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Building communities that work
08 July 2010
I have written before about the reforms needed to make our welfare system really work for those most in need. It is the first time I have done so as the parliamentary private secretary to Iain Duncan Smith who is now in charge of making sure we have a welfare system fit for the 21st century. I do not believe that anyone can be satisfied with the present system that often leads the poorest living a life of helplessness.
The Work Programme that should be in place nationally by summer 2011 will provide an integrated package of support, providing personalised help for people who find themselves out of work, based on their needs and when they need help, rather than the benefit they claim. We will also harness the ideas and efficiency of the private sector combined with the energy of the voluntary sector. Most importantly for those we seek to help, payment will be by results, thus ensuring value for money for the taxpayer. There will be additional payments to providers for getting those furthest from the labour market into sustained work.
We are also determined to do more for the 2.2 million people on Incapacity Benefit, where the numbers have remained stubbornly high for years. One in four claimants have been on Incapacity Benefit for 10 years and we believe that by aligning the Work Programme with claimants’ medical recovery or stabilisation that we can deliver better outcomes for the individuals concerned and the economy.
Equally important is the need to make sure that work pays for those on benefits. For far too many benefit claimants the risks of taking work are far too high. Many people are worse off working once they have paid their travel to work costs and understandably choose to stay on benefits. That is a nonsense we should not have allowed to continue for so long. At the moment, the poorest can lose £7, £8 or even £9 of their benefit for every £1 they earn. By making work pay, we will create a simpler system that rewards those who do the right thing and helps reduce the £5 billion a year cost of fraud and error to the Department for Work and Pensions.
In a report for the last government in 2007, Professor John Hills pointed out that employment rates for social tenants had collapsed in the last 25 years. Now, fewer than half working age social tenants are in work and just 35% are in full-time paid work. Of the 1.3 million workless people living in social housing, more than a million or 84% were not actively looking for work, partly because of the disincentives to work provided by the current benefit system. To provide additional help to these tenants we will need to focus on local economic regeneration as well as a nationwide social home-swap scheme to boost mobility in the social housing sector for those who want it. More work also needs to be done to ensure that there are decent transport routes between areas of social housing and centres of employment.
