Saturday, 2 October 2010

The "universal benefit"

News that Iain Duncan Smith has reached an agreement with the Treasury for his "universal benefit" plan is encouraging. But a lot of questions arise. For one thing, there are people saying that it will take a decade to bring the scheme completely into effect. Partial or gradual implementation could be a mess. While we agree that the system should guarantee that someone is better off in work than out of it, there's a big risk that it will just encourage even lower wages. We've seen that happen with tax credits; why should bad employers pay more than the pittance of the minimum wage when many people will get that topped up by the taxpayer? Employers may well seek to take on more part-timers and temporary workers because it's cheaper for them, and the people they take on won't lose their benefits entirely. Even more worrying is that the new system can be used to time-limit benefits. We've made it so much easier for you, they'll say, so if you still won't work you're not going to get anything at all. That's certainly one way of saving money.
And what about the Work Programme? Payments to providers are supposed to depend on full-time, permanent jobs, while the new system will encourage part-time, temporary work. Will that change?
What are your thoughts?


  1. Being a single white male without any dependents, I don't qualify for tax credits or many of the other benefits beyond the basic JSA. Having a simplified "universal benefit" *may* encourage more employers to switch to using short term contract staff on low wages, but I probably wouldn't qualify for any top ups in any case.

    Another problem looming is the changes introduced in the 2008 Pensions Act that come in to effect in 2012 - Qualifying employees are automatically enrolled in a pension scheme with employers having to pay a minimum of 3% contributions and the employee, 4%. It is likely that staff on short term contracts (3 months or less) will not qualify. Anyone on less than £5,035 will also be excluded, in effect making part time workers cheaper.

    Part time and short term contract employment will most likely increase. A few people will gain from the "new" benefits system, but I suspect the majority will not.

    How will this affect "Work Programme" providers - Those on short term contracts will get referred back to the provider, and they will get repeat payments (either referral or outcome). The providers will be fully aware of any likely impact on referrals, and will push hard for a payment structure that benefits their bottom line.

  2. I tread where others on benefits fear to tread...cos ultimately we are seen as the scrounging, lazy, nare do wells that contributed to this recession. I might have a different view on whose responsible but it doesn't count for much and ultimately they are not to be held accountable.

    The issue I have (selfish me) is that this universal benefit might be to the lowest common denominator(and I don't mean that in a condiscening class term but it evidently is the case that the lower class will be hit hardest).

    I guess I am (at present) seen as one of the lucky ones because I get DLA and Income Support and I am sure that there are people working whose income is less than mine and I find that disgraceful for them. Having worked for over 20 years (before my illness got the better of me and aggrevated the worst) I appreciate what it is like to toil for your income so empathise with those who toil for very little of it.

    However, I cannot see how disabled people (particularly those of us who live on our own, with little external support) will survive on approx £50, which is what I think is going rate for jobseekers allowance.

    Are we really going to be left homeless? I am sure there are those that will be demanding I earn my keep. If I could, I would. I have tried 3 times since I 'lost the plot' to try and get back into work. The last job lasted 1 month. If there is a god, I could pray for divine intervention or a drug that actually does work for me..and get me capacitated enough to hold down work until I am 70 but realistically, I doubt that will be the case and I am not able to will myself better. Bipolar doesn't work that my case!

    I really do fear that I will not be able to remain in my home and I dread what sort of life the streets offer me. Maybe I am paranoid (overly so) but I think there will be a section (if not sections) of society...left to fend for themselves and when they can't die.

  3. From what I have read in the press (limited information it is at this moment) DLA will be maintained as a separate benefit from the Universal Benefit. I think though that we all need to realise here that what the Government are trying to do is to weed out the culture of benefit dependency among those who persistently REFUSE to work and feel it is their god given right and choice to choose whether they want to work or not.

    I have worked in employability for over ten years now in various organisations including A4e so feel I have some qualification on the comments I have made above. I have come across many many individuals who cheat the system, refuse to work, wont work, are lazy etc etc but equally I have come across people who have fallen on bad times who want help and support getting back to work.

    The problem with any universal work programme is that the Govt will contract these schemes out to large organisations like A4e. A4e are not interested in improving peoples lives, they are only interested in profit and profit only! Their mantras of "do well by doing good" and "improving peoples lives" are merely glossy marketing tools to make them look moral and client focussed. Having worked for the organisation I know this for a FACT. Contracts like the work programme should never be awarded to large national organisations whose sole aim is profit for numerous reasons. As soon as you put a per capita figure on any programme the focus is removed from improving the person prospects to forcing them out the door into non sustainable work with the threat of sanctions so outcome payments can be claimed by the delivery organisation. The only organisations that will ever have an impact on tackling the scourge of persistent unemployment will be those not for profit charitable organisations with minimal bureaucracy and a non draconian management structure.

    It still astounds me in this day after approx 20 - 30 yrs of failures of back to work programmes that the Gov still presist in involving private sector organisations to help reduce the levels of unemployment. Smaller organisations who have a local flavour and understand the local issues, surely would be better equipped to help the unemployed in their local area? Whilst many will argue that this would be hard to manage in terms of ensuring quality delivery, time and time again it has been proven that generic programme delivery nationally does not solve local issues.

    Outcome based payments for the current Flexible New Deal programme provide no incentive really to securing sustainable work for the unemployed by provider organisations. The larger organisations who deliver these contracts all have the advantages of economies of scale and therefore know they can survive on the on programme payments they receive and the small bonus paid when the client moves into work. If the client doesnt reach the 13 and 26 week milestones its no big loss as the company will already have more bums on seats and so the cycle continues.

  4. Just commenting to praise you on your point regarding Universal Benefit and Work Programme. There is some conflict.

    I don't think it is anything to get excited about. The purpose is to SAVE money and not make work any more profitable. Some people have already calculated they would be worse off in work than NOW via tax credits etc.

    What I found funny is, it will cost £9bn (quoted at £3bn by Government... and its 3 years away) to implement! This is after thousands of cuts even to save a few million here and there (Central Gov; don't get em started on local cuts!) ... not to mention the bigger cuts.

    I was doing some common sense thinking yesterday, my conclusion was how could it cost so much to implement? If the resources exist at current for jobseekers, ESA, tax credits etc. how will this new system require so much more?

    Its highly likely they would keep with the same computer system - maybe adapt it slightly.

    There is troo many types of benefit, but the main groups of benefits are there for a reason (i.e. unemployed, disability, in-work, child benefits) sticking them into one will cause much more fraud, but more so... too much more official error.

  5. The cost is because a) people will continue to get benefits after starting work and b) there will have to a whole new computerised system that allows a real-time calculation of benefits i.e. your income can vary and your benefits will track that. Yes, it can mean more error, but not more fraud.
    Of course it's about saving money in the long run. And I noticed that Francis Maude, when asked this morning if some people would find their benefits cut, dodged the question (but that may just mean that he didn't know). But let's wait for the detail.

  6. There arent many job vacancies, and what there is is invariably part-time and temporary.

    We have a second rate government and a third rate economy. There never will be enough jobs to go round. So all this talk about stopping benefits for jobseekers who refuse to take a job is just playing to the gallery of Daily Mail readers.

    The reality, I suspect, is that we will never see a reduction in the millions of claimants on benefits. In fact, I predict a increase over the coming years

  7. Stop benifits for refusing to take a job. what jobs!? placements i bet companys would be quick to find a placement for some one! not a job but a placement. work for the dole? what all week? how much is that an hour? sureley it does not add up to minimum wage! hang on its illegal to for less than the minimum wage? lions led by donkeys springs to mind. peacefull non compliance with the system lets bring it down.


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