No-one Written Off: Reforming welfare to reward responsibility

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No one written off: reforming welfare to reward responsibility asks to be judged on increasing social inclusion through employment and on continued falls in child poverty. Yet with both the numbers of children in poverty and the number of households below the poverty line rising over the last two years, Oxfam believes that a purely work-focused approach is not sufficient. The approach outlined does not take a holistic view of people’s livelihoods, and fails adequately to tackle the sustainability of those livelihoods. We argue for a broader, more holistic approach to the problem of poverty than the narrow focus on labour market exclusion. Our key recommendation, therefore, is for a change of approach to government thinking on benefits and poverty in their broadest sense.
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    Response to Department for Work and Pensions consultation: No one written off: reforming welfare to reward responsibility  Summary Our objective is a social revolution: an 80 per cent employment rate – the highest ever – and reducing social exclusion by improving employment prospects for people facing the greatest disadvantage; ending child poverty, for the first time ever; and equality for disabled people, the next step in the onward march of equal rights. Executive Summary, No one written off: reforming welfare to reward responsibility  Oxfam welcomes the opportunity to respond to the government’s latest proposals to reshape the welfare state. No one written off: reforming welfare to reward responsibility  asks to be judged on increasing social inclusion through employment and on continued falls in child poverty. Yet with both the numbers of children in poverty and the number of households below the poverty line rising over the last two years, Oxfam believes that a purely work-focused approach is not sufficient. The approach outlined does not take a holistic view of people’s livelihoods, and fails adequately to tackle the sustainability of those livelihoods. We argue for a broader, more holistic approach to the problem of poverty than the narrow focus on labour market exclusion. Our key recommendation, therefore, is for a change of approach to government thinking on benefits and poverty in their broadest sense. In addition, we make a number of more specific recommendations, summarised here: ã The government should adopt a holistic Sustainable Livelihoods Approach to anti-poverty policymaking ã The tax and benefit systems should be integrated and revised thoroughly from a pro-poor perspective ã In the short-term, specific interventions should be developed to increase the flexibility and responsiveness of the benefit and tax systems ã Both demand and supply-side policies to increase employment should be pursued ã Equality impact assessments of all proposed changes should be carried out and published ã The incentive structure for Flexible New Deal providers should value sustained employment and intermediate non-employment outcomes as well as entry to employment ã Employment services should treat customers respectfully and maximise their income ã  Additional benefits sanctions and compulsory work programmes should not be adopted   ã The government should challenge negative attitudes and stigma towards people living in poverty 1  1. About Oxfam GB Oxfam GB is a British international development agency working to end poverty both internationally and in the UK. Oxfam works to overcome poverty in the UK in three ways: we develop projects with people living in poverty to improve their lives and show how things can change; we raise public awareness of poverty to create pressure for change; and we work with policymakers to tackle the causes of poverty. The focus of our work is ensuring that everyone in the UK has a secure income which gives them enough money to live on. We also tackle the discrimination which makes women, ethnic minority groups and others more vulnerable to poverty, and we work on public attitudes to ensure that people experiencing poverty are treated with dignity and respect. For further details about Oxfam’s work in the UK, see www.oxfam.org.uk/uk. 2. Overview We are pleased to take this opportunity to respond to respond to No one written off: reforming welfare to reward responsibility . We welcome the focus of the green paper on ending poverty and social exclusion through overcoming barriers that people face in getting into long-term, sustainable employment. Whilst this focus is positive, there are both gaps and limitations in how far the green paper’s approach is grounded in people’s lived realities, and also weaknesses in the analysis and proposals put forward. We will respond to specific points within the green paper below; in some ways what is not considered in the content of the paper is more important than what is. 3. About Oxfam’s approach to poverty in the UK Successful approaches to tackling and ending poverty must be rooted in people’s lived realities. From our experience all over the world, Oxfam knows that decent waged work and robust social protection are both crucial to build a society free of poverty.  Across our programme, Oxfam uses the Sustainable Livelihoods Approach (SLA) as a tool to frame how it thinks about ending poverty. SLA is used commonly in international development as a means of understanding the assets held and strategies used by people to get by. It helps people living in poverty, practitioners and policymakers understand how to build increasingly strong, resilient and sustainable livelihoods in the context of vulnerability to shocks and unexpected events which people living in poverty are less able to protect themselves from and from which they are slower to recover. It is a people-centred approach that seeks to understand, build on and support the existing strategies that people use and to enable them to overcome the barriers that stop them from realising their potential. It is a fundamentally participatory model, and takes into account how policy decisions and institutional practice differently affect distinct groups of people, such as women compared to men. SLA considers an individual’s or household’s assets in five categories: - financial (e.g. wages, benefits, bank accounts, access