Friday 10 January 2014

Welfare: Where do we go from here?

Channel 4's "Benefits Street" shone a torch in a very dark corner of modern Britain. And a lot of people are not very happy about it.  If you are reading this, you are familiar with the arguments on both sides and I have made my feelings quite clear on this blog and elsewhere.  So rather than rehashing the same ancient arguments we need to ask where do we go from here?  All but the most bone-headed leftists would argue that the status-quo is acceptable.  So on what do we all agree?

Despite wailing to the contrary, I don't think any rational person would say that the lives depicted in the programme were fabrications.  Perhaps what we see represents the worst of the welfare class, but we have all seen this in our own towns and cities.  We all on some level experience the consequences of it.  It has an impact on our quality of life and does little for theirs either.  It isn't right that in a first world, developed economy that anyone lives like this.  I think we can all agree that these people represent a failure of ours and we share a collective responsibility for this.

We can also agree that these people do need help.  But what kind of help?  And how do we deliver it?  We had a failing welfare system in the Thatcher years and under Blair the very worst aspects of that system had the volume dial turned up to eleven.  Now we reap what we have sown.

For all the condemnation the Tory welfare reform programme, we are not seeing any major deviation from the norm.  We are still looking at policy dictated by Whitehall, administered through our local authorities which are little more than regional agency offices of the central state, fronted by job centres that work on the same principles they always have. Claimants must report to the state fortnightly to justify their existence to a lowly public servant to receive their benefits, and what is presented in the interview is run through a series of centrally derived set of criteria, rather than the intuition of a living, breathing human being.

The horror stories we hear of unfair sanctions and absurd medical assessments are not the product of an "evil Tory attack on the vulnerable".  This is certainly nothing new and it's disingenuous to pretend that it is.  I worked in a DLA appeals office in the 90's and the benefit stoppages were equally absurd then.  This is merely the product of an inhuman system designed specifically to remove humans from the decision making process.  It is a bloated, creaking system run for its own convenience rather than to serve those who pay for it.  Without addressing the fundamental structural flaw, no amount of reform can ever bring about a system that cares, because bureaucratic computerised systems can no more be caring than the chair I am presently sitting on.

We hear much of the growing disparity of wealth in the UK and the gaping North-South divide.  We acknowledge this, yet we are still wedded to the idea of a one size fits all welfare policy.  This makes no sense.  What is not enough to live on in London, is a sustainable income in Yorkshire.  The every day expenses are significantly cheaper.  The pint that costs four pounds in London costs little over two in Bradford.  The equivalent taxi journey of home into town costs £20 in Bristol but a mere £6 in Bradford. 

So if we acknowledge there is an economic disparity, we must adapt our welfare policy to meet the reality. There may be an under-occupancy problem in London that requires a bedroom tax, but to suggest there is a shortage of homes in Wales and the North East is risible. It follows then that the welfare state is not fit for purpose and never will be. By continuing to pay national rates we are in effect overpaying people to remain on welfare and trapping them where they are.

Last summer, the BBC ran a magazine discussion piece entitled The unbearable sadness of the Welsh valleys, in which is brings to light the "recent studies" showing the number of prescriptions for mental illness drugs.  You don't need to be a professor of sociology to understand why.
"A quarter of working-age adults are on benefits - male unemployment is more than double the British average. Among the economically inactive, the students and the homemakers and the sick, a far higher proportion in Blaenau Gwent say they would like employment than across the country as a whole. These communities are desperate for work."
I urge you to read the whole piece. The piece paints a fairly accurate picture. Not entirely satisfied with what I read, I drove up to Cwm (which I am informed is pronounced "Coom") to see it for myself. It's the sort of place you would never drive through intentionally. There is an A road on the old railway line that cuts it off from civilisation and you would have to have business there to go there deliberately - so the outside world barely intrudes. Twice I was asked if I was a journalist by way of having an SLR camera on me. 

It seems the only visitors they get are journalists looking for tales of deprivation and woe. A lady I spoke to in the local shop said that "round here people have kids to get more money off the benefits", and from her other observations it seems the welfare class have become particularly savvy when it comes to navigating the benefit system. Once the rumour gets round that depression is classed as a disability, that means you no longer have to make tiresome journeys to sign on, and it quickly becomes the norm. (That is not to say that living in a Welsh welfare slum isn't depressing.)

But this is what I hate especially about the welfare state. It means we can turn our backs on the problem and warehouse these people, and salve our collective guilt with the knowledge that we pay their welfare through our taxes. This is not good enough. This is an abdication of our responsibilities as human beings. Allowing people to fester in the back hills to live miserable, degrading lives in real poverty is unacceptable.

The causes are more of mindset than actual access to jobs. The valleys are peppered with industrial estates, the public transport is half decent and there are plenty of rail links to Newport and Cardiff - both of which are less than an hours drive away. The poverty is poverty of the mind.  If you tell people they are helpless incapables for long enough, eventually, they will believe it. Residents complain of the lack of local jobs (while, ironically, sat in deserted working men's clubs) but the residents must learn that the jobs are not going to come to them, and for that they need to get out. 

Cwm is similar to a dozen other places in the region. These are dead-end (literally) village-towns reliant of welfare, which is entirely self-perpetuating. The local mine (which later closed) ceased mass employment in the region in 1982 with the acquisition of a skip winding system.  Consequently, the town has had no reason to exist for thirty years and that is never going to change.  So we face a choice.  Do we subsidise this generation and the next to live depressing lives on welfare or do we break the cycle?  I think we would soon find the mental illness "epidemic" rapidly resolves itself with an honest income and a routine. Simply subsidizing the poverty is the reason it remains a Prozac town.

