Welfare Reform Bill

Memorandum submitted by Oasis Charities Parliament (WR 64)

1. The Rt Hon Iain Duncan Smith spoke at the Charities Parliament event on the 23rd March 2011 entitled "A Welfare System for the 21st Century? " . This brief document is a response to the evening and an opportunity to feed into the Welfare Reform Bill consultation.

2. We would like to submit these collected suggestions, questions and warnings to the Secretary of State from community activists, church and charity leaders.

3. Charities Parliament is a Faithworks initiative located at the Oasis Centre that encourages debate and inspires innovation. Its aims are:

3.1. To give voice to faith based organisations, the third sector and community activists

3.2. To encourage and inspire political engagement

3.3. To engage government with creative and innovative input from the grassroots

Firstly we would like to affirm what is good about the new welfare reforms:

4. We acknowledge that the complex list of benefits, and tax credits has been overwhelming and overbearing, causing excessive adminstration costs to the system and complexity for those seeking to claim benefits. The universal credit system is, in principle, commendable.

5. We recognise the importance in tackling the fact that there are still too many people out of work. We also believe that work should pay more than a life of benefits, and are behind the approach to incentivising people to get back to work.

6. We commend the Rt Hon Iain Duncan Smith for his support for the voluntary and community sector, who recognised on his evening with us that the sector should not be seen as ‘easy targets for cuts’, instead we should be ‘invested in’.

7. However, as much as we agree with the broad paramenters of the reforms we take issue and offer warning in some general and specific ways outlined below:

A response to the welfare reform narrative

8. There is an implicit suggestion in the White Paper Universal Credit: welfare that works that people who are ‘out of work’ are lazy, have no understanding of the importance of work and would rather cheat the system than do an honest days work. Whilst we recognise that some do have this attitude and abuse the system, we would like to affirm our faith in the British public that laziness, and fraud is a problem for the minority not the majority.

9. The problem is:

9.1. Building a whole policy edifice around the minority of cases, when actually the overwhelming majority of people on low incomes want to work.

9.2. The minority that do engage in this activity is symptomatic of this issue and not the cause.

9.3. The fact that many people want to get back to work needs to be reflected in the support that people will be given in order to help them back into work.

9.4. Although incentives are a positive addition for those seeking to earn more in than out of work we run the risk of slipping from a compassionate society to a purely contractual society. Tom Sefton from Church Urban Fund (CUF) noted that we "run the danger of treating people not as people but as commodities" .

9.5. The reforms reflect an analysis that places the blame for worklessness solely on individuals’ characteristics and choices. It is an approach that assumes that worklessness is a product of an individual’s failings; which seeks to direct people towards any work, irrespective of the quality of outcomes; and deploys restrictions on access to benefits and sanctions in order to achieve aims. In fact worklessness is a product of both individual and societal failings.


10. We respect the desire of the DWP to ensure that the most vulnerable in our society continue to be protected and supported by the welfare state. For these reasons the following comments were made at the Charities Parliament in reference to people with disabilities:

10.1. How we assess people’s ability to work is going to be really important, some people’s disabilities aren’t as obvious as others’: what about those with mental health problems where depression, low confidence, and psychological barriers exist but are potentially not as overt as a physical disability? How is the DWP going to ensure that the assessment is as fair as it can be and does not damage further those who are already suffering?

10.2. People who have to stop working for a prolonged period because of an accident or serious illness (such as a stroke or a diagnosis of cancer), often experience financial difficulties at the same point as they are trying to come to terms with what has happened to them. This is because they face a sudden, unexpected and often dramatic loss in income at a time when their costs for expenses such as heating and transport rise. We are therefore extremely concerned that there are three separate measures in the Welfare Reform Bill that will substantially reduce the amount of financial support available to people in this situation.

10.3. In the current system, for the first six months of illness people can claim working tax credit. The amount of help available through Universal Credit looks likely to be less for many people, especially home owners.

10.4. The new disability benefit, PIP, will have a qualifying time of 6 months before it is payable – for DLA it is 3 months. This will have a devastating effect on the income of this group. For those with very significant care needs it could mean managing for another 3 months on about £90 per week after housing costs instead of about £240 per week.

