local government & welfare reform

Barnsley & Welfare Reformthe case for restoring Northern social justice

Dr Simon Duffy ￭ The Centre for Welfare Reform ￭ November 2013 ￭ Presentation for Barnsley councillors of all parties

This is NOT a party political

broadcast

As said by an employee of A4E at a think tank in London: !

“Barnsley couldn’t exist on its own. Barnsley needs Chelsea .”

At the peak of its powers Ancient Athens had a population of less than 300,000 of whom 30,000 were voting citizens. Barnsley today has a population of over 230,000.

Q: What went wrong? How did we lose faith in our own capacities? How did we lose power to the foolish and the greedy?

A: We fell asleep. We forgot that the North built the wealth of the country. We forgot that it built the welfare state. We gave away control.

1. The welfare state is a good thing

2. But it’s designed wrong

3. Many of our beliefs about it are false

4. It is biased against the poor

5. The current crisis highlights deeper problems

6. Citizenship is the key to real reform

7. Essential to restore power to the local

Argument

The welfare state is a good thing...

...and it is utterly essential.

1

After meeting with community groups in the North of England a Finnish researcher asked: !

What’s the problem with ‘welfare’? In Finnish it just translates as ‘well being’

There are many reasons why all modern states have developed welfare systems:

• Justice demands we create a fair society - to live together as equals.

• Happiness demands we provide security and freedom - to stimulate human development.

• Economics demands we use all our resources - to enable the full and active contribution of all.

• Prudence demands we avoid fear & crisis - to avoid victimisation, blame and strife.

Fear and insecurity breeds scapegoating, terror, war and revolution. Current rhetoric implies we may now no longer need the welfare state. But this false. Modern society grows even more insecure - it is more important than ever that we secure our collective well-being.

Disabled people experienced the full force of the hatred and prejudice unleashed by economic uncertainties and fear. They were the first victims of eugenics and the Holocaust.


it’s just designed wrong.

2

The welfare state is NOT the problem. But our thinking about the welfare state is. !

Debates about the welfare state usually focus on its size: spend more vs. spend less !

But this is the wrong question. !

The real question is: HOW should we spend money? !

How should the welfare state be designed?

The dominant intellectual tradition which framed the design of the welfare state was Fabianism:

We have little faith in the 'average sensual man', we do not believe that he can do more than describe his grievances, we do not think he can prescribe the remedies. Beatrice Webb

Other traditions were defeated in the debates that preceded World War II:

Collectivism has put all their eggs in one basket. I do not think that Mr Shaw believes, or that anybody, believes, that 12,000,000 men, say, carry the basket, or look after the basket, or have any real distributed control over the eggs in the basket. I believe that it is controlled from the centre by a few people. They may be quite right or quite necessary. A certain limit to that sort of control any sane man will recognise as necessary: it is not the same thing as the Commons controlling the means of production. It is a few oligarchs or a few officials who do in fact control all the means of production. G K Chesterton

1. The first principle is that any proposals for the future, while they should use to the full the experience gathered in the past, should not be restricted by consideration of sectional interests established in the obtaining of that experience. Now, when the war is abolishing landmarks of every kind, is the opportunity for using experience in a clear field. A revolutionary moment in the world's history is a time for revolutions, not for patching.

2. The second principle is that organisation of social insurance should be treated as one part only of a comprehensive policy of social progress. Social insurance fully developed may provide income security; it is an attack upon Want. But Want is one only of five giants on the road of reconstruction and in some ways the easiest to attack. The others are Disease, Ignorance, Squalor and Idleness.

3. The third principle is that social security must be achieved by co-operation between the State and the individual. The State should offer security for service and contribution. The State in organising security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family. William Beveridge

• Meritocracy - most people lack the capacity to make good decisions for themselves, only the ‘clever’ can be trusted with power.

• Centralisation - power and control needs to be centralised in order to make rational decisions on behalf of the whole of society.

• Standardisation - equity is more about ensuring procedural uniformity (we all go through the same processes) than about equalising resources or opportunities.

• Individualisation - the relationship between the individual and the state is central (civil society - firms, communities, Churches, friends and family can all be taken for granted.)

The underlying design assumptions of Fabianism are powerful, but ultimately damaging:

• Power and resources are centralised in London (the UK is the 2nd most centralised welfare state after New Zealand!).

• Communities and families are undermined (e.g. the benefit system penalises people for forming families).