to credit) - human (e.g. health, skills, education) - social (e.g. family networks, friends, faith groups) - physical (e.g. ownership or use of a house, car or sewing machine) - public / locational (e.g. libraries, jobcentres, political representation, public transport) 1  These assets are important both independently and in relation to one another. By looking at and analysing assets and their interactions, policymakers can develop a rounded understanding of the lives, strengths and challenges of people living poverty. Traditional approaches to poverty use a narrow deficit model focusing on the material deprivation of those in poverty – in short, treating the major symptom of poverty as its cause. In doing so they limit both the depth of their understanding of poverty and their potential effectiveness in tackling it. Using SLA, on the other hand, policymakers can support people to retain and increase their assets as a whole. SLA enables individuals and communities to be placed on the livelihoods ladder depending on how secure, long-term and effective people’s strategies are for creating and preserving assets. These “rungs” are characterised as surviving, coping, adapting and  accumulating . Together, they form a livelihoods ladder, which people move up and down at different times in their lives. Vulnerability of livelihoods, and by extension to tendency towards risk aversion, are intimately linked to individuals’ or households’ position on the livelihoods ladder. At the lower end, household or individuals who are ‘ surviving’  experience deficits in a 1  This category replaces natural assets, as it is more appropriate to a developed, majority-urban context. 2  range of assets, not just financial, while ‘ coping’  is often achieved due to social or public assets to some extent compensating for a lack of financial assets. The importance of non-financial assets to those who are defined as ‘coping’  within this framework can help policymakers to understand why people might – quite rationally – not be willing to put other assets at risk for the sake of increasing their financial assets. At higher levels, particularly ‘ adapting’ , but also ‘ accumulating ’, risk management remains important as people may not have much to fall back on in the case of emergencies. Part of the role of public policy must be to help to provide structures for people not only to fall back on in emergencies, but to bounce back from after the immediate emergency has passed. In the last five years Oxfam has conducted specific SLA analyses in Teesside, Cardiff, Derbyshire and London. These have been participatory, gendered projects that have sought to understand the ways in which people in these areas build sustainable livelihoods. Following this, we focus on empowering communities to use the analysis to design better policies that tackle the barriers they face, whilst recognising that they are also affected by structural issues which must be tackled at a higher level. We have used the learning from this analysis, as well as from our work with people living in poverty more broadly, to inform our response to this green paper. 4. Comments on the proposals of No-one written off    We are encouraged that the green paper demonstrates a degree of recognition of the complex and multi-faceted nature of poverty that the sustainable livelihoods approach seeks to address. The government’s approach shows some understanding of the importance of building on people’s strengths, overcoming barriers and climbing the livelihoods ladder, particularly in terms of human and financial assets, through its emphasis on individual employment support. It also shows a recognition of the importance of public assets - in the form of employment services - in helping people to achieve a sustainable livelihood through work. The biggest gap in the analysis lies in the proposals’ narrow focus on employment and benefits and the failure to consider livelihoods and poverty more broadly. Our work with poor communities has taught us that people want to build livelihoods which include paid work wherever possible. The experience of people living in poverty has been, however, that public policy and institutions often militate against this due to their unresponsiveness and incomprehension of how people progress or fail to progress up the livelihoods ladder by building on their assets. So whilst we welcome proposals about the potential for government to support people into work, this can only ever be part of the picture. Without analysing the institutional context as a whole, its effects on people’s livelihoods and asset building and its effectiveness in mitigating risk and providing a safety net, no government policy, however well-designed, can hope to end poverty for all working-age people and their children. In particular, considering benefits and welfare to work systems in isolation from the tax and tax credits systems seems inappropriate, given that one of the major incentives of moving from benefits to work is the possibility of increased income through both tax credits and access to a wage. The role of the tax credit system and the National Minimum Wage in tackling in-work poverty and making work an attractive option is not considered in this paper. This is a significant gap in terms of understanding incentives for employment and mitigating the risks attached to taking on work. The proposals seem to adopt a binary approach (not employed vs. employed), with movement from one category to another as its measure of success, failing to recognise that, for many people, there are in reality a number of stages and elements to building a livelihood. For those people at the greatest distance from the labour market and who have multiple barriers to labour market participation, a movement from non-employment to long-term sustained full-time employment is often unrealistic in a single step. Yet this is what the benefit and tax systems expect; it is a major failing of this green paper that it does not seek to break from this failed approach.  