a driven and ambitious leader with a proven record as a strategic thinker and change manager.”
  • “A key early task will be to ensure the smooth introduction of the integrated Social Care and Health model.”
  • “You will deepen the Council’s commitment to the values of Performance, Efficiency, Customer Care and Staff Empowerment …”

The first problem here is a misunderstanding of the role. The work of a Chief Executive is explained in a SOLACE report, Leadership United. Much of the work is about accountability to an elected council in a political environment. The Chief Executive is the key connection between councillors and the administration. The Chief Executive speaks for the council officers, and consequently much of the work of a Chief Executive is outward-facing, including external relations, relationships with other agencies and relationships with the public. Then there is management of the corporate team. Only a very limited part of the task is concerned directly with the internal performance of Council departments, and that is mainly done through established systems of accountability. The Chief Executive is not the main person responsible for integrating health and social services. The specification of this post is hopelessly misconceived.

The second problem is that they are looking for the wrong values. There is nothing here about public service, democratic governance, citizenship or rights. There is no expectation that a Chief Executive should listen to public concerns, or engage with them.

The third problem is a misstatement of the type of person they should be looking for. Driven? Ambitious? Are the Council looking for The Apprentice? I had occasion to comment yesterday about the missplaced emphasis on “leadership” in the NHS; the same pernicious doctrine has infected local authorities (and that would be my main criticism of the SOLACE report). In a democracy, the role of leadership properly belongs to elected authority. A Chief Executive is, first and foremost, a public servant, and anyone who doesn’t understand what that means shouldn’t be allowed within 300 metres of public responsibility.

The Francis Report

Although the situations considered in the Francis report are shocking, the situation they describe is all too familiar. The scandalous ill-treatment of patients was a recurring problem of long-stay institutions – reflected for example in Sans Everything (1967) and a string of scandals in mental institutions, detailed at length in J Martin, Hospitals in Trouble (1984), a book cited in this inquiry report. Nearly thirty five years ago, as a student, I was given an advance copy of the Normansfield report by Brian Abel-Smith; it described how patients were restricted and neglected, and the upper echelons of NHS management did nothing about it. David Ennals explained, in Parliament: “… the report makes clear that there were many people who knew just what the position was. Some of them were in positions of authority with power to act but they failed.” In other words, we have been here before. The main difference is that this time it’s in acute care.

Unfortunately, the Francis report does not point to the way out of the problems. There are some hard-hitting passages – given the findings, there had to be – but there’s an awful lot of words in between. At nearly 1800 pages, the report is rather badly written – indiscriminate, repetitive, with some slushy, mystical twaddle about leadership (the stuff about it being a quality of the ‘spirit’ is in there twice) and an 125-page “Executive Summary” (someone should have taken the learned chairman into a corner and explained what that phrase is supposed to mean). The review of evidence in volume 1 is generally good; Volume 2 spends several hundred pages reviewing what regulatory and supervisory agencies did not do, and is interminable; the review of general issues in volume 3 is long, prescriptive and often preachy. The sheer number of words guarantees however that it won’t be read.

The stuff on leadership presents the most obvious problem. This report uses the word more than 800 times, referring to leadership haphazardly whenever it wants to think about the position of people in charge, senior management, ward management, roles in professional settings, personal qualities, motivation, or relationships with juniors. The poisonous cult of leadership, and the assumption that people in charge should energetically push others to share their values and aims, is part of what’s created this mess in the first place. What the report is really describing is systemic failure, and systemic failure cannot be responded to through on an individualistic basis without gaps being left.

Another way to pay for welfare

The veteran US journalist, George Will, has commented that there seems to be a new political consensus in the US: that “we should have a large, generous welfare state and not pay for it.” There is an uncomfortable truth in that observation, and it prompted me to think about whether there might not be ways to square the circle – to provide welfare without seeming to pay for it.

There are lots of ways of raising money besides taxation: they include mutualist contributions (many welfare systems are non-governmental), voluntary payments (e.g. lotteries), nationalisation and sequestration (governments can, and do, claim or confiscate resources), and raising other government revenue (e.g. returns on investment, profits on government enterprise, or the sale of resources). The last of these categories is possibly the most interesting: if governments can make a profit, for example out of banking, energy or telecommunications, the money can be used for the common good. The Alaska Permanent Fund – possibly a model for Scotland – has allowed the State of Alaska to save resources for the long-term benefit of its people. It appears to be a principle that even American Republicans can accept. But we seem in Europe to have set our face against the idea that a government can legitimately take profits in order to benefit its citizens.