Tuesday, 18 January 2011

Welfare Reform

For as long as I can remember, people have talked about the need to shake up the welfare system but governments have always ducked the difficult decisions. The culture of welfare dependency that has developed in recent decades is not only unfair on those who have to pay for it through their taxes, it is also a chronic waste of human potential to see so many of our fellow citizens trapped in poverty because they become dependent on benefits. How do we sort it out?

First, we need to make work pay. All too often people find themselves trapped in the situation where, if they work more than 16 hours a week, their benefits are withdrawn and they are worse off. This is crazy and we need to introduce a much simpler single benefit payment which is tapered so that it always pays to do more and work longer hours.

Second, if people come off benefits to take a job which doesn't work out, we need to make it easier for them to switch back to the support they had, otherwise they will be reluctant to try jobs in the first place.

Third, we need to be tougher about withdrawing benefits from people who could work but won't work. We also need to recognise that doing voluntary work is often a good first step towards employment because it helps people get used to getting out the bed and turning up for work on time and their confidence can grow as they become part of a team which depends on them.

Finally, we need much more support to help people get back to work. I meet many people who would like to do some work but they don't always get the support they need. This year the government is introducing the new Work Programme. It will be a radical new approach that goes beyond Job Centres and engages a whole range of private businesses, charities and social enterprises large and small to give people the help they need.

As well as the diversity of different projects on offer, the other big difference from what has gone before is that there will be payment by results. These private groups will only be paid if the people they are helping actually get a job and stay in work and they will be paid more for delivering in the most difficult cases.

In the past, agencies have all too often filled out some tick box questionnaire in an interview to pretend they have helped and then collected their fee. We need to put a stop to this by making sure they are only paid once they deliver. Payment by results is the best guarantee that good projects will grow and succeed and that the form fillers will be left behind. It will be an interesting year.