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Redesigning the Welfare State to Increase Social Justice
Talk for Disability Wales - October 2011
Real Welfare Reform
Dr Simon Duffy
• Director of The Centre for Welfare Reform - genuinely independent R&D network based in Sheffield
• ‘Invented’ Individual Budgets and Self-Directed Support
• Founded Inclusion Glasgow, In Control, Shop4Support and many other charities and social enterprises
• Honorary Senior Research Fellow at University of Birmingham’s Health Service Management Centre
• Policy advisor to The Campaign for a Fair Society
• Lives in Sheffield
The basic proposition
1. The Welfare State is a good thing - it’s just designed wrong
2. The current unfair cuts target disabled people
3. This reflects a repeated pattern of discrimination against disabled people
4. Its time to start building a broad alliance for a fairer system and a fair society
The welfare state is good...
• We need a collective system of income security and rights
• The post-war welfare state was a great achievement
• The conditions that make the welfare state necessary have increased not diminished
... but it’s designed wrong
• Designed in a paternalistic and industrial age
• It’s current design stigmatises and damages the poorest
• It’s complexity and obscurity undermines citizenship for everyone
• Let’s not just hark back - let’s build something better
Example 01: The Poverty Net
• 137 different ways to give people not very much
• UK is the 3rd most unequal developed country
• Confused: linked, means-tested, disability-related, family-sensitive or NOT
• 100% tax on earning, 25%+ tax on families, taxes on savings
• The poorest 10% pay the highest share of income in tax: 46.6%
The poverty net means
Teresa Perchard , Director of Social Policy, Citizens Advice:“Citizens Advice acknowledges that the £1.5 billion cost of fraud in the benefit system must be recovered, but we are very concerned at the government’s persistent tendency to roll fraud and error figures together. Errors account for the remaining £3.7 billion of the £5.2 billion figure quoted...
“In the meantime, the £5 billion cost to government through fraud and error is dwarfed by the £17 billion of benefits and tax credits that remain un-claimed every year, because people don’t know they are entitled to claim, or because the system is too complicated.”
In other words: The government defrauds the poor at more than 11 times the rate at which the poor defraud the government
The poverty net means
Example 02: Social Care
• Weak and confused entitlements
• Funding for segregated services not for people
• Citizens are not in control of their own lives
Focus on OutcomesPlan TogetherClarify Entitlement Support in Community
MyBudget:
£
MySupportPlan
£Resource Allocation System (RAS)
© S
imon
Du!
y. A
ll Ri
ghts
Res
erve
d.
... and so, citizen-directed support
• Current efforts to revise the old system
• Some success in promoting control and creativity
• Limited by legal framework and other rigidities
The current cuts target disabled people
• Cuts to social care
• that can be blamed on local or national governments
• Cuts in direct income
• that can be hidden within efforts to ‘reform’ the current system
Its organised as a pincer attack:
Approximately 1.5 million children and adults, including older people, receive social care each year in the UK because of significant disabilities. This group face social care cuts from:
• Cuts to local government funding and funding for Scotland, Wales and Northern Ireland.
• Cuts to Supporting People funding
• Termination of Independent Living Fund
Note that:
• Local government, by 2014, will have been cut by 20%
• Social care is biggest role for local government (c. 40%)
• 34% of all cuts fell on local government (excluding education) despite accounting for only 5% of government spending
• over the long-run local government funding has been behind other public services
Attack 01: social care cuts
Central control - local weakness...
