Parliamentary Debate: The Impact of Welfare Reform

Summary

SCVO welcomes the opportunity to contribute to the debate on the impact of welfare reform. On the day that the Poverty in Scotland publication is launched, never has a debate been more timely or appropriate. As press coverage highlighted last weekend ⁱ, the impact of welfare reform and austerity has been harsh:

• 20% of children grew up in poverty in 2011/12;
• Almost every council area contains wards where poverty is a significant issue;
• Up to 100,000 additional children could be pushed into poverty by the end of this decade;
• There is little or no social security safety net for many families.

As we approach the referendum in September, the publication of this report highlights the nature of the challenges facing government in Scotland – now and after the referendum. Poverty is widespread; it is devastating people’s lives and storing up a wealth of problems for the medium to longer term. Work being done by the NHS to begin to baseline and better understand this impact is very welcome.ⁱⁱ The continued parliamentary focus on welfare reform is needed and is welcome but it mustn’t deflect attention from the increasing risk and prevalence of poverty. We need a much wider debate about the extent and causes of poverty in Scotland – described as a “complex and enduring problem..”ⁱⁱⁱ The arguments about Scotland’s future have yet to fully acknowledge the nature of our economy and how growth benefits the few and not the many. The nature of change in the labour market must also to be addressed – changes made worse as a result of the recession. This includes understanding the medium to longer term consequences in terms of health and wellbeing of decreased job security and increasing in work poverty.^iv We call on the Scottish Government to work with the third sector and others:

• In order to better understand how many people are being left with little or no income, and to ensure that no one gets lost “between systems”, regardless of who is responsible for operating them.
• To assess the reach/impact of mitigation activity, and ensure it is having the desired effects.
• To give more detailed consideration of the interaction between devolved services, the impact of welfare reform and austerity.

Unable to Afford the Basics

As we outlined in our briefing on the last welfare reform debate, the picture developing across third sector organisations in Scotland is one where increasing numbers of people are unable to afford the very basics of life. Families are going without food and heat. They are struggling to maintain a roof over their head. This is real poverty and it continues to affect individuals, communities and families with often devastating consequences. The third sector is dealing with this reality day in and day out. There is an urgent need to better understand how and why people are being left with nothing to support their day to day needs; and to collectively find ways to ensure these people are supported – that they don’t fall through gaps in the very systems which are there to protect them. The most basic of safety nets – the Scottish Welfare Fund – must be effective in providing support to people who are often facing the direst of circumstances. See below.

What does the impact look like?

• The expected impact from Universal Credit has yet to materialise – but the impact of benefits sanctions on people with disabilities and health issues is worse than anticipated. See SCVO’s response to the recent DWP sanctions review. Paul Spicker outlines the reality of sanctions and conditionality in the current benefits systems in his submission to the Expert Working Group on Welfare:

“The development of conditionality and sanctions, the declaration that people are ‘fit for work’ and the Work Programme have greatly added to the complexity, administrative cost of the benefits system. They have been characterised by arbitrary decision making, hardship and appeals that now number in the hundreds of thousands. The high success rate of those appeals that are heard seems to show that many decisions are wrong. There is no evidence that such policies have had any positive effect on movement into work, and it has been suggested that some current policies may have had the opposite effect from that intended.” ^v

• Devastating impact of new conditionality on key groups e.g. lone parents. The threat of sanctions, advent of the more strict claimant commitment is leading to behaviour change – people are taking themselves outside the system altogether.
• The wider issue of the complex benefits system is a critical issue leading to poverty and hardship, especially among refugees and people with learning disabilities.
• Feedback from Inclusion Scotland and others show continued delays for PIP applications, with long waiting times for PIP assessments.
• People are getting caught between devolved and reserved policies and services e.g. not being awarded crisis grants from Scottish Welfare Fund if sanctioned and unable to prove exceptional hardship.
• The interaction between welfare reform and devolved policy/services – there is, increasingly, anecdotal evidence that people are making stark choices between keeping crucial support services and heating/eating. Increased charging and tightening eligibility criteria ^vi are having a significant effect on people’s lives. This in turn places additional pressures on informal support networks – at a time when their capacity to respond may be reduced – see, the Carers UK Inquiry into Caring and Family Finances for example. 