A solution to structural barriers to livelihood building through employment must ultimately involve increased flexibility in the benefits system and more streamlined linkages with tax and tax credits system. This can prevent the long time-lags (in benefit payments, wage payments, or tax credit payments) and risks to the predictability of income that prevent people from taking up short-term work – which can be an early step in building up sustainable livelihoods – or which force people into the informal cash-in-hand economy, which limits their ability to build upon such work in the formal economy and exposes them to the risk of exploitation and criminal prosecution. The current inflexibility of the benefits and tax credits system traps people living in poverty, particularly lone parents, in low-paid jobs, and the steep tapering of tax credits and housing benefit make it difficult for them to increase their hours or progress within their jobs, because of the impact of additional earnings on their benefits and tax credit settlements. Low-paid workers need the support of a flexible and responsive tax credits system to enable them to move into and progress in work and need to be 3  confident that they will not get into debt through overpayments of tax credits. The benefit system currently fails to reflect the modern labour market and the gradations that exist between non-employment and full-time long-term employment, closing off pathways to work that might otherwise exist. Redesigning the benefit and tax systems to reflect the reality of modern day livelihoods and labour market is a long-term and substantial task, and this response is not the forum in which to address that in detail. We would recommend, however, that consideration is given to ways in which a substantive revisiting of the benefit and tax systems can take place from this perspective. In the short-term, specific interventions to overcome some of these problems should be considered, including an increased earnings disregard to allow people on benefits to undertake small amounts of work to build up their skills and confidence; decreasing the number of hours that must be worked for tax credits to be claimed; and guaranteeing an easy return to benefits for a specified period (for example, three months) for those returning to work in order to mitigate the risks to income predictability, especially in an era of short-term flexible contracts. Flexibility should also extent to ensuring that the differing needs of different groups are taken into account. For instance, even high- and medium-skilled women need more practical support for a longer period to get into work than men. Jobcentre Plus advisers should acknowledge and seek to solve their difficulties around affordable childcare and their need for local jobs to suit their caring needs that suit their skill level, rather than offering them low-paid low-skilled jobs that mean they are unable to meet transport and caring costs and have no potential for progression. 2  We welcome the positive proposals to help lone parents, such as the commitment to disregard child maintenance payments completely. Understanding the SLA concept of the ‘ vulnerability context’  is also useful in considering policymaking to increase employment and end poverty. Building a livelihood is about recognising and deciding action on the basis of the risks involved, and risk to predictability of income or a strategy which delivers some stability can be a barrier as much as lack of skills or insufficient financial incentive. So, a decision around switching from one type of livelihood strategy, such as one based largely on benefits, to another based largely on paid employment may not rely solely on financial considerations, but may also depend upon the risk level attached to those livelihood strategies. The welfare system should reflect the vulnerability of people’s livelihoods; as discussed the tax and benefit systems as presently constituted do little to mitigate many of the livelihood risks inherent in entering employment from benefits.  Although the proposals do acknowledge the role of human and public assets, in general the proposals also show a lack of understanding of the context in which people try to build their livelihoods. Understanding the interaction of different assets is key: crucially, measures taken to improve financial assets – such as taking a  job – can impact negatively on other assets. An example of this is the impact of taking a job on human assets, where increased stress affects mental health. Another is the interplay between the limited physical asset of access to private transport and the failure of public assets to step into the breach with public transport. No-one written off also shows a limited appreciation of the value of non-work related aspects of livelihoods. For example, the importance of social assets might manifest in people’s caring responsibilities: the value of this is insufficiently recognised in the proposals, and as a result, the opportunity cost of taking work for those with caring responsibilities is not fully appreciated. Women carry the majority of responsibility for caring, both for children and for sick or disabled and older people. This lack of understanding of non-work activity is exemplified by the decision to seek an 80 per cent employment rate without reference to the impact this could have on caring. While this rate has logic when considering pensions and maintaining the current dependency ratio, it appears to be an arbitrary figure as far as measuring ‘full’ or optimum employment is concerned. Looking at decisions through SLA as well as through a more narrow economic lens can help to explain apparently ‘irrational’ decisions taken by people living in poverty about employment, and more importantly can provide an analysis to help policymakers create the conditions in which people are able to further their livelihoods and lift themselves out of poverty.    Another major omission is the failure to highlight gender difference and experience of discrimination as barriers to coming off benefits and getting into work. While particular groups such as lone parents do receive attention, the document fails to identify and acknowledge the multiple ways in which women experience structural discrimination or to put in place gender-specific initiatives to help women of different ages, ethnicities and family structures to overcome the barriers they face. The birth of a child, relationship 2   From getting by to getting on: women's employment and local regeneration programmes , Oxfam/RENEW North West (November 2007) 4
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