From a people-centred perspective, the welfare debate is back to front: the goal must be to build capacity, not simply to reduce budgets, argues Julian Dobson.
In January 2013 the Greater Manchester Poverty Commission reported that 600,000 people were living in ‘extreme poverty’ and a further 1.6 million – nearly half the conurbation’s total – were at risk of sliding into poverty.
These figures were quickly forgotten by national media, but should give pause for thought. A city where half the population struggles to make ends meet is one where public policy has failed. Neither welfare nor work are enabling enough people to move out of poverty.
Incomes and standards of living have not recovered as they did after previous recessions. The Office for National Statistics recently found that net national income – the total income available to citizens – had fallen by 13.2 per cent four years after the onset of the 2008 recession, whereas in the early 1980s and 1990s it had returned to pre-recession levels at a similar stage.
More than one fifth of British workers are low-paid and the proportion is higher than in comparable economies. Nearly 10,000 more working families every month require housing benefit to help pay their rent. The Trussell Trust, which provides food banks helping people in crisis, fed twice the number of people in 2011/12 as it did the previous year.
In these circumstances, bullish talk of economic growth and investing in infrastructure is not enough: the benefits will take too long to reach those living in and on the edge of poverty. Neither is it enough to expect the policies of localism alone to make a difference in our most deprived neighbourhoods. We need localism that creates work and opportunity, rooting recovery in the communities that are most crying out for it.
This means rethinking our approaches to work and welfare. My new report, published by the think tank ResPublica, is called Responsible recovery: A social contract for local growth. The title takes the current political debates about fairness and places them in the context of real people’s lives, arguing that reciprocity and contribution must be at the heart of any sustainable recovery, and that government policy needs to enable all to contribute to the best of their resources and abilities.
The report takes the ‘sustainable livelihoods’ model that has been tried and tested in the context of international development, and picks up on work by Oxfam and Church Action on Poverty to apply it in the UK. It views the journey out of poverty as a shift from surviving to coping, from coping to adapting to change, and from adapting to accumulating.
A PEOPLE-CENTRED APPROACH TO WELFARE
The assets people need to accumulate to escape poverty are not just material. They include social assets such as family, friends and neighbours; human assets such as practical skills; and public assets such as local services, infrastructure and community organisations.
Undermine one set of assets through policies such as the ‘bedroom tax’, which forces individuals with ‘spare’ bedrooms to move or lose benefit entitlement, or through funding cuts to local voluntary organisations, and it becomes harder to build the others. The loss of affordable childcare, for example, can make all the difference between a job being worthwhile and becoming a poverty trap.
From a people-centred perspective, the welfare debate is back to front: the goal must be to build capacity, not simply to reduce budgets. Welfare payments are just one part of a matrix of factors that support people’s livelihoods in poor communities.
These factors include low-paid or part-time work, underpinned by the tax and benefits system; informal and undeclared work, and non-monetary exchange such as swapping and sharing; and what the New Economics Foundation calls the ‘core economy’ – ‘the family, neighbourhood and community which, together, act as the operating system of society’.
Contributory welfare fit for 21st century conditions needs to do more than simply help the poorest avoid destitution. It should reward the ‘relational practice’ of pro-social relationships, reciprocity and community life, rather than focusing on the volume and frequency of job applications, and glib political narratives of shirking and skiving.
In social housing estates, 56 per cent of working age residents did not have a job in 2011. The number of working people living in poverty is now even greater than the number of those without work who are poor. A telling indicator is the proportion of housing benefit claims now being made by working people: between January 2010 and March 2012, 272,160 out of 363,550 new claims were made by people in employment.
This is why the debate about welfare must also be a discussion of housing policy. Housing is a foundational asset to communities, providing the basis from which families are able to construct their lives, build social networks, raise their children and look for work.
LOCALLY RESPONSIVE HOUSING AND WELFARE
Current housing reforms undermine community life. The ‘affordable rents’ regime, which allows landlords to set rents at up to 80 per cent of market levels, makes it more difficult for tenants to escape poverty as a greater proportion of anything they earn will be swallowed up by rent payments.
Similarly, the imposition of the ‘bedroom tax’ illustrates the unintended consequences of a top-down doctrine of fairness. It may be ‘fair’ to suggest that one person should not occupy a three-bedroom house when it could be given to a homeless family: but that ignores the geographic nature of housing need and demand.
To turn social housing policies into a homes policy that supports communities, DCLG and the Homes and Communities Agency must recognise and support the wider community role of housing providers. Development partners should be selected not only on their ability to provide value for money when building, but also on their record of creating long term social value in the communities they invest in.
This can be taken further by transferring ownership or management responsibility to resident-led bodies or sharing it through cooperative or mutual structures to ensure local people are fully involved wherever possible in budgeting and decision-making. Locally rooted organisations such as tenant management organisations are well placed to identify residents’ skills and talents.
Locally responsive housing needs to be accompanied by locally responsive welfare. The guiding principle must be to bring services and opportunities as close as possible to the people they are intended to help.
Local control of the Work Programme, with advisers recruited from the communities most in need and based within those neighbourhoods, would help to build trust. So too would recruitment policies that seek out people with skills and talents from within disadvantaged communities for the public service work that needs to be done within them.
Liverpool’s city deal (see case study) is an important step towards localised welfare, but there is potential to go much further. The more people who are out of work and claiming benefits are involved in the decisions that affect their lives, in partnership with people and organisations they trust, the more likely it is that those decisions will help to improve their choices and prospects and break the cycle of poverty.
A further step would be to revive the proposals for a Community Allowance, advanced by Locality and other community-based organisations over the last decade.
