Benefit Reform Backlash

posted: 01/12/2008

Gordon Brown is facing a growing backlash against Labour's welfare reforms, which will give private companies a greater role in moving the unemployed back to work, as some of Britain's biggest unions join anti-poverty campaigners in a new national campaign against the plans.
 

As the prime minister pledged over the weekend to respond to the economic downturn by speeding up the reform of public services, the new campaign warned that a "draconian" welfare policy was not the right one in a recession.

HIV impacts
The reforms will be one of the key elements of the government's legislative programme to be outlined in Wednesday's Queen's speech to parliament. The main reform to affect people living with HIV is the review and transfer of all existing claimants on Incapacity Benefit (paid for long term illhealth or disability) to the new benefit Employment Support Allowance. The tests for receiving this for long term sickness are significantly tougher. The government's intention is to reduce the number claiming for long term sickness or disability by about 1 million. These one million will either have to find work (very difficult as unemployment rises in a recession) or claim Job Seekers Allowance - about £20 a week less. People on this have under £9 a day income. Another element of the reforms is to part-privatise job seeker support services. The fear is that the "harder cases" such as people with long term unpredictable health conditions and those with stigmatised conditions will be left behind. The contracts for job seeker support services pay by results and there are tough penalties for failure. In the recesssion the companies will be driven by the contract penalties to cherrypick the easiest cases.

Campaigners against the welfare reforms, led by the centre-left pressure Compass and unions including Unison and the Public and Commercial Services Union (PCS), said: "Many of the plans were unacceptable when they were first published and the worsening economic situation should lead to a fundamental rethink."

Brown said yesterday that the details in the Queen's speech were the "biggest New Labour project of all" and rejected claims that the government's plans to raise the higher rate of tax to 45p marked the end of New Labour. "Doing nothing is not an option," Brown told the Progress conference in London. "This is the biggest New Labour project of all: to give people confidence and hope that we can build through this downturn into a better economy and society. It will mean not a slowing down of reform but only a stepping up in the pace of reform."

The welfare reform plans, based on a report by the city financier David Freud, have been in the pipeline for some time. Government sources said the changes in approach to the long-term unemployed were more necessary than ever.

But the new campaign group is alarmed about a drift to the right in attitudes to the jobless and has seized on warnings by the government's own advisers, the social security advisory committee, to suspend plans to force single mothers with children under 12 to seek work or face benefit cuts.

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HIV Jobless Maybe Sidetracked

posted: 23/09/2008

Tens of thousands of jobseekers living with HIV face being written off and "parked" on low-paid unemployment benefits as an unintended consequence of the government's £2bn plans to use private contractors to provide support for people to go back to work and tackle long-term unemployment, a thinktank warns today.

People needing greater levels of support to find work, such as those with longterm conditions like HIV, will be sidelined under changes taking effect next year, according to the Social Market Foundation (SMF).

The ThinkTank claims that because the private contractors will get paid once for each person they place into work, whatever their circumstances and suupport needs, there will be no incentive for contractors to work with those who may require more help to overcome disadvantages caused by their backgrounds, poor literacy and numeracy, disability or health problems.

"Those furthest from the labour market will inevitably not be offered services appropriate to their needs - they will be 'parked'," the thinktank says. "This will occur because the design of the payment system sets the profit motive of contractors in tension with the aim to help all clients."

The new system is due to start in October next year. After 12 months on jobseeker's allowance, working with Jobcentre Plus advisers, unemployed people will be passed to contractors paid to find them work in whatever way they think most effective. Bob Warner, chief executive of Remploy, which specialises in finding work for people with complex needs, said: "We are concerned that those long-term unemployed, hard-to-place groups do get the support they need under the new contracting arrangements."

The employment and welfare reform minister, Stephen Timms, said: "We will look closely at the results of the first phase of the contracts and carefully consider if any changes need to be made."





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