UK is the most centralised welfare state in the world
• Increases in eligibility thresholds - so some people stop getting support
• Increases in charges - so people who are already poor will lose even more direct income
• Cuts to local services, especially community organisations
• Reduction in wages for staff
• Reductions in individual budget levels
• Attempts to rationalise services or contract out to private providers - limiting choice and damaging markets
• Attempts to limit flexibility of how people can use their budgets - damaging creativity
• Less preventive support - increasing crises and expensive placements
social care cuts will mean:
Benefits, tax credits and pensions take up c.£185 billion per year, c. 18% of GDP. The major changes planned include:
• Rolling income support benefits into Universal Credit
• Rolling disability benefits into Personal Independent Payments
• Cuts to Housing Benefit and Mortgage Interest Relief
Already:
• £6 billion a year to be saved by weaker indexation
• Stricter medical tests delivered by ‘incentivised’ provider (ATOS)
• Planned reductions in hyper-taxation on poor will be paid for by reducing benefit incomes rather than increasing DWP spending
NB: The poor can be very poor indeed - the poorest must live on £2,780 per year - compared to mean household income of £50,000 per year (<6%).
Attack 02: direct income cuts
Benefit (£ billions) 10/11 (mn) PA
Retirement Pension £72.4 protected 12,509,000 £5,787
Tax Credits £24.0 protected 7,200,000 £3,333
Housing Benefit £21.5 vulnerable 4,750,000 £4,530
Disability Living Allowance £12.5 vulnerable 3,214,000 £3,879
Attendance Allowance £5.4 vulnerable 1,635,000 £3,325
Child Benefit £11.0 questionable 7,200,000 £1,528
Income Support £5.8 vulnerable 1,746,000 £3,301
Pension Credit £7.7 vulnerable 2,664,000 £2,880
Council tax benefits £4.1 vulnerable 5,794,000 £705
Jobseeker’s Allowance £4.8 questionable 1,402,000 £3,453
Carer’s Allowance £1.0 vulnerable 566,000 £1,767
ESA + IB £6.9 questionable 2,469,000 £2,782
Independent Living Fund £0.2 terminated 21,000 £9,524
TOTAL £177.245
2010-11 Figures from DWP for major benefits - child benefit and tax credits from other sources
Why do the cuts target disabled people?
Protected CutPensions Disability benefits
Healthcare Social Care
Education Social Housing
£350 billion out of £500 £40 billion
Universal, mainstream, for ‘ordinary people like us’
Special, marginal, ‘the poor & unfortunate’
Delivered by nationalised systems with high visibility
Delivered by complex systems with low visibility
Not just cuts - but targeted cuts
Political pandering
0%
10%
20%
30%
40%
50%
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th£0
£10,000
£20,000
£30,000
£40,000
£50,000
£60,000
£70,000
Tax Paid (%) Net Income
Source: ONS tax-benefit data 2007-08 - unadjusted household deciles
1. No constitutional guarantees for citizenship - we have weak rights and only hazy responsibilities placed on multiple public bodies
2. No natural justice - the courts apply ‘natural justice’ to define entitlements, but public bodies simply ration on the basis of ‘equitable charity’
3. No support for families - families have to reach breaking point in order to be entitled to support, and then they are treated as ‘carers’
4. No control guaranteed - funding is guaranteed to providers, but not to people, even with direct payments control is often limited
5. No housing rights - many people end up in institutional settings, with no housing rights, no privacy or control over who they live with
6. No decent incentives - the current benefit system punishes families, savers, earners and disabled people
7. No universality - means-testing or charges are just an extra tax on groups who are already poor, this leads to many people making themselves poorer just to ensure they become entitled to social care
This is a long-standing issue
from the professional gift
to citizenship
• Beginnings - began on 8th February 2011 by people horrified at the likely impact of the Spending Review
• Members - Over 1,000 individuals and 100 organisations are members.
• UK-wide - There are Scottish, Welsh & English Steering Groups - connected federally in a UK group.
• Communications - information on web, twitter, facebook etc - www.campaignforafairsociety.org
The Campaign for a Fair Society
Everyone is equal, no matter their differences or disabilities. A fair society sees each of its members as a full citizen - a unique person with a life of their own. A fair society is organised to support everyone to live a full life, with meaning and respect.