The common complaint being that the total value of the welfare package outweighs the fiscal benefits of work and, even after some considerable tweaking (I shall not use the word reform), fag packet maths seems to confirm this. It is on this I come dangerously close to agreeing with Polly Toynbee in that a working wage does not go far enough. Her answer is the simpleton approach of merely legislating people into wealth which is absurd and wrong-headed. 

The challenge is to make the pound go further. If you add the salaries and pensions of those who work in the welfare state to the welfare spending figure and it starts looking like over £200bn. Cut that in sum half and we can abolish VAT with change to spare. That will help the less fortunate and create more jobs than government ever will.

That said, this is not going to happen. In the realms of the possible, what we can do is gradually draw down the value of the total benefits package so that staying locked away in the back hills of nowhere is no longer economically viable. In this regard, the bedroom tax is a useful tool. There are few if any self-contained single person dwellings in the region which means residents will have to move somewhere where there are homes and jobs. It also has an advantage in that landlords can't let these vacated three bedroom houses to people on welfare (specifically in fear of the bedroom tax), which means the rents either drop, or the houses go on the market at 70-90k.

This presents an opportunity for young families to get on the property ladder. In the case of the Welsh Valleys, the railway infrastructure is still there and working and is within 30 minutes commute of Cardiff or Newport and an hour from Bristol. So we could very well see a renewal of these places because the occupants would be working home-owners - and that would be a huge boost to the local economy.

The obvious advantage to those downsizing is a flat with lower bills and smaller council tax. If there is a shortage, existing larger properties can be converted to flats, which is in line with the general trend toward more single dwellings anyway. The opportunity there is to improve insulation to bring down energy costs and consequently infrastructure costs.

The second major reform would be a complete withdrawal of government from social housing.  Presently social housing is awarded on the basis of acute need.  My own views are known but you don't need to take it from me.  Read this by Mick Kent, CEO at Bromford Housing...
"The rationing of social housing, more and more in scarce supply, and its allocation according to greatest need and vulnerability, has led to a 'race to the bottom' and a focus on what customers CAN'T do rather than what they CAN do. This in turn has led to a dependency culture and caused deep and untold damage to society. I offer these views as a CEO who spends major amounts of time listening to front line colleagues and meeting customers face to face, on home visits, sign ups, interviews and on the 'shop floor'. And I say this with great sadness, as someone who has devoted his working life to social housing, but in the last 20 years we have been party to creating a dependency culture where qualities like enterprise, self-reliance, perseverance, skill and above all service to others, have been steadily devalued. Of course many of our customers through their own admirable efforts have still achieved great things. However I question whether collectively we have failed our fundamental mission and purpose, which is way beyond bricks and mortar - to inspire people to be the very, very best they can be."
The lessons therein are self-evident.  But it doesn't just apply to housing.  The whole welfare system creates a race to the bottom, and with a centrally administered behemoth welfare state, it is all too easy to game the system. 

What is fundamentally at wrong with the welfare state is that it starts off on the basic assumption that we are not capable of managing our own affairs. It takes decisions on welfare out of our communities and puts it into the hands of control freak, megalomaniac politicians of all stripes, and even with the best will in the world, you cannot devise a system that caters for the nuances and disparities of modern day living across the whole nation. So I have a proposal:  Replace the welfare state with the welfare parish.

We must devolve welfare rates, policy and delivery to local authorities. And by local authorities I don't mean our mega corporate councils.  Our
"local" authorities are not local. If I live in South Bradford, I am governed essentially by an authority that covers other towns like Keighley and Ilkley, Shipley and Bingley. Authorities comprising of populations larger than 100 countries in the UN. That is not local. Their systems would be no less remote and bureaucratic than a Whitehall one. Welfare needs to go even more local.  Regions of no more than 40,000 people as the upper limit.

I propose that we replace the dead wood "Job Centre" with parish committees of elected individuals who will sit as juries, and welfare claims and appeals have to be made to them.  The jury can then set their own conditions according to the needs and conduct of the individual making the claim.
That way, the people making the decisions know who they are dealing with, rather than decisions being made by a remote Whitehall supercomputer, or a low level bureaucrat in a remote call centre. The system is then more democratically accountable and less prone to the meddling of politicians. 

The anonymous nature of welfare produces anonymous outcomes. Local people make better decisions than London politicians and databases. Moreover, allowing each parish to run their welfare according to their own rules means they are free to experiment and innovate - and good ideas can easily be replicated where they work, and more importantly, ignored where they don't. You will never accomplish a fair or efficient system when it is a one size fits all system run by central government.

I would even go as far as to suggest that the funding for local welfare bodies comes directly from the locality, while enjoying charitable status so that citizens may freely donate to it. I dislike the idea of them being centrally grant maintained because as we have seen with US education, federal funding comes with strings attached and power is then sucked back toward the centre. The aim should be to gradually phase out any government involvement with the exception of auditing and inspection.

The flaw in this local approach is that revenues may exceed demands upon it in some areas.  I take the view that local authorities must devise their own rationing system, because if there is too much demand for welfare then evidently there are too few jobs in the region to sustain a community, and its population must seek opportunity elsewhere. 

I have yet to see an approach that covers all the bases, but I am beyond any doubt that the welfare state now is the chief creator of the problems it was designed to solve. It is yesterdays solution for yesterdays problems and the timid tinkering of IDS is not reform. What we need is a revolution in welfare that puts the decision making back in the hands of the people, so that it works both for those who claim welfare and those who pay for it.

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