Iain Duncan Smith’s flagship Universal Credit could spark a ‘substantial increase’ in the number of Britain’s poorest people hammered by benefit sanctions, according to a leading think tank.
Punitive and spurious benefit sanctions have become common place over recent years, with the poorest in society being pushed ever-further into poverty rather than supported and helped into work.
More than 686,000 desperate people saw their benefits slashed or removed in 2014, including 37,000 sick and disabled people claiming Employment and Support Allowance (ESA).
Around 50% of Jobseeker’s Allowance (JSA) claimants referred for potential sanctioning in 2014 saw their benefit payments docked – an increase on previous years.
The ‘sanction rate’ in 2014 – the number of sanctions per month compared to the total number of claimants – stood at 5.1%, according to research from the New Policy Institute (NPI). This is a slight fall on 2013 levels, but still represents the second highest on record.
According to NPI’s research, a fall in the number of sanctions between 2013 and 2014 was mainly due to a reduction in JSA claimants and not because of ‘the system becoming less harsh’.
More than a quarter of sanctioned JSA claimants were disabled or lone parents, highlighting a lack of understanding and compassion for the ‘hardest to help’.
A North-East think-tank is calling on parliamentary candidates to support a series of pledges to tackle the region’s homelessness crisis.
Research by the North East Homelessness Think Tank (NEHTT) has shown that many more people are at risk of homelessness today than at the time of the last general election in 2010, and that the numbers of people falling victim to homelessness are rising.
These trends are particularly worrying because of recent changes to housing and welfare policies and potential plans for further cuts to public spending.
NEHTT, of which Northumbria University is a founding member, is asking candidates to sign up to its charter to support specific action by the next Government.
NEHTT is a regional group comprising academics, researchers and policy officers.
Key partners include Northumbria University, Youth Homeless North East, Homeless Link, Shelter, Barnardo’s, Northern Housing Consortium, Changing Lives, IPPR North, Oasis Aquila Housing and the NE Regional Homelessness Group, as well as independent specialists.
The pledges are:
*Appropriate housing with adequate support services will be provided for vulnerable people making access to sufficient social housing a priority.
*Housing benefit will be retained for under 25s
*It will be compulsory to find settled accommodation for offenders leaving prison or who are homeless within the community.
*All houses in multiple occupation and B&Bs which cater for homeless people will be inspected and must provide good quality facilities.
The statutory definition of homelessness will be improved by ensuring that all forms of homelessness – rough sleeping, those in temporary accommodation and ‘sofa surfers’ – are officially recorded.
“The pledges are based on the knowledge we have, from a wide range of research evidence, about what would make a real difference to address the key issues encountered by many homeless people, and in particular about homelessness amongst single people and under-25s.”
So far, signatories include four Labour candidates and six Green candidates. Further support has also come from two Labour front bench MPs, and two Conservative candidates.
Source – Northern Echo, 10 Apr 2015
Tenants of private landlords should be given new rights to stay in their home as long as they please as well as guarantees that their rent will not increase above inflation, a think tank has argued.
Civitas said that a new regulatory regime is needed in the private rental sector to prevent landlords exploiting the shortage of homes to choose from at the expense of both tenants and taxpayers.
The growing private rented sector is expected to account for more than one third of the UK’s housing stock by 2032 and, at present, two-fifths (40 per cent) of private tenants’ incomes are typically taken up by their rent.
An increasing lack of affordability in the sector is being reflected in an increasing housing benefit bill for taxpayers, the report said.
The number of private renters needing housing benefit to meet their costs has more than doubled in the past decade, from 722,000 in 2003/4 to 1.7 million in 2013/14. This figure is forecast to reach 1.85 million in 2018/19, according to the Future of Private Renting report.
The document also said that the amount of housing benefit rent subsidies claimed in the private rented sector has more than doubled in real terms over the last 10 years, from £3.9bn in 2003/4 to £9.5bn in 2013/14, and is set to top £10bn in 2018/19.
The report said that while these sums are vital for growing numbers of low-income households with little choice but to rent privately, they are also creating a “vicious circle” by helping to prop up the rent inflation that they are meant to alleviate.
In areas with very high numbers of claimants, this could give landlords the opportunity to set their rents at artificially high levels, in line with the local housing allowance, the report said.
The report argued that the private sector should be required to offer indefinite tenancies “as the norm”. And once an initial rent has been agreed, index-linked ceilings on rent rises would give renters the security they need, it argued.
Daniel Bentley, author of the report, said:
“As private renting grows it is important to ensure that it offers a fair deal to those who have little choice but to rely on it.
