Opinion: Welfare reform and poverty

Recently on Lib Dem Voice I wrote a short article arguing for equal reform emphasis between poverty alleviation through welfare, and longer term actual poverty reduction including inter-generational poverty reduction . It seems to me that in times of budget squeeze, the means for reducing the need for welfare  – social safety net – in the first place, are worth re-thinking. (To pre-empt objections I am not arguing against the provision of welfare, or for a reduction in weekly welfare payments, or for exclusionary policies).

The really difficult challenge for policy in reducing poverty and the need for welfare is the institutional one. First, because the division of responsibility between parts of government and between central and sub-national government make it highly problematic to address regionally and locally based causes of poverty. Second, because the British state finds it difficult to see problems from the point of view of the individual – without departments descending into a defensive blame game.

For example, what can reasonably be done over the longer term to help a single mum in housing association accommodation with three young kids in Hull, is very different from what can be done over the longer term to help a long term unemployed couple in their fifties in private rented accommodation  in Warminster.

For this reason longer-term anti-poverty remedies must be local, but the UK system is not yet set up for this. There are however some common elements when considering how the poorest can be better helped. For one, access to education and training qualifications is patchy in the UK. Vocational and community colleges can be twenty or thirty miles away from fair-sized towns. They sometimes lack ambition – providing only very basic courses and lacking in ‘progression’ from basic to more advanced programmes. In addition it is rare for courses offered to take into account any professionally collected data on skills needs/shortages in the area, especially among SME’s where the majority of UK jobs reside (and to pre-empt objections again I am NOT arguing for the entire UK education system to be orientated to the needs of rapacious multinationals). Provision for single parents is even more patchy.

There is also the whole area of inter-generational poverty. If one generation becomes a home owner the next generation is much less likely to be in extreme poverty for example. Translating that into policy however can be a minefield. Local authority housing sales are controversial in the LibDems, but objectors do have a point in that the number of subsidised dwellings was not replenished and as a weapon against poverty it became illogical (what do local authorities do after all the subsidised housing is purchased by the tenants ?). A range of instruments is needed if housing policy is to be used to reduce poverty in the long term….shared ownership needs an upgrade, local authority rent-to-buy can be beneficial, mortgage support can help….but not at the expense of the provision of rental only properties.

There are many other areas of long-term poverty reduction policy, too numerous to go through here, but they include policy on regional mobility, workshop premises provision for new SMEs, combined literacy and skills development, certified experience schemes, and new ways to address the fallout from family break up.

In my experience the best the authorities can do for the very poorest is to help them escape poverty altogether over the longer term, even inter-generationally. And what experience is that you might well ask ? Well I don’t want to adopt the Pythonesque competitive inverse snobbery approach for which Labour politicians are so famous.

* Paul Reynolds works with multilateral organisations as an independent adviser on international relations, economics, and senior governance. He is an elected member of FIRC and an Executive member of Liberal International (British Group).

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  • Perhaps the biggest change is to effectively reduce the level of ‘welfare’ and increase the level of ‘investment’. Whilst there is a certain amount of semantics involved, I do believe that we need to make it very clear that in providing some types of monies to people that there is an expectation on them not only to use the monies received sensibly but to do things that will enable the investment to be repaid.

    I have concerns that the current emotional debate about welfare and benefits that effectively calls any one who is a higher rate tax payer wealthy and hence should be ‘fleeced’ unhelpful; we need as many young people as we can get to aspire to become higher rate tax payers, so that the welfare/investment system can continue and invest in the next generation… From my experience people in their mid-20’s from strong working class and less well off backgrounds can have identity problems when they discover they are likely to become higher rate tax payers and hence cross the line… it certainly was a shock to me to discover that I earnt more than my father…

    Obviously, I’m talking about long-term expectations and culture rather than the cut-offs that get applied to job seekers allowance, as the objective is to encourage people to help themselves.

  • 1st line typo ‘ policy alleviation’ should be poverty alleviation?

  • Paul Reynolds 1st May '13 - 3:45am

    Sorry for typo.

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