What’s gone wrong with welfare reform – and why children are paying the price

Sam Royston is author of the new book Broken Benefits: what’s gone wrong with welfare reform [Policy Press]. The book provides a guide to the complex world of social security benefits and an analysis of what has gone wrong and what needs to be done to get the system right. Sam is Director of  Policy and Research at The Children’s Society and chair of the End Child Poverty coalition and regularly gives evidence to parliamentary committees on welfare reform issues.  Workingmums.co.uk asked him about his views on the benefits system.

What or who should the benefits system be for?

Sam Royston

Sam Royston: Depressingly, we often view the benefits system as simply a mechanism for preventing destitution. Whilst it certainly does need to serve this purpose, this is a deeply un-aspirational vision of the role that social security can play in society.

My new book makes the case that social security shouldn’t just be about heaving people up above the poverty line, it should also help to correct for inequalities in need which cannot be met through employment.

For example, suppose two people are doing the same job and earn the same amount of money, but one is a single parent with a disabled child – those same earnings are going to go a lot less far for that family. An employer is not going to pay more to correct for this, but the benefits system can provide that correction, to ensure that people have the money they need to live on, not just what they are able to earn.

You talk in the book about a lack of understanding at policy level about how different benefits interact. What can be done to counter this and build expertise?

SR: Well, a good starting point would be to treat welfare rights workers with the dignity and respect the profession deserves. It is an astonishingly hard and technical job, but it is also poorly paid, often insecure work. The profession has been put under particular pressure in recent years because of the decision to remove welfare advice cases outside of the scope of legal aid.

Improving the provision of welfare rights advice would not only help to make sure claimants get the support they need to challenge bad decisions, but the more we have noisy expert professionals making a fuss about important issues, the harder it is for policy makers to ignore their concerns.

Is this also a factor for journalists writing about all the different tweaks and changes that are made?

SR: One thing which really bothers me about reporting of changes in the benefits system is that issues only seem to attract journalists attention after they have started to affect people’s lives – by which point it is often too late to do much about it.

For example, it had been known for years that there were delays in payments built into Universal Credit. It was no surprise then, that when the system started to come into operation these delays had a huge affect on people who relied on the new system. However, the political and media pressure to make changes only really came at the point when the changes were being implemented – a lot of suffering could have been prevented if this had come much earlier.

There are many further problems with Universal Credit – in particular affecting disabled people. I hope something can be done to address these before they begin to affect people’s lives.

SR: If there is one image that sums up contemporary attitudes to welfare more than any other, it is surely that of the layabout slob, sprawling on the sofa, can of beer in hand and vacant eyes fixed on daytime TV – living a ‘life on benefits’.

The scene may seem cliched, but it is built on a story that goes to the heart of public understanding of the benefits system – that those ‘on benefits’ are (by definition) out of work. It is frankly a myth, and one so pervasive that even those receiving state welfare often don’t see themselves as ‘on benefits’.

As in all areas of policy debate, the best way to promote engagement with social security issues is to show how they connect to people’s own lives. Combatting this myth of who is ‘on benefits’, and showing how social security is likely to provide support for the vast majority of people at some point in their lives, we will engage a much wider audience with these issues.

The government says that Universal Credit is about making work work, but that is not the reality for many parents, is it?

SR: Put simply – no. There were many good intentions behind Universal Credit, but introducing a reform of this scale on a shoestring has deeply undermined any potential that it had.

You only need to look at a change being proposed at the moment – setting new eligibility rules for Free School Meals for families in receipt of Universal Credit – to see how far Universal Credit is slipping from its original intentions. Under the Government’s current proposals, an income threshold (of £7,400 per year) would be set, and if someone earns above this threshold they would lose their Free School Meal entitlement altogether. Since Free School Meals are worth a considerable amount of money,there will be many people earning a little in excess of £7,400 who will be left in a position where they would be better off taking a pay cut in order to get their Free School Meals back. This is an astonishing position – since the whole point of Universal Credit was to ensure that people were better off when they increased their earnings!

Can Universal Credit be reformed or does there need to be a much more root and branch reform of the whole system?

SR: Too often the answer to improving the benefits system seem to be to scrap it all and start over again. This terrifies me. Whenever there is holistic reform of the benefits system people’s lives are thrown into turmoil. I think Universal Credit needs to be made to work – or if it cannot, it should be scrapped altogether and we should focus on improving what we had before.

However, we have to be careful to remember that whilst Universal Credit is a really important reform, it is far from representing the whole of the benefits system – and other parts (from the Personal Independence Payment through to Pension Credit) will not be rolled into Universal Credit and need attention.

At the same time, millions of families are still receiving benefits which will – over the coming years – become part of Universal Credit. But for now, some of these benefits are not getting the attention they need – for example, I wrote about problems with soaring Tax Credit overpayments here.

Is there the political will for this? What has the response to your book been from policymakers?

SR: At the moment I think there is a lot of attention on firefighting short-term emergencies in the benefits system –such as problems with the administration of Universal Credit.

This is important, but I would like to see more thought given to developing a longer term vision for what an effective social security system needs to look like. Making sure that payments happen – and happen on time – should be the absolute bare minimum of what an effective social security system should be achieving, but I would like the aspirations of policymakers to go beyond this and to fight for a social security system that provides the keystone in a fairer, more equal society.

You mention that children are the most likely to suffer from the way Universal Credit is being implemented. Are there any simple reforms that can be made to make the system better in the short term, such as removing sanctions and the child benefit limit?

SR: Children are the most affected by a wide range of benefit cuts and this is reflected in the expectation that, by 2020, as many as five million children will be living in poverty – 1.4 million more than in 2010.

There are two main reasons for the disproportionate impact of social security changes on low-income families with children. Firstly, they are likely to be more reliant on benefit entitlements than equivalent working-age families without children, because of higher levels of need in the household. This means that benefit cuts that are not specifically targeted at families with children (such as benefit freezes, cuts to support with housing costs, the introduction of the benefit cap and so forth) are nevertheless likely to have a disproportionate impact on this group.

Second, many of the cuts that have been introduced in recent years have placed a particular emphasis on children’s benefits. These include the loss of the family element of Child Tax Credit, the two-child limit for the child element of Child Tax Credit and Universal Credit and the reduction in disability support for many families in receipt of Universal Credit.

Addressing the impact of social security cuts on children should certainly be a priority, but it will require the Government to recognise that it is right to spend a bit more money to support children in families who need it.

What changes are needed in terms of childcare support?

SR: Under Universal Credit parents can claim up to 85% of their childcare costs back through the benefit. However – worryingly – this support is provided on the basis of reclaiming childcare payments that have already been made to a provider. This leaves families with the challenge of working out how they are going to manage to cover the upfront costs of childcare in the first place before they can claim back some of these charges through Universal Credit.

A further concern in Universal Credit is the testing of what has been called “in-work conditionality” – the expectation that, even if someone is in work, they should be looking to increase their hours or pay (until they earn as much as 35 hours at the minimum wage) or else face their benefit being reduced or stopped. They may be expected to do this by increasing their pay in their existing job or by finding a new one. For parents with childcare arrangements which suit them well in their current role, this expectation may create a whole host of additional difficulties.

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