ECONOMIC GROWTH

Wrap-around welfare

Mayor Jules Pipe outlines London Councils’ strategy of harnessing the roll-out of Universal Credit to rethink welfare to work programmes in the capital

Last month saw a great deal of political reaction and media coverage of the highs and lows of life on Benefits Street.

For some, the characters portrayed on the Channel 4 documentary are the epitome of work-shy scroungers, while for others they are the victims of social injustice.

Whatever your opinion of the residents of James Turner Street, the one thing that would make a big difference to their lives is a job.

While the Government's welfare reforms appear to be largely supported by the public, it is unclear whether they are leading to more people getting into work.

What we do know, is that the reforms are having a disproportionate effect on Londoners and London boroughs.

Nine out of 10 local authorities most affected by the benefit cap, which limits welfare payments to £26,000-a-year, are in the capital.

So far, 55,000 London households have been hit by the removal of the spare room subsidy, otherwise known as the ‘bedroom tax'.

The vast majority of these people have had their housing benefit reduced by 14%, though for more than 11,500 London households, it has been cut by a quarter.

The challenge remains that, despite the declared aims of the reforms, for many Londoners work still doesn't pay.  The average rent in London is £1,300 per month and nursery care costs are at least 25% higher than in any other part of the country.

It is hard to find a job that will cover these costs, and leave enough to foot energy and food bills.

And there is one reform looming which, though it continues to be plagued by delays and controversy, will have an even bigger impact on individuals and communities – Universal Credit.

Around 850,000 Londoners will qualify for Universal Credit, which combines six benefits into one, once it is finally introduced.

In order to receive it, claimants will have to make and maintain their claim online, manage monthly payments, and sign-up to a formal work agreement.

To guide people through this new system, the Government has pledged to put in place support services.

We at London Councils think the introduction of Universal Credit offers an opportunity to fundamentally rethink the way in which welfare to work operates.

We need to develop a system whereby help is provided to each claimant, their needs are assessed and a programme is designed which enables them to move closer to the labour market and into work.

There would be no divide between support services and employment services.  Instead, the one would be inextricably linked with the other, so that claimants could move seamlessly from welfare to work.

And at the heart of this model of wraparound welfare would be councils, rather than agencies commissioned top-down by central government, working in local partnerships, for the benefit of their residents, businesses and communities.

We know this is a formula that works. Wandsworth and Greenwich (see Case Studies)  are just two examples of localised welfare to work schemes run by London boroughs which provide tailored employment support, but there are many more.

Yet while these schemes are highly effective, they are small-scale and would benefit from the kind of funding currently expended on less successful national programmes.

Local authorities should be allocated the funding and responsibility to drive outcomes and genuinely tailor services to the needs of their communities.

Hence we are calling for the Government to pool the current funding earmarked for national employment programmes into a single pot for employment services in London that can be targeted in line with local need.

The case for pooling is most clear for vulnerable groups who, in many instances, have been failed by centrally delivered employment support for generations.

The Work Programme has continued the tradition of ‘parking' those most at need of help as the results of its lack of success with Employment and Support Allowance claimants shows only too clearly.

Councils will not, and cannot afford, to leave these people behind.

Only by implementing this model of wrap-around welfare can people facing the biggest barriers to work, overcome them and move off ‘Benefits Street' for good.

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