Core Values
Scottish Campaign Manifesto - 7 Commitments
1. to human rights
2. to make the entitlement to support an objective right defined in law
3. to provide families and individuals with early support
4. to put people back in control of their own life
5. to good housing
6. to a guaranteed minimum income free from means-testing
7. to end the current super-tax on older and disabled people levied through local authority charges
It is time to campaign
against unfair cuts
and
for a fair society
Decile Number Income plus Benefits less Taxes Net Income Tax
1st 2,528,000 £2,043.00 £4,592.00 £3,092.00 £3,543.00 46.6%
2nd 2,528,000 £3,738.00 £7,287.00 £3,274.00 £7,751.00 29.7%
3rd 2,530,000 £7,464.00 £7,431.00 £4,642.00 £10,253.00 31.2%
4th 2,527,000 £11,387.00 £7,702.00 £6,155.00 £12,934.00 32.2%
5th 2,529,000 £18,354.00 £5,969.00 £8,656.00 £15,667.00 35.6%
6th 2,530,000 £26,523.00 £4,093.00 £10,978.00 £19,638.00 35.9%
7th 2,529,000 £33,862.00 £3,656.00 £13,379.00 £24,139.00 35.7%
8th 2,525,000 £43,552.00 £2,743.00 £16,710.00 £29,585.00 36.1%
9th 2,531,000 £56,842.00 £2,310.00 £20,833.00 £38,319.00 35.2%
10th 2,531,000 £100,138.00 £1,958.00 £35,271.00 £66,825.00 34.5%
Mean £30,390.30 £4,774.10 £12,299.00 £22,865.40 35.3%
Sum 25,288,000
Source: ONS tax-benefit data 2007-08 - unadjusted household deciles
Decile Number Adjustment Cost Contribution Services Net Use Balance
1st 2,528,000 £1,500 £3,792,000,000 £4,314 -£1,675 -£175
2nd 2,528,000 £4,013 £10,144,864,000 £4,854 -£1,135 £2,878
3rd 2,530,000 £2,789 £7,056,170,000 £5,503 -£486 £2,303
4th 2,527,000 £1,547 £3,909,269,000 £5,839 -£150 £1,397
5th 2,529,000 -£2,687 £6,795,423,000 £6,025 £36 -£2,651
6th 2,530,000 -£6,885 £17,419,050,000 £5,908 -£81 -£6,966
7th 2,529,000 -£9,723 £24,589,467,000 £6,281 £292 -£9,431
8th 2,525,000 -£13,967 £35,266,675,000 £6,733 £744 -£13,223
9th 2,531,000 -£18,523 £46,881,713,000 £7,473 £1,484 -£17,039
10th 2,531,000 -£33,313 £84,315,203,000 £6,958 £969 -£32,344
Mean -£7,525 £5,989
Sum 25,288,000 £24,902,303,000£215,267,531,000£151,444,774,400
Surplus £38,920,453,600
Source: ONS tax-benefit data 2007-08 - unadjusted household deciles
Household Income 1st Decile Adjusted ShareIncome 2043 3424 39%Retirement pension 2463 2048 23%Job seeker's allowance (Contribution based) 61 72 1%Incapacity benefit 268 285 3%Widows' benefits 59 35 0%Statutory Maternity Pay/Allowance 3 5 0%Income support and pension credit 468 651 7%Child benefit 87 422 5%Housing benefit 650 755 9%Job seeker's allowance (Income based) 100 129 1%Carer's allowance 9 36 0%Attendance allowance 7 2 0%Disability Living Allowance 144 204 2%War pensions/War widows' pensions 11 2 0%Severe disablement allowance 2 1 0%Industrial injury disablement benefit - 2 0%Student support 26 73 1%Government training schemes 3 3 0%Tax credits 73 564 6%Other non-contributory benefits 158 107 1%Gross income 6635 8820
Source: ONS tax-benefit data 2007-08 - unadjusted household deciles