10.5. After a year of illness, if someone has a partner who works then they could lose all their ESA.

10.6. Surveys by Citizens Advice have consistently found that " illness is a significant cause of debt in around a quarter of the clients we advise at present about debt problems. With these changes we are likely to see a large increase in the numbers suddenly becoming seriously ill or disabled who find themselves in financial difficulties. We are extremely concerned about seeing people put under such stress at a time when they are often facing a traumatic life change".


11. Housing Benefit is a significant aspect of the social system that brings benefits beyond simply putting a roof over someone’s head. It enables people to live and be employed in the same geographical area when they may not be able to find employment in cheaper housing areas, and it encourages social mobility and it equips people to live healthy, socially active lives.

12. Some aspects of the housing Welfare Reform Bill are to be encouraged due to the need for efficiency in the housing system, but this efficiency should not be placed above quality of life. Changes to the system should ensure they do not:

12.1. Exclude lower earners from certain areas due to rent costs. A significant outcome of housing benefit is increasing social diversity and it should not stigmatise the poor. A housing benefit system needs to increase the chances of social mobility, enabling individuals to better themselves with the help of their community and the support networks that are so often crucial for people to not only gain employment, but also to make a meaningful contribution to society.

12.2. Encourage break up of families. Alison Gelder from Housing Justice would like to express concern at "raising the age for the shared room rate from 25 to 35, as it could potentially cause young men to have less access to their children. This can lead to a breakdown in family relationships." We would urge the DWP to reconsider this age jump.

12.3. Leave rent arrears to be paid out of welfare intended for children or the disabled. Rev Paul Nicolson, Chairman of Zacchaeus 2000 Trust fears the new Universal Credit will contain an amount for housing, which in many cases will not pay all the rent due to the caps. " Leaving rent arrears to be paid out of welfare intended for children or the disabled, or out of what Ministers at the Department of Work and Pensions euphemistically call "the building block" at £67.50 a week, which is 50% of the national poverty threshold and half the Joseph Rowntree minimum income standard. "

The voluntary sector

13. We would like to commend the Secretary of State for recognising the important role that the community and voluntary sector play in supporting people back into work through the new Work Programme. We agree that the voluntary and community sector should not be seen as easy targets for cuts to local councils. We would like to keep the Secretary of State accountable to his promise that with regards to the welfare to work and apprenticeship schemes that voluntary sector should not be squeezed out by a big state and big business. However there were a number of concerns that were expressed by representatives on the evening about the role of the voluntary sector and its relationship to prime contractors.

13.1. Amanda McIntyre from the Stefanou Foundation commented that she appreciated the Secretary of State wants to "get to the root cause of problems". It was suggested that this same approach be taken to the problems that may arise with the Work Programme. It should be ensured that voluntary organisations can provide honest feedback about the expectations from contractors. Risks should not be passed down from a contractor to a community organisation. The Secretary of State said that this would not be tolerated and we would like to ensure that a process is put in place not just before the contracts, but during the period of delivery so that honest conversations can be had between the prime, the community organisation and the DWP.

13.2. Ben Stansfield from Pecan wanted to point out the danger that " Primes operate on different priorities to the voluntary and community sector ". How can we make sure that the learning and skills from local voluntary and community organisations are passed up to the primes? In this way the contract is not just transactional but based around partnership and a desire to learn from one another.

13.3. John Sauce from the Christian Agencies Network in Eastbourne expressed a concern that " the very small organisations will continue to get left out of the commissioning process in spite of the good work that they do, as they do not have the capacity to fill in the complex forms that contractors/government expect to be filled out". We would like to urge the Government to simplify the process for smaller organisations. NESTA have modelled this well, getting rid of unnecessary jargon.

13.4. Tom Sefton from CUF noted that "a recent survey of 2000 small organisations discovered that smaller organisations are not convinced that they will thrive under the back to Work Programme and other government initiatives."

14. We call upon the Rt Hon Iain Duncan Smith and the DWP to take these concerns into consideration before the final Bill is passed.

May 2011