The UK has embarked upon the most radical reconfiguration of welfare benefits since the modern system was established after the Second World War. “Some of the reforms are just cuts, with less money in the system,” explained Dave Simmonds, chief executive of the Centre for Economic and Social Inclusion. “The 1% benefit uprating is an example of that.
“Then there is reform of the actual system. Universal Credit is the main example of that, where the basic principles underlining making work pay is widely welcomed across the political system. But the devil is in the detail and in the delivery.”
Simmonds was one of the speakers at the Guardian Local Government Leaders Quarterly event in London in April. The panel agreed that councils will have to play a major role in dealing with the effects of welfare reform.
“Local government’s overall strategy should be to help as many of their workless people into work and move low paid workers up the income level,” said Simmonds. “That is how you grow incomes for households whose incomes are low.”
Councils should focus on the plight of individuals, not get sidetracked into a “technocratic debate” on how to redesign the system, added Simmonds. State benefits should be recognised, he said, as an “eco system”. As such, reforms would have far reaching impacts, some of which cannot be foreseen. This is especially true as the reforms are being implemented alongside cuts in benefits staffing and when there is a lack of jobs for people on welfare to move into.
“Basically, [calculating] the sums of how these reforms impact on household incomes are incredibly difficult and no one has done them very well,” he suggested. But, he added, it is clear that benefit cuts, the scale of changes and confusion over how the new system will work will together create major challenges for individuals and local authorities.
“While much of the system is in the control of central government, local government is already putting in place local arrangements to mitigate against the worst effects,” said Simmonds.
Liz Goodall, chief executive of North Dorset District Council, told the seminar that local authorities must recognise that individuals will look to them. “Whenever welfare reform has happened in the past, people always turn up at the council offices for information, even if we are not involved,” she said. “I believe with these reforms people will be at our doors, wanting support, advice, guidance and sometimes real help.
“The only sane way forward is for local authorities to prepare for this by working in a consortium, which is what we are doing [in North Dorset] with Citizens Advice, volunteer job clubs, Job Centre Plus, housing associations and the county council to put together a package of support to help people manage their money. It is about how to prevent a crisis.”
Working through the consortium, the council is also putting claimants into contact with local employers, including those small businesses that often want staff, but have practical difficulties in recruiting. In this way “we have been very effective in getting people into work,” she said.
Oxford City Council believes that it has 166 households in its area that will be affected by the benefits cap, with 956 families living in properties that will be considered under the new rules as being under occupied and so lose housing benefit.
Between these two groups, household income will fall for 1,200 children. The council is responding to the reforms by assisting householders to take in lodgers and enabling more social housing tenants to move properties, though its mutual exchange scheme.
Peter Sloman, Oxford City Council’s chief executive, told the seminar that one of the severest effects was on the state of the local economy and the potential impact of the reduction in local spending power. “It seems to me taking £34m from the poorest people in our community is a bit of a sick exercise,” he said.
Despite his criticisms of some of the reforms, Sloman stressed the need for action, rather than complaint. “We must ready ourselves – there is a lot we can do,” he said. The call for a practical response to the reforms was the seminar’s unanimous theme.