With a further £12bn in welfare cuts in the pipeline, what evidence is there to show that reforms to the welfare system are helping people into work and cutting costs?
The head of Housing and Communities at the London School of Economics (LSE) believes that savings are lower and costs are higher than planned.
Anne Power says:
“In 2013 and 2014, LSE Housing and Communities carried out a survey of 200 social housing tenants across the South West of England to find out whether welfare reform, introduced by the coalition government, was in practice helping tenants into jobs and making them better off.
“We found that the impact was direct, harsh and in most cases not leading directly to work. We have also talked to 150 social landlords and their tenants all over the country to understand the impact of cuts in benefits on the way landlords and tenants are managing.
“Our findings are striking. Welfare reform isn’t working as planned. Government savings are lower and costs are higher, particularly disability payments due to mismanagement.
“The ‘Bedroom Tax’, was introduced to make social housing tenants with one spare bedroom move home or pay more rent. This has led to empty homes in some parts of the country as many social landlords in the North and the Midlands have surplus larger properties which they have under-let to small households. Tenants now compete to downsize, leaving a costly supply of empty, larger units. Often tenants simply can’t find a smaller unit to move too.
“Sanctions, government-imposed penalties on job seekers who fail to meet Job Centre requirements, suspend all benefits with no notice. Many appeals have over-turned the job centre sanctions but often too late to prevent deep and sometimes tragic hardship. Housing benefit payments are also rising because evictions have forced tenants to pay higher rents in the private rented sector.
“Welfare reform is directed at getting a job. But older working age bands struggle because, after a long gap, skills may no longer be usable and jobs requiring IT require considerable retraining. Former manual workers often suffer serious injuries at work and can no longer do hard labour.
“Benefit cuts create longer term social costs too. For example, carers and their dependents may need a spare bedroom for a foster child or sick relative or night-time carer.
“The government is playing to popular attitudes. Spending on welfare, when austerity hits everyone, is not popular. There is a common belief that far more people cheat than actually do, whereas bureaucratic errors are far more common and cost more.
“There is general belief that people should work, whatever the job and certainly tenants we spoke to want to work. Tenants like working. But “booting” people into standing on their own feet can cut vital support lines without jolting them into a job. It can incapacitate them.
“Welfare reform is underpinned by a strong belief in the value of the market; if things don’t pay, they will stop happening, so if benefits don’t pay, people will stop depending on them. This over-simplified view has led to unintended and unnecessarily harsh consequences. As tenants feel less certain that they can rely on benefits, they find job centre interviews and the threat of sanctions too painful and too humiliating, so some just disappear off the unemployment register.
“The number of people actually finding work through job centre action is far smaller than claimed.
“On the other hand, tenants want to work whenever possible, even when pay is poor, so in that sense the strong work focus of welfare reform is positive. Tenants also like training and learning – and job centres send claimants on courses.
“Tenants are adjusting to lower incomes, although paying bills is a constant juggling act and it is no longer possible to take basic support for granted. The adjustment tenants are making would be far more painful if it wasn’t for advice organisations like CAB, churches and charities that offer emergency support. Food banks help in extreme circumstances.
“Social landlords are responding to welfare reform and the wider cuts they face with considerable anxiety. They know the vast majority of their 4 million tenant households are hard hit.
“Collecting rents becomes even more important, but far more challenging. Welfare reform has forced social landlords to recognise the need for more direct, face-to-face, front-line contact with tenants to ensure payments and help resolve problems. They develop opportunities for training and accessing jobs to help welfare reform work.”
Source – Welfare Weekly, 26 May 2015