Welfare reform: who feels the benefit

With David Cameron gung-ho for reforming benefits, Ruth Patrick is sceptical about who really reaps the rewards of the back-to-work agenda

Political folklore has it that David Cameron lists Tony Blair as the British Prime Minister he most admires. One can see the reasons why a smooth, “modern”, PR-oiled operator such as Cameron would seek to emulate Blair, the leader who introduced spin doctoring to Britain and became famous for appearing as comfortable on This Morning’s sofa as at the despatch box in the Commons. While hoping to capture the “best of Blair”, Cameron is also reportedly determined not to repeat what Blair describes as his greatest mistake – moving too slowly in New Labour’s first term in office. David Cameron has certainly taken this message on board, with the first year of Coalition government seeing a dizzying and exhausting array of new policies, radical benefit cuts as well as the odd (if often welcome) high-profile u-turn.

Nowhere is this more noticeable than in the policy arena of welfare reform where the Government is pressing ahead with drastic benefit reductions, changes to welfare entitlement as well as the complete overhaul of certain benefits such as Disability Living Allowance. Much of these reforms are justified as part of efforts to “help” people off benefits and back to work, with this summer seeing a flurry of new activity here.

To great fanfare, the Work Programme has been launched, hailed as the biggest programme of back-to-work support this country has ever seen. The programme incorporates help and support for those on Jobseeker’s Allowance (JSA) as well as claimants on the “work-related activity group” of Employment and Support Allowance. The carrot of the support promised under the Work Programme is joined by a stick: it’s compulsory to participate and if you don’t you risk tough benefit sanctions. The Work Programme is also big business, with private firms and voluntary sector agencies paid to deliver the programme for government. Providers are paid by results, meaning that they have an extra incentive to get people back into work. Unfortunately, there are fears this could lead to providers selecting those claimants easiest to help as firms seek to maximise profit margins and please corporate investors. Those with substantial barriers to work may get left on the scrapheap, particularly when a cost-benefit analysis finds it makes little economic sense to help such individuals find a job. To counter this, the Government is offering providers a tiered payment scheme – with those benefit claimants supposedly furthest from the labour market attracting the biggest financial pay-outs when they are helped into work. Certainly, the rewards on offer are substantial – a provider who manages to sustain a former Incapacity Benefit claimant in work for two years stands to earn as much as £14,000 – per claimant! Today, disabled people are a marketable commodity – with serious questions remaining about how this will affect the support they receive.

ATOS Healthcare, the company behind the Work Capability Assessments (WCA), also profits considerably from all this welfare reform, with the contract to reassess Incapacity Benefits netting them a cool £100m a year. Ironically, despite the high level of incorrect WCAs, ATOS’s payments aren’t docked where they are found to have wrongly declared someone fit to work. Payment by results only goes so far, it seems.

As well as all this, the Coalition has launched Mandatory Work Activity, a programme of four weeks compulsory work experience for JSA claimants who it is felt need an extra nudge (read push) to acquire the habit of work. Those undertaking this four week programme may find themselves cleaning streets or scrubbing out graffiti, activities more commonly associated with the explicitly punitive Community Service.

When we look back on the Cameron years we may well have a long list of complaints of the Coalition, but a slow start on entering office certainly won’t be one of them. Criticisms might be better directed at Cameron’s over-zealous approach to welfare reform, with a peculiar neglect of just one detail: where are all the jobs, David?