“This vicious circle will only worsen as the private rented sector comes to represent an ever-larger proportion of the housing market and more and more tenants have to fall back on housing benefit.”
Civitas said that exceptions to rent ceilings could be made in cases where a property has genuinely been improved.
Landlords who buy new-build homes would also be exempted from the regulatory regime, but they would be encouraged to enter similar voluntary agreements.
The report said that at present, the vast majority of landlords invest in existing homes rather than new-build, with this added competition for homes helping to push up prices and crowd out first-time buyers.
Mr Bentley said new regulations would not necessarily spell an exodus of private landlords, “many of whom have invested to capitalise on rising house prices and are influenced in their investment decisions by a much broader range of factors”.
He said: “Future landlord investment must be nudged towards new-build rather than being encouraged to buy up existing owner-occupied homes.”
Source – Northern Echo, 02 Jan 2015
Only one in four workers in the UK have successfully managed to escape low-paid employment in the last decade, a new report reveals.
The report – Escape Plan – written by the Resolution Foundation for the Social Mobility and Child Poverty Commission, found that only 25% of low-paid workers were able to permanently escape the low-pay poverty trap over the course of an entire decade.
The majority of workers were hit by an unenviable case of one-step forward and two-steps back, falling back into low-paid employment whenever they managed to escape.
12% were permanently stuck in dead-end low-paid jobs for each and every year over the last decade, forced to survive on low wages with limited opportunity for progression.
Workers who were able to escape the low-pay poverty trap saw their wages grow by an average of 7.5% in real terms over the decade, while those who were unable to escape low paid work saw their wages grow half as fast (3.6%).
The Resolution Foundation used official data to track workers over a decade to find out how far up the employment ladder they were able to progress. The independent think tank also investigated what factors may have played a part in pay progression.
Several factors were identified as being positively associated with escaping low paid employment, such as a higher level of education and a ‘positive outlook’. Businesses who assist with career development and offer greater opportunities for progression into higher-paid positions were are also a major factor, says the Resolution Foundation.
However, the report identifies a number of significant barriers to pay progression including disability, gender, part-time employment, being a single parent or an older worker.
The strong link between part-time employment and poor pay progression will be particularly disconcerting for the 6.8 million people currently working part-time in the UK – three-quarters of whom are women.
Part-time workers are offered fewer opportunities to progress within a company to higher-paid positions than full-time workers, say the Resolution Foundation. The hospitality industry such as restaurants and take-aways were found to have particularly poor escape rates.
Vidhya Alakeson, Deputy Chief Executive at the Resolution Foundation, said:
“Britain has a long-standing low pay problem, with over a fifth of the workforce in poorly paid jobs. But the limited opportunities for escaping low pay is just as big a concern as it has huge consequences for people’s life chances.
“While relatively few workers are permanently trapped in low pay, just one in four are able to completely escape. More permanent escape routes are needed for the huge number of workers who move onto higher wages but fail to stay at that level.
“Some groups clearly find it more of a challenge than others to rise up the pay ladder. Breaking down the barriers to promotion faced by disabled people, single parents, part-time and older workers is crucial to reducing the share of low pay across the workforce.
“We know that even in sectors dominated by low pay it is possible for staff, assisted by employers, to progress their career and earn more. But for this to happen we need more employers to take the issue seriously and have effective plans to promote pay progression.”
The Rt Hon Alan Milburn, Chair of the Social Mobility and Child Poverty Commission, added:
“The majority of Britain’s poorest paid workers never escape the low pay trap. Too many simply cycle in and out of low paying jobs instead of being able to move up the pay ladder.
Any sort of work is better than no work but being in a job does not guarantee a route out of poverty.
> There speaks someone who has never had to do “any sort of work”…
“This research provides compelling evidence for employers and government to do more on pay progression. It is a powerful argument for Britain to become a Living Wage country.”
Source – Welfare Weekly, 11 Nov 2014
A widening pay gap between the region and the rest of the country has emerged, alongside a pay fall for the nation as a whole this year.
According to the Northern think tank, IPPR North, real wages have fallen in the past few years in the North-East and North Yorkshire, where workers are generally earning less than the national average.
Between 2009 and 2013 real annual wages have fallen three per cent in the North-East (£740) and five per cent in Yorkshire and the Humber (£1,249.)
Over the same period, the cost of living has risen sharply across the nation.
Social research charity, the Joseph Rowntree Foundation (JRF) say the cost of goods and services has gone up 28 per cent since 2008.
Luke Raikes, a researcher with IPPR North said:
“Low pay is a severe and growing problem for both the North East and for Yorkshire and the Humber, as it is for the country as a whole.”