• Inequality is growing - the UK is the third most unequal developed country, yet has low levels of productivity.

• Our leaders blame the poor for poverty and encourage stigma (e.g. growing hate crime for disabled people).

• We fund services, not people (e.g. £3 billion spent on 21,000 institutionalised in private ‘care services’).

• The UK has the greatest level of debt per person!

The price we have paid for the success of the Fabian tradition is steep. Costs include:

1. Elitism - power and control is concentrated in the hands of powerful private and public elites

2. Isolation - people are increasingly cut off from each other and the means to rich and meaningful lives

3. Poverty - differences in income are growing, freedom for leisure and personal development is diminishing

4. Stigma - some of us are increasingly marked out as less worthy, less valuable or a threat to society

5. Despair - mental illness, hopelessness and a sense of spiritual emptiness is growing

Beveridge set out to defeat five giants, but have we created Five New Giants in their place?

At the same time we are increasingly aware that none of this is sustainable. !

The state is good and necessary - but its competence is limited.

Pruitt Igoe Urban Housing Project: 1952-1968


...but our beliefs about it are false.

3

1. The welfare state caused the current crisis

2. Benefits are expensive

3. Benefit fraud is significant

4. The poor are not tax payers

5. There are many people who just live on benefits

6. The South subsidises the North

Much of what passes for common knowledge about the welfare state turns out to be utterly false and misleading. Here are 6 welfare myths:

Over 40 years public expenditure has varied little. The recent modest increase was the result - not the cause of the economic crisis.

Benefits are not strictly government expenditure - instead for economists they are part of a system of income adjustment. When we adjust for taxes real cost of benefits is very low.

Benefit fraud is only 6% of tax fraud, yet it is covered by the news 600% more. Government fraud - a benefit system so complex many do not get what they are entitled to - is even greater.

The poorest 10% of families pay the highest share of their income in taxes - about 45%.

The number of people who simply rely on benefits and who do not make an efforts to find work is tiny.

So called ‘deprived’ communities do not even get their fair share of public spending, and what they do get they can’t control.

These welfare myths are not random. They exist for a purpose...

Overheard at a public policy conference in London: !The welfare state exists for the benefit of the poor. !This statement was made, without irony, by a senior academic and made to a room full of public servants, politicians, think-tankers and others - all of whom are utterly dependent on the patronage of the welfare state. What other people get is a ‘hand out’, while what I receive is an entitlement. We are blind to the entitlements of others; but all too eager to expand our own sense of entitlement. !And this is a problem that starts at the top.


...but it’s biased against the poor.

4

Paradoxically the welfare state serves least well those who are used to justify its existence...

the poorest families, disabled people, asylum seekers - the victims of injustice.

• The poor not only pay the highest taxes, they pay rates of marginal tax that can exceed 100%

• You must get poor and stay poor in order to get means-tested services (e.g. social care).

• The poor get no choice about how they get education, health or social care.

• The poor are very poor - e.g. the poorest 10% of families live on £11.90 per day after tax.

The welfare state is designed in ways which often disadvantage the poorest:

The system is a vast poverty net:


...but it can be corrupted.

5

Today ‘welfare reform’ is a central political project. !The current government - building on the work of the previous government - is pursuing policies that are justified in strong moral terms and which seek to increase employment, personal responsibility and stronger communities. !However, as these goals are converted into practical policies and media soundbites they often seem to reinforce bigotry, ignorance and injustice.

[NB. The “Benefit Thieves” Campaign was developed by New Labour.]

The terms ‘austerity’ and ‘fairness’ are used to justify cuts in public spending and welfare reforms.

!

but these cuts target the very people that a fair society should protect.

Most cuts are targeted in just two areas - benefits and local government (60% of which is social care):

Child Benefit freeze Abolition of Sure Start Maternity for second and subsequent children

Change to CPI indexation of benefits Reductions in support for carers

Replacing DLA with PIP Child Benefit clawback from higher rate taxpayers

Time-limiting of contributory ESA Transfer of Social Fund to local government

Council Tax Benefit – 10% reduction and localisation

Extension of JSA lone parents with a youngest child aged 5-6

Housing Benefit cuts Household Benefit cap

Abolition of the Independent Living Fund Continued use of ATOS or others

Universal Credit Reductions in ‘Access to Work’ funding

Closure of Remploy services Abolition of the Child Trust Fund

Tax credit changes Abolition of the Health in Pregnancy Grant

Abolition of the Child Trust Fund Abolition of the ESA youth rules

The cuts in benefits and the cuts in social care fall disproportionately on two overlapping groups: people in poverty and disabled people (including children and frail older people). !