The Scottish Welfare Fund and Discretionary Housing Payments

All actions taken by the Scottish Government to mitigate some of the worst impacts of welfare cuts have been welcomed by the third sector. Whilst there is a little “breathing space” being created by the slow-down in UC implementation, now is the time to fully evaluate if this mitigation activity is working in the way it was intended, and to ensure that it is reaching people who are vulnerable. Shelter’s recent briefing on Discretionary Housing Payments is worth considering. SCVO responded to the Scottish Government consultation on the planned legislation for the Scottish Welfare Fund and highlighted third sector concerns about its operation. Anecdotally, feedback from a range of third sector organisations gives us some cause for concern. For example:

• Individuals not getting to the application stage because they are being told, wrongly, that they are not eligible.
•  Lack of choice around goods supplied through Community Care Grants may work against independent living.
• Delay in payment of crisis grants.
• A lack of flexibility in interpreting the Scottish Welfare Fund guidelines.
• People being referred to the Welfare Fund by DWP staff when the chances are they are ineligible for help. People are left to fend for themselves and to travel needlessly between organisations – often without the financial means to do so.
• A developing bureaucracy surrounding the Fund which creates more worry and stress for families.vii People are being caught between health, social care and other services.

Given the Welfare Fund represents the most basic safety net for people in need, it’s vital that we get it right, and seek to treat people with the dignity and respect they deserve, something which is largely missing from the debate about welfare reform and poverty. We await the results of the ongoing evaluation of the Fund with interest.

Conclusion

The impact of welfare reform continues to present a significant challenge to frontline, third sector organisations across Scotland. The nature of that challenge may not be what we had anticipated but the reality of many people’s lives is one which is hard and stark. The high level of demand for support is likely to be an ongoing feature, affecting many different charitable and voluntary organisations- disability, condition specific, faith based, carers and other charities are dealing with many families affected by welfare reform. The third sector stands ready to work with all interested parties, to look at how we continue to mitigate the impact of welfare reform in Scotland – we call on the Scottish Government and local government to work with us to collectively understand and find ways to both identify and help increasing numbers of people who are left nothing to live on, to ensure that no one falls through systems set up to protect and support them. The focus on welfare reform may act to deflect attention from the need for a much wider debate about the extent and causes of poverty in Scotland – described as a “complex and enduring problem…”^viii The arguments about Scotland’s future have yet to fully acknowledge the nature of our economy and how growth benefits the few and not the many. The nature of change in the labour market needs also to be addressed – changes made worse as a result of the recession. Under-employment, increased part time working and “churning” between low paid, insecure work and the benefits systems will have medium to longer term consequences in terms of health and wellbeing.ix Our economy, our labour market and how they operate for the good of all are crucial factors in tackling poverty in Scotland. If we continue as we are – regardless of September’s results – more people will find themselves struggling with low pay, and higher living costs. As highlighted by the Joseph Rowntree Foundation, work isn’t helping people out of poverty.^x In addition, we must question the effectiveness of support for those who are out of work e.g. because of ill health, caring roles etc. ^xi Lack of access to social care ^xii, to affordable childcare, to tailored help to find work ^xiii are all challenges which Scotland will need to address. Policy announcements around childcare are welcome but may not be enough in their own right. Access to childcare which meets non-traditional working patterns and for disabled children must be considered. The role that the third sector could play in this context is substantial. We urgently need to better understand and assess the interaction between devolved services and the impact of welfare reform. A focus on the impact of welfare reform is necessary, but it mustn’t divert us from wider social and structural challenges – Christie’s assessment of these is still valid.^xiv That this wider debate is needed is perhaps indicated by the substantial interest in the Poverty campaign, Scotland’s Outlook, launched last week. To date, the film embedded on the site has had over 60,000 views and has been shared widely across civil society.

References

i http://www.heraldscotland.com/news/home-news/uk-austerity-measures-will-push-100000-more-scottish-children-into-poverty-by-2020-ac.23620814   ii http://www.scotpho.org.uk/publications/reports-and-papers/1109-making-a-bad-situation-worse iii Mooney and Johnstone – Scotland divided ; poverty inequality and the Scottish Parliament (Critical Social Policy 2000:20 (2), 155-182 iv For example: The rise of in-work poverty and the changing nature of poverty and work in Scotland: what are the implications for population health? Harkins, Egan, GCPH (2103) v http://www.scotland.gov.uk/Resource/0044/00441897.pdf vi http://ldascotland.org/index.php/stop-the-care-tax/108-20-000-lose-out-because-of-tightening-eligibility-criteria vii http://www.scvo.scot/long-form-posts/consultation-on-draft-welfare-funds-scotland-bill/ viii Mooney and Johnstone – Scotland divided ; poverty inequality and the Scottish Parliament (Critical Social Policy 2000:20 (2), 155-182 ix For example: The rise of in-work poverty and the changing nature of poverty and work in Scotland: what are the implications for population health? Harkins, Egan, GCPH (2103) x http://www.jrf.org.uk/topic/monitoring_poverty xi http://www.jrf.org.uk/publications/referendum-briefing-child-poverty-scotland xii http://www.heraldscotland.com/news/home-news/thousands-left-without-social-care-due-to-cuts.23652347 xiii http://www.scvo.scot/news-campaigns-and-policy/briefings-consultation-responses/independent-review-of-jobseekers-allowance-sanctions/ xiv http://www.scotland.gov.uk/Publications/2011/06/27154527/2