“Workers in the area earn less per hour: nationally the average wage is £13.13, but in North East it’s £12.14, and in Yorkshire and the Humber it’s £12.”
The news has come during Living Wage week, where it was revealed one in every four workers is earning less than the living wage in the region, which now stands at £7.85 an hour.
In the North-East, the average hourly pay in Middlesbrough was the lowest, at £11.05 per hour and the highest was in Stockton-on-Tees, where it worked out at £13.29 per hour.
It comes as a report show a national pay fall. Wages have been “dragged down” this year because of changing trends in the workforce, including younger and less experienced employees, according to a new study.
The Resolution Foundation think tank said a downward shift in the mix of occupations towards lower-paying jobs has prevented 2014 from being the year of the pay rise.
But some of this was due to increase employment; changes which led to reduced earnings growth include fewer managerial jobs, rising youth employment and increasing numbers of people starting a job.
> Or, as a comment to the original article pointed out :
It also appears to be due to a cultural change in companies pushing their luck with employees. They know there are less skilled jobs available allowing them to cut wages, implement pay freezes and cut benefits such as pensions. This is definitely the case with my employer. I cant see this changing in a hurry. My employers regularly state if you don’t like it, you know where the door is! Inflation continues, my wage increase doesn’t.
Source – Northern Echo, 08 Nov 2014
A property expert has slammed proposals from a think tank to reduce the £26,000 a year benefit cap outside of London and the South-East.
The centre-right think tank Policy Exchange has suggested that a regionally based benefit cap, which takes into account varying living costs across different regions, could save the government £100 million a year.
Ajay Jagota, from a North-East based sales and letting business, said that if benefits are capped based upon regional differences in living costs, then taxes should also be capped using the same analogy.
“You can’t just pick and choose what government decisions are based on local living costs and which aren’t”, Mr Jagota said.
Mr Jagota told 24dash.com that the policy “won’t save a penny” and would just “push up costs elsewhere”.
Lowering the benefit cap would result in tenants falling into arrears on their rent as their incomes fall, said Mr Jagota. The UK “could end up with a postcode lottery which hurts landlords, not layabouts”, he said.
So far the benefit cap has had very little impact on government welfare expenditure. Official figures suggest that the policy has cut social security spending by just 0.08% since it was introduced in April 2013.
Mr Jagota said: “If this really was a problem, wouldn’t the streets of the North East be awash with southern jobseekers, migrating North for an easier life? It’s certainly not something I’ve seen much evidence of.
The property expert said that a regional benefit cap could have a negative impact on local economies and landlords, by making it less appealing for people to move and work outside of the capital.
“The real problem in need of tackling is London’s broken housing market, where there are too many people and not enough houses. The North East shouldn’t have to subsidise that, especially when you’re actively making it less appealing for people to move to other parts of the country.”
> We’ve also had right-wing think tanks suggesting that we should have lower minimum wages outside London / South East but, as the man says, no similar suggestions for lowering of taxes, travel costs, food, housing, etc, at a similar rate.
Source – Welfare News Service, 18 Aug 2014
The comments come in the latest report from the Centre for Social Justice (CSJ), the madcap Christian dominated think tank that came up with Universal Credit. The CSJ praises George Osborne’s drive for full employment (stop laughing) but points out that this does not mean everyone should have a job, but that employment levels remain at a level which does not cause inflation.
The problem for the CSJ, and George Osborne, is that if work was in plentiful supply then the bastards would have to pay us properly. That is why real full employment is neither feasible nor desirable to the people who profit from our work. Capitalism cannot function without unemployment but still unemployed people are not just blamed for…
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Sunderland has the lowest number of businesses out of any city in the UK, according to the latest report from think tank Centre for Cities.
Authors of the annual ‘health check’ of UK cities for 2014 also found Sunderland had the slowest-growing population, and was second bottom for business start ups.
The central spine of the report was the trend which showed the economic gap is widening between London and other cities.
Highlighting Sunderland, the report’s authors also listed Newcastle and Middlesbrough in the bottom ten cities for businesses in the UK.
The report also found there almost 10 times more jobs being created in the capital than the next best area.
Centre for Cities research revealed that London accounted for 80 per cent of national private sector employment growth between 2010 and 2012.
For every public sector job created in the capital, two have been lost in other cities, the study found.
While London is “booming”, cities such as Bradford, Blackpool and Glasgow have seen jobs lost in private and public sectors, said the report.
There has also been a significant number of jobs created in private firms in Edinburgh, Birmingham and Liverpool which have helped offset the impact of public sector job cuts.