A Community Allowance, integrated with Universal Credit, could pay benefit claimants to do short term or part time ‘stepping stone jobs’ with local organisations that improve wellbeing and quality of life within the community. While doing such work their benefits would be protected, giving them the security to learn new skills, gain work experience and make a valuable contribution to their neighbourhood.
These suggestions will not solve poverty or create economic growth in themselves. But they could help to create a policy environment that seeks to enable all to contribute to society, rather than widening current inequalities.
- Responsible Recovery: A social contract for local growth is available to download from www.respublica.org.uk
BRINGING HOUSING CLOSER TO THE PEOPLE: ROCHDALE BOROUGHWIDE HOUSING
In March 2012 more than 13,750 homes previously owned by Rochdale Council were transferred to a new organisation as the first step in creating a fully mutual society owned by tenant and employee members. Tenants and residents will have the chance to be fully involved in the organisation’s budgeting and financial strategies, as well as in the local management of their neighbourhoods.
Rochdale Boroughwide Housing will be the largest mutual housing organisation in England, with 16,000 tenants and 600 staff looking after 52 separate neighbourhoods. Employees and tenants have been working together to recruit members who will play an active role in managing their new homes.
Changing the culture of a large organisation can be tricky. But the prize is an organisation where the traditional paternal relationships give way to shared values, and where both tenants and employees have more say about the direction of the organisation than they did in the past.
The new mutual has signed up to the principles of the international cooperative movement as well as declaring its own values of ‘responsibility, equity, democracy, pioneering, openness and honesty, caring and championing’.
LOCALISING WELFARE: LIVERPOOL’S CITY DEAL
Liverpool City Council is already taking tentative steps towards a more flexible approach to welfare through its ‘city deal’ negotiated with the Department for Communities and Local Government last year.
As part of a ‘Liverpool approach to welfare reform’ it will explore how benefits administration and work programmes can be joined up locally, with the possibility of ‘earned autonomy’ for Jobcentre Plus in the city, localised support for people leaving the Work Programme, and funding to support ‘enhanced allowances’ for claimants who take up new opportunities provided through collaboration between the Department for Work and Pensions and the city council.
I think this is an important piece. As is the wider report, which this piece refers to. In is important because it adds to a much needed debate about localism, what we do about poverty. and what the future for the welfare state may be.
However, four thoughts.
1. Localism is not virtuous in its own right- that depends on how it is deployed. If deployed carelessly, it will divide communities and splinter social action and solidarity, as places and communities increasingly compete for scarce resources and a slice of a diminishing pie. In this, localism is not a bulwark or remedy, it is merely the clueless friend of those who would support the break up of anti establishment, alternative collective power and bargaining.
2. Localism, if deployed badly or cynically, can merely erode fairness and increase injustice via a reduction in universal public services provision. It can be and is sometimes used as a Trojan horse for doing things which make hardship more, not less, likely. i.e. The Social Fund moving from DWP to local government.
3. We must start from where we are. To build ‘responsiveness’ into a welfare system, we need to have communities and people who have the time resource, and are relatively stress free to be actors and agents of change. However, for many this is not the case. If you are poor, you actually have little time (too busy making ends meet), you have no spare resource and you are stressed out. This is not a patronising view or big welfare and big state dogma. It’s the lived reality of poverty and disadvantage. So unless we have robust national policies which reduce fairness in the first instance, all this local activity, is merely placing the cart before the horse – or worse, its merely massaging inequality and providing a false dawn for the growing poor.
4. In looking for alternatives and ways out of the problems of the welfare state and poverty, we must confront the obvious. England remains one of the most wealthy and fortunate countries in the World. Thus, ‘responsible recovery’ must not just look solely at the people, we must look at national economic and social stewardship which is failing many people. It ain’t acting responsibly. Sort that, and we wont need recovery, we will have an economy which works with and for its people.
Thanks for the comments, Neil. I think you make good points.
However, there’s a risk of getting into a chicken and egg debate about national and local action. By focusing on local action in the report I certainly don’t dismiss the value and importance of national policy, especially on fairness and equality – achievements like the minimum wage, to name just one, should not be undermined.
However I think as a general principle, decisions are generally better when they are taken by, or as close as possible to, the people they affect. There are always questions of appropriate scale – railways can’t be planned locally – but there is no reason why neighbourhood-based services should not be managed by and accountable to the people they most affect.
As you say, we must start from where we are. And we are a very long way from national economic policies that work with and for the people. To suggest that people living in poor neighbourhoods should wait until we’ve got national policy right before we devolve power or responsibility is to condemn them to dependence on a national political process that has failed to deliver since the late 1940s. Where we are is messy and unsatisfactory, but let’s not use that as an excuse for inaction.
Julian, Thanks for replying and as is often the case we agree on much.
None of us know the answers, and that is why your paper, is grist to mill in thinking through where we should/could be going. As I see it, it is about a new, as yet, unresolved balance btwn national and local action.
I agree wholeheartedly that some decisions are generally better when they are taken by, or as close as possible to, the people they affect. However, like your railways example, I would say that poverty, inequality and welfare cannot solely be adressed locally. Poverty should be perceived as affecting us all, and that is why we need to maintain strong national fairness policies alongside local action.
I agree there is no excuse for inaction, when it comes to poverty. We must get on and do, as many communities, local government and organisations such as CLES are.
But we also must not create a less toxic, ‘big society mark 2’, which provides a trojan horse, for those who would like the state to wither and who ignore the fact that poverty, is caused by ongoing national polices which systematically favour the haves and not the havenots.
We must slam policies which place more burdens on the poor and let the wealthy of the hook. Refuse to support the unravelling of safety nets masquerading as ‘reform’ and ignore solutions which merely put even more pressure on communites to do it for themselves.