Welfare Reform on the Web (July 2010): Welfare state - UK

Beyond social inclusion: towards a more equal society?

A. France and others (guest editors)

International Journal of Sociology and Social Policy, vol. 30, 2010, p. 109-193

The six articles in this special issue explore the impact of UK social policies under the New Labour government on social inequality. The contributions cover:

• Area-based regeneration policy, where analysis shows that the empowerment of the local population promised in policy rhetoric is not present in reality in schemes recently rolled out in South Wales.
• The 'bottom-up', individualistic approach adopted by New Labour, whereby disadvantage and inequality are viewed as a consequence of individual behaviour.
• The New Labour government's emphasis on raising school standards, which is seen as promoting competition to succeed, where pupils are not all competing on an equal basis. It is argued that the school can exert only a limited influence on educational attainment in the face of social, political and economic factors outside its control which determine outcomes.
• Cross-national studies which explore the relationship between the characteristics of particular nation states' populations and social care services and welfