Our party has hard truths to face on welfare. The public rejected us at the last election for a host of reasons. One that stands out more than any other is that ‘we simply didn’t get it any more’. We were perceived as the party that no longer understood the hopes and aspirations of the British people; the party that stood for a fairer and more equal society, but failed to deliver an acceptable welfare settlement. Blue Labour theorists hold that Labour lost any notion to fairness, with it coming to mean the very opposite of what it was meant to. And in recent weeks James Purnell and Liam Byrne have argued for a more reciprocal and contributory welfare system, with those who ‘have paid in more, getting more’.
The importance of responsibility cannot be underestimated. But a welfare settlement affording stronger entitlements and higher contributions to those who have paid in more, is not sufficient in recapturing the public’s faith. We need to go further than simply changing the laws of redistribution. Our welfare vision must also be empowering and liberating. When people are down on their luck and out of work, they need a support system not just helping them back into work, but one allowing them to take charge and determine their own futures. In short, we need a wholesale revolution of personalisation in our welfare system.
What will this entail? It will mean, where possible, changing the default assumption of provider led employment support to citizen-led provision. People on contributory benefits; for instance, those with higher earnings or a record of paying taxes, should be given more control and freedom over their benefits. Where it is appropriate, they should be able to claim advance payments. If it will help them secure work earlier, for instance by moving to different areas or undertaking specialist training, there seems no justifiable reason for denying people freedom to shape payments around their lives. Obviously, there will have to be checks in place to ensure forward payments are not excessive and are appropriate to the purposes. It is important to note this is not about claimants receiving more; just what they can legitimately claim, more flexibly.
With the labour market becoming more skilled and competitive, graduates are finding it harder than ever to secure work. It seems bizarre that we are encouraging more youngsters to enter into higher education, while doing little for them upon graduation. The Tory-led government have scrapped the Future Jobs Fund and the graduate national internship scheme; these have collectively helped over 100,000 young people secure vital professional and working experience – and in many cases – a job! It is immoral that anyone should be denied the opportunity to work for no reason other than their means or plight. This is particularly the case with young people, as a period of unemployment during one’s formative years brings a catalogue of social and economic distresses later in life. That is why any attempt at reviving the contractual principle in welfare, will require a jobs guarantee with teeth for young people. A credit paid at the minimum wage allowing all 18-24-year-olds the opportunity to undertake a self-directed internship for three months would be an ideal start. And for those from particularly disadvantaged backgrounds, that guarantee should be for six months.
Key to any efforts in winning back public trust will be a welfare-to-work system that actually works and gets people off benefits and into gainful employment. Contrary to popular myth, most people who find themselves languishing on benefits suffer from a litany of complex physical and mental issues. The government’s Work Programme is tasked with helping the long term unemployed back to work. It builds on Labour’s Flexible New Deal: calling upon the expertise and specialism of the third sector. Whether the programme is a success or not (and there are doubts due to its tight financial model and minimal third sector involvement – 19 per cent market share of contracts) the case for more personalised employment support has never been stronger. Personal welfare budgets, with the appropriate guidance, can empower claimants to take responsibility and tailor support around their own needs. Strong citizens are active citizens.
Putting users in control of their own budgets will not only tailor support around those who understand and acknowledge their condition better than anyone else, but will improve personal levels of motivation and engagement. This ties in well with place-based budgeting, where local authorities pool resources behind shared objectives. The government’s community budget pilots, which focus on complex families, should trial these budgets. The Inclusion thinktank has found the adoption of personal budgets for those on employment and support allowance can be more effective and cost-efficient.
Nurturing social capital within communities is crucial to any future welfare settlement. Those who find themselves unemployed for extended periods of time but have ambitions to get on and start a business, should be able to look towards the state for support. Micro-welfare, a policy that offers entrepreneurial guidance and start-up capital for claimants looking to kickstart a business, should become part of the welfare offer. Unlike the governments New Enterprise Allowance, there will be more generous grants and greater involvement from communities.
A key feature of micro-welfare is its collective dimension. They can only be group-based ventures, which include the unemployed and those in work. Creating incentives and avenues for social collaboration will help regeneration in disadvantaged areas and engineer greater wells of social capital in communities. This will secure stronger outcomes in welfare to work. And with its inclusive dimensions, sustain widespread public support for the welfare bargain. The Blue Labour School are right to call for a reinvigorated sense of responsibility and conditionality in welfare. But this must be matched by an equal emphasis on power, autonomy and personalisation. And unless we do, our aspirations for welfare will be perceived as reactionary and uninspiring. That is a fate we must avoid.