Charity conference

Welfare reform: the new postcode lottery

5 September 2013

I am not a policy person, but I do consider myself something of a welfare nerd. Ever since Labour introduced the Employment and Support Allowance (and associated Work Capability Assessment)  as a replacement for Incapacity benefit in 2008, I’ve closely watched how our benefits system has changed. And so yesterday’s event exploring the impact of welfare reforms on charities was right up my street.

A theme that really caught my attention was introduced by Peter Kenway, of the New Policy Institute: localisation, and the fragmentation of rules and regulations around things like council tax benefit, and what used to be the Social Fund. Previously, these schemes were nationally devised and nationally administered, but there is now huge geographical variation as to what is available to whom. For example, there are now 326 Council Tax Support schemes across  England. As of April 2013, 18 per cent of councils retain the 2012/13 levels of what was then Council Tax benefit, 71 per cent require all working-age adults to pay at least some council tax, regardless of income, and11 per cent intend to make some changes, but these will not affect all CTB recipients. We now have a classic postcode lottery, where a jobseeker with a set state-provided income pays some council tax in certain parts of the country, but is considered too poor to pay in others.

This is of course very confusing, and makes it hard to offer advice. As Beatrice Karol Burks of the CAB pointed out, in these situations the service provided by their local bureaux, and the local knowledge they acquire, becomes more important than ever. But the problems run even deeper. We are potentially facing a situation where local authorities, who now have control over these localised benefits,  experience a serious conflict of interest. Whilst the DWP is accountable to the Treasury, setting benefits it is not under the influence of other departments. A local authority is therefore responsible for setting local benefit rates whilst attempting to balance the impact this will have on other areas. It begs the question:, if a local authority sets benefits at a more ‘generous’ level, what is the opportunity cost ie, which area of their budget gets less as a result? Does this meant that we’re moving to a place where local benefits are resource-led, rather than demand-led? We don’t know if this is going to happen, but it’s certainly a grave risk.

This is particularly worrying when it comes to the replacement for the social fund. Whilst levels of Council Tax Support will vary by area, it will operates as a set system locally. however the emergency grants or loans replacing the social fund are not only subject to geographically variation but are  also discretionary. Without wishing to sound alarmist, leaving decisions around social fund-replacement payments open to interpretation by individuals exposes them to discrimination and abuse. I don’t want to think about what this might mean for vulnerable, marginalised groups.

It wasn’t all doom and gloom. The Harrow Association for Disabled People explained how a shift to more spot contracts is working well for them, and there was an encouraging report from CAB about a surge in volunteer numbers since the economic crisis hit. On the funder side, Lankelly Chase Foundation is looking to reach out and work with other funders, to tackle the impact of welfare reforms at all levels.

With the roll-out of Universal Credit looming—wobbling?—on on our horizon we’re still in the early stages of learning what the impact of welfare reforms are. This is without a doubt an area we should all be keeping an eye on, and it’ll be interesting to see how charities and funders adapt to the new realities of the benefits system.