In the two years to 2012 there were 216,000 private sector and 66,300 public sector jobs created in London, compared with losses of 7,800 and 6,800 in Glasgow, said Centre for Cities.
Other cities where jobs have been created in private companies included Nottingham (8,900), Brighton (6,400) and Aberdeen (4,900), but they were all hit by cuts in public sector employment.
The report said: “London remains the UK’s economic power house and is pivotal to the UK’s future success.”
Alexandra Jones, chief executive of Centre for Cities, said: “The gap between London and other UK cities is widening and we are failing to make the most of cities’ economic potential.
“Devolving more funding and powers to UK cities so they can generate more of their own income and play to their different strengths will be critical to ensuring this is a sustainable, job-rich recovery.”
Sunderland Echo, 27 January 2014
Right wing “think tank” Policy Exchange (PE) – described by the Daily Telegraph as “the largest, but also the most influential think tank on the right” – wants pay to be cut for public sector workers in the North East (and Merseyside, and the South West), pointing to research claiming that taxpayer-funded jobs in the region pay as much as 3200 pounds more than their equivalents in the private sector.
(As usual I have problems with terms like “as much as 3200”, which probably means a few lucky people do, but the majority get nowhere near. But policies like this will always quote the highest figure earned by the minority, rather than the far lower one that is the lot of the majority. Just something to bear in mind…)
What the PE has in its sights is regional pay policies. Matthew Oakley, head of economics and social policy at PE : “Nationalised pay negotiation is not fit for purpose for the modern public sector. It is bad for the economy and bad for public services. While the unions should still have a strong role in the future, we should move to a system where local public sector employers can decide how to negotiate salaries with employees in order to reflect the realities of their labour market.”
Which I translate as something like – employers tell employees ” lots of unemployment out there – either you accept lower wages or we find someone who will.”
Incidentally, could this be the same Matthew Oakley who was recently described by The Void as ” Britain’s biggest scrounger” ? It certainly could.
Matthew Oakley has previously authored a paper on welfare reform which includes not only a demand for a greater use of sanctions for part workers, but astonishingly even pre-emptive benefit sanctions for people on fixed term contracts. Oakley believes that these workers should be stripped of any entitlement to benefits at all if Jobcentre staff decide that they weren’t doing enough to find work even before they lost their job.
So impressed was Iain Duncan Smith with this swivel-eyed nonsense that he gave Oakley a non-job on the Social Security Advisory Committee (SSAC) – the body whose job it is to scrutinise social security reforms.. This means he is now paid £256.80 a day of tax payer’s cash to provide so-called expert opinions on policies he helped create.
Prior to working at the Policy Exchange, Oakley was in another tax payer funded non-job at the Treasury where he worked on a white paper outlining proposals for Universal Credit. Now Iain Duncan Smith is to shovel yet more of our money into his grubby pockets by asking him to carry out what is laughingly called an ‘independent review’ of benefit sanctions.
Whilst over two million people are desperate for any job, Oakley now has three – and two of them at our expense.
Nice work if you can get it !
But as pointed out by Neil Foster, head of policy at the Northern TUC : “PE still fail to compare like with like since many of the jobs in the public sector simply don’t exist in the private sector and vice versa.
“They lost the argument on regional pay and I’d advise them to move on to other areas of research such as looking at the wealth at the top that has gone up during austerity, rather than arguing North East nurses, midwives, teachers and school cooks are overpaid.”
You might think that what all this proves is that the wages of private sector workers are being kept low by unscruprulous employers, and that rather than reducing the pay of the public sector, we should instead be raising the wages of the private sector.
Alternatively, you might think that if we should have lower regional wages, we should also have lower regional outgoings – lower power bills, food prices, transport, etc. But “pay more, get less” is the unofficial motto of organizations like PE and the neo-liberal forces they serve.
You might also like to bear in mind that a study for the GMB union shows 631,000 public sector jobs have been lost since the Coalition came to power in 2010,
and the union predicts that fresh cuts being eyed by Tory Chancellor George Osborne will take that figure over a million before the next election in May 2015.
GMB national officer Brian Strutton said: “These statistics show the devastating effect of this Government’s austerity cuts on total public sector employment. Some parts of the country that are most dependent on the public sector to support their local economies have been hardest hit.The tragedy is that the worse is yet to come.
“The Office for Budget Responsibility’s forecast for net total public sector job losses during the lifetime of this Parliament means that the prospect for the next two years could be up to a further 400,000 job losses.”
Still, as we’ve often been told, the private sector will take up the slack and replace all those lost public sector jobs, albeit for lower wages.
It doesn’t seem to be happening. Isn’t that strange ?
You don’t think they might have been lying to us, do you ?