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Giving the jobless capacity for change PDF Print E-mail
Tuesday, 29 July 2008

More reforms will be needed unless staff and claimants themselves are the engines of change

Frank Field

There can be little doubt that welfare reform still awaits a radical government. Despite this Government spending £60billion on the New Deal and initiatives to make work pay, and a bouyant economy that has created more than three million additional jobs, the total out of work has fallen only from 5.7 million to 5.4 million.

The largest group of workless claimants - which has grown since 1997 - are the 2.7 million people on incapacity benefit (IB). Yesterday the Government proposed three important reforms to that benefit. The first is to abolish it and to replace it with an employment and support allowance. This is deeply flawed because it leaves the same structural faults in the system. It will not stop people trying to graduate from being plain jobless to being classified as long-term sick, which rewards them with more money.

The first part of any serious reform should have been to create a single rate of benefit for all claimants of working age, thus taking away the perverse incentive to join the ranks of the officially long-term sick. Claimants with a disability would still be able to claim the disability living allowance - which all disabled people can receive, regardless of whether they are in work or not.

The Government's second reform is to replace the test for incapacity with one that establishes which activities claimants can actually do. It sounds nice but it, too, is unlikely to work. There are large numbers of genuine claimants on IB. There are also, sadly, a large number who, in Barbara Castle's phrase, simply “monkey about” with no intention of working. The trouble is that the Government is poor at judging which claimants fit into which group
It was not long after the implementation of the last, supposedly more rigorous, test for IB that claimants intent on monkeying around found out which answers maximised their chance of getting a more generous benefit.

The Government may think that its new test is on a par with the Enigma Codes, but past experience shows that the best schemes that the Department for Work and Pensions can devise are quickly broken by groups of highly talented code-breaking claimants.

The third element in the Government's programme is a faith in the private sector's ability to help claimants back into work. But the use of private agencies doesn't necessarily mean an alpha service, as worried pupils awaiting their SATs results can testify.

A truly radical reform would include three complete breaks with the past. The first would be to build on the expertise of staff in local benefit offices. They have a much better idea than any minister of which claimants need - and want - help and which are simply swinging the lead. Benefit offices should be transformed into separate business units, run by the staff.

Each office would have its own budget and be required to operate within benefit laws. Freed from the miles of red tape, staff would be able genuinely to provide personal services to get claimants back to work. Profits earned by the office would be shared between staff bonuses, lower bills for taxpayers and new investment to help more claimants back into work.

The biggest gainers would be the claimants themselves, and here is the second break with the past that any truly radical government must make. Most claimants who have been on IB for two years will retire or die on benefit. Those claimants who have found work, then lost their job, have had an awful time getting back on housing benefit, for instance. In effect, the welfare system penalises them for trying.

The Government should invite claimants to be their own liberators. For instance, all claimants who have been on benefit, say, for more than five years should be given a more powerful incentive to find a job. If they find one, they would be able to keep their benefits for a year, to get them used to the routine of going to work. If they fail to hold down a job, they would not be penalised by the risk of losing housing benefit and their homes too. And if claimants find a part-time job, the benefits office should be on hand to help to turn it into a full-time role.

The third radical departure would be to put a time limit on benefits, as most of them had under the Attlee Government. In my constituency young lads with no intention of completing their New Deal placements go sick at the point when they have to choose one of the work options, then get themselves on to incapacity benefit. In areas where there has been a sustained growth in jobs over the past ten years, benefits for young people should be limited to a few weeks. After that, if claimants wish to keep their money, they should have to join a Workfare scheme.

Unless he makes local offices engines of change, allows claimants to become their own liberators, and puts a time limit on benefits for those cheating the system, James Purnell will not be the last Secretary of State to promise the revolutionary goal of abolishing welfare as we know it.

Frank Field is Labour MP for Birkenhead and was Minister for Welfare Reform, 1997-98

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