They fall hardest of all on people with the most severe disabilities, who rely on both benefits and social care.

This report sets out a cumulative impact assessment of the cuts on people in poverty and disabled people.

Harsh measures are justified in terms of the current economic crisis. !

But politicians try to avoid confronting the fact that that this crisis was created by !

over-borrowing by home owners and over-lending by banks.

The extreme growth in house prices is primarily the result of a bubble - an artificial price increase that offers easy benefits:

Current interest rates reflect a desperate effort by the government to not let the bubble burst at great cost to home owners.

This artificially low interest rate is a hidden subsidy to the better off even greater in size than the cuts to benefits and care.

‘Welfare reform’ has become code for a redistribution of resources away from the poorest and towards the better off. !In the competition for political power politicians are taking care to ensure that they target benefits on swing voters: home owners, families with two employed parents, middle-income earners. !The median voter is far more important than any other. The median voter determines who wins elections. We live in a medianocracy.


...and it should support citizenship.

6

The on-going corruption of the welfare system into an increasingly unjust and damaging system was the very opposite of what was intended by the thinkers who inspired and designed it:

The aim of a Christian social order is the fullest possible development of individual personality in the widest and deepest possible fellowship. William Temple

The [new 1834] Poor Law treated the claims of the poor, not as an integral part of the rights of the citizen, but as an alternative to them - as claims which could be met only if the claimants ceased to be citizens in any true sense of the world. T H Marshall

A better system would support and encourage citizenship for all. It would respect the capacities of communities and citizens and create a fundamental framework of basic securities.

Services would be accountable to citizens: they are not gifts from the government.

• Human rights at heart of system

• Minimum universal securities as rights

• A fair and integrated tax-benefit system

• Individual freedom for all • Families and communities

respected and supported.

Other elements of a better system may include:

It’s time to explore a new settlement for the welfare state and ensure its underpinnings are strong, constitutional and less liable to corruption by politics.

Citizenship will only thrive… !

…in powerful local communities

7

A community like Barnsley has all the resources it needs to thrive.

Barnsley Per Ward (n=21)

RatioPopulation 231,900 11,043 56Under 18s in ward 48690 2,319 1218-64 in ward 142521 6,787 3465+ in ward 40010 1,905 10Dwellings 104,926 4,996 25People per dwellings 2Activities limited alot 29,147 1,388 7Activities limited a little 26,121 1,244 6No disability 175,953 8,379 4218-64 free from paid work 38,942 1,854 9 Capacity18-64 ¾ free from paid work 8,086 385 2 1618-64 ½ free from paid work 22,357 1,065 5 Per Ward18-64 ¾ free from paid work 61,102 2,910 15 3,09018-64 lost to paid work 12,034 573 3 BarnsleyOver 65 but active 20,588 980 5 64,882Unpaid care for less than 20 hours

15,473 737 4Unpaid care for 20-49 hours 4,075 194 1Unpaid care for 50+ hours 7,619 363 2Very good health 96,194 4,581 23Good health 77,649 3,698 19Fair health 37,956 1,807 9Bad health 15,278 728 4Very bad health 4,144 197 1

Powerful and efficient models for tackling problems and releasing social capital exist. !

Many of them are Northern: !

• self-directed support - Barnsley are leaders • Womencentre - based in Halifax • PFG - developed in Doncaster

How women in Halifax tackle the most vicious social problems - together - and far more efficiently and effectively than public services on their own.

How people with mental health problems in Doncaster took back control and showed how to reform mental health services.

The choice before us: !

complicity with injustice !

or !

resistance, innovation and a new settlement

• New constitutional settlement with local government’s role enhanced and protected

• Foundations in human rights • Resources returned to local control • Integration of health and social care • Radical rethink on education • The end of era of privatisation • A return to local community innovation • Local government organised to protect its

interests and the interests of citizens.

Justice lives in poverty. She survives. She measures What is necessary. She honours what ought to be honoured. She seeks out clean hearts, clean hands. She knows what wealth and power Grind to dust between them. She knows Goodness and the laws of heaven. !

Aeschylus

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