“We will make sure it pays more to be in work than it does to sit on benefits. And because of that, we can say that if there’s work you can do, we expect you to do it – or no more benefits.
Work that pays. Benefits with conditions.”
(Iain Duncan Smith, 2011)
Welfare is an important area of policy as it ensures the provision of welfare services and financial aid to citizens who are in need, and is one area of policy where the political parties are often most ideologically split. The Conservatives are generally less in favour of welfare payments than those on the Left, and instead promote welfare as being an individual’s responsibility. Due to the large amount of public finance welfare takes up, it is not difficult to understand why, in periods of austerity, welfare is a prime target for spending reductions. This chapter will discuss the Conservatives’ approach to welfare policy, with reference to the Coalition’s planned reforms of the benefit system and the implementation of the Universal Credit. Further discussion of welfare policy will focus on the Work Programme and will explore the programme’s role in creating the Big Society. An analysis of the reforms will then allow for a conclusion to be made regarding the extent to which these policies represent a fundamental shift or otherwise in the Conservative approach to social policy.
Continuing with the detoxification of the Conservatives from the ‘nasty’ ‘neoliberal’ party (Page, 2011) to a compassionate party, the Conservatives’ manifesto, Invitation to join the Government of Britain (2010), pledged to combat inequality and poverty by ‘Getting Britain working again’. The Conservative Party committed itself to reducing youth unemployment and the number of children in workless households. Based on Iain Duncan Smith’s Breakdown Britain and Breakthrough Britain reports, by Iain Duncan Smith, the Conservatives viewed higher employment and reduced welfare dependency as the best ways to reduce inequalities and tackle poverty. These aims would be achieved by reforming the welfare system and creating the Work Programme (Conservatives, 2010a). Set out in the White Paper, 21st Century Welfare (DWP, 2010), both policies were publicly promoted as a means to ‘make work pay’ and culminated in the Welfare Reform Act 2012 and the present Work Programme, which has been in operation since 2011 (DWP, 2011).
The case for welfare reform was anchored in a criticism of the existing benefit system, which was seen as inefficient, over-complicated and unfair to those who work (DWP, 2010). Reform aimed instead to create a simpler system in which people were able to keep more of their earnings in order to make the transition into work easier whilst also making clear the advantages of employment (DWP, 2010). The existing system was also criticised for failing to recognise that poverty is not solely about a lack of money but includes a range of factors such as educational and health inequalities (Pickles, 2010). Focusing on increasing income, therefore, was not considered to be an adequate approach to alleviating social problems. Studies show, for example, that the source of income is often a better indicator of poverty and social exclusion than the amount of income as being in employment offers better opportunities to improve one’s wellbeing (Pickles, 2010).
The proposals set out in the White Paper aim to simplify the benefit system by introducing a single Universal Credit, which would integrate a range of existing benefits. It would also incentivise employment by ensuring that all work is financially rewarding. This latter (but by no means lesser) aim to ‘make work pay’ is further reinforced by the introduction of a benefits cap to prevent those on benefits from receiving more income than those who work as well as the reduction in the real values of some benefits such as Housing Benefit and Jobseeker’s Allowance (Deacon & Patrick, 2011). Such proposals are widely considered to be some of the most radical and ambitious than anything previously attempted, marking a shift away from a rights-based and demand-led safety net for those in need towards a ‘something for something’ provision for the deserving poor (Lee, 2011).
The reforms are also based on the assumption that ‘excessively generous [welfare] payments…damage work incentives’ (Deacon & Patrick, 2011) as it is thought that high levels of unemployment benefits create poverty traps and significantly reduce participation in the labour market. There exists, however, persuasive and contradictory evidence that associates high levels of unemployment benefits with higher, rather than lower, employment rates. Newman, for example, goes some way to undermining the Government’s assumption by contrasting the UK with Denmark to demonstrate that high levels of unemployment benefits do not necessarily deter people from work (2011). This evidence suggests that rather than taking a compassionate approach towards alleviating poverty, the Government is attempting to make individuals responsible and accountable for their own plight and appear to be ignorant or dismissive of wider societal factors.
The Work Programme initiated by the Conservatives is based on the Freud Report 2007 (Deacon & Patrick, 2011) which was commissioned by the then Labour Government to review the welfare-to-work programme. Freud suggested that after being supported by Jobcentre Plus for a period of time, further support for individuals to get back in to work should be contracted out to private and voluntary organisations as they could offer varied and more innovative programmes of support (Freud, 2007). Upon forming the Coalition, the welfare-to-work programmes of the Labour government were all scrapped and replaced with the Work Programme which combines ‘long-term incentives with freedom for service providers to innovate’ (DWP, 2011). It is a universal programme available to anyone that is of working age and in receipt of income replacement benefits, and an estimated 3.3 million people are expected to pass through the programme over the next 5 years (NAO, online). Participation in the Work Programme is mandatory for certain groups after being unemployed for a certain period of time. Those who fail to participate when required to do so will face tough sanctions, such as the withdrawal of their benefit for up to three years (DWP, 2010). A four week optional Work Activity will also be available for individuals that are felt would benefit from a work experience placement, however once an individual agrees to take part the four weeks become compulsory and individuals that fail to participate face the withdrawal of their benefit (Deacon & Patrick, 2011). This sends out a clear message that employment is not a choice but a responsibility and an obligation, both of which can be linked back to traditional conservative principles, albeit in a somewhat different form as this time it focuses more on the obligations and responsibilities of the poor rather than the privileged.
As previously mentioned, the Work Programme is to be delivered by a range of providers and was presented as part of the Big Society agenda. In principle, there are therefore potential opportunities for voluntary organisations to deliver services as part of the promised flourishing of civic society. Cabinet Office Minister Francis Maude even stated that 35-40% of the contracts would go to civil society organisations (Butler, 2011a). In reality, however, only 2 of the 18 prime contracts were awarded to voluntary organisations (NAO, online). This begs the question as to exactly how effective the Big Society agenda is likely to be in fostering a rich civic society or whether it is simply a cloak for privatisation after all.
It is possible, of course, that Work Programme contracts were more often won by the private sector because third sector organisations simply do not have the resources to provide such services due to the economic crisis and subsequent austerity measures. The position of such organisations is not helped, therefore, by the fact that Work Programme contractors are paid by results rather than up-front as in the previous welfare-to-work scheme (DWP, 2011) as their comparative lack of resources may make it difficult to compete with private companies.
Based on the evidence, it can be argued that the Government initially intended to contract out the Work Programme to the private sector and used the Big Society as a slogan to gain public support, and the economic crisis now appears to be being used to legitimise the continuation of neo-liberal conservatism. This, however, seems a rather crude view of the government’s intentions and perhaps more contracts went to private companies simply because they are proven more effective and efficient. Since 2008, private sectors have been delivering a large proportion of welfare-to-work programmes and are considered to be more flexible and innovative with their services than other providers (Newman, 2011). Research by the National Audit Office, however, counters the claims by Ministers that the private sector delivers better results and has shown that the Jobcentre Plus actually performed better than private providers of some of the welfare-to-work programmes (Newman, 2011). The key to delivering high results, it is argued, is not in the type of provider, but rather in the ‘quality, enthusiasm, motivation and commitment of the staff providing the service’ (Hasluck & Green, 2007). This suggests that rewarding private companies with contracts was driven by an ideological commitment to further the privatisation of public services in line with neo-liberal principles, rather than about securing the best possible services available.
Although it is primarily the private companies that have been awarded Work Programme contracts, there is still scope for third sector organisations to be involved with the provision of services. Indeed, a number of the private providers have sought out the services of some voluntary organisations and have formally subcontracted to them (Butler, 2011b). This has the full support of the DWP which encourages the providers to create relationships with local organisations and community groups, and suggests that there is an attempt to create a compassionate approach to policy. It appears, however, that not all private providers are establishing formal contracts with voluntary agencies, and instead are using them as a way to drive down their own costs by informally referring individuals to volunteer centres (Butler, 2011b). Some reports even go as far to suggest that private contractors are abusing the good intentions of voluntary organisations and knowingly taking advantage of their valuable services, regarding them as just a free service rather than recognising the importance of voluntary work to both individuals and communities (Butler, 2011b). The Voluntary Sector North West stated that rather than the creation of a Big Society, the Work Programme represented the ‘worst kind of Big Government …[and] worked at the expense of local delivery, local capacity and local partnership-based working (Bulter, 2011a). The Work Programme, therefore, does not appear to offer choice and empowerment to communities whilst facilitating the growth of civic society but instead seems to provide private companies with opportunities to profiteer from public services.
Whilst this is reminiscent of neo-liberal conservatism, it is difficult to fairly assess whether there has been a fundamental shift in Conservative welfare policy as welfare-to-work programmes can be better compared with those of the previous Labour governments rather than Conservative ones. Neither Thatcher nor Major embarked upon any fundamental welfare reforms despite the claims to ‘roll back’ the state. Nevertheless, their influence can be detected within the rhetoric of current welfare reforms under the banner of compassionate conservatism.
As discussed throughout this chapter, Iain Duncan Smith put forward reforms that he claims to represent his part in creating the Big Society, and were aimed at fixing ‘Broken Britain’ by eradicating poverty and inequalities. The Work Programme as discussed has offered in principle an opportunity for third sector agencies to provide locally based welfare-to-work and employment services. As the analysis shows, however, this has failed to materialise in practice and has instead served to support the growth of the private sector as the state is shrunk. In emphasising individual responsibility for employment status whilst the economy struggles to recover from recession, the Government appears to have ignored or dismissed societal factors behind rising unemployment and the subsequent reliance of many upon welfare whilst failing to acknowledge that unemployment is not a lifestyle choice for the majority of people (Newman, 2011).
The reforms also appear to contradict the Big Society agenda as, by stigmatising the unemployed in its attempts to promote work, it further excludes those that cannot participate in the labour market and neglects the various other contributions people make to society, such as through the informal labour market and activities such as volunteering. Although these reforms may have become victims of the economic crisis, there is substantial evidence which suggests that rather than a fundamental shift in the conservative approach to social policy there is a continuation of more neo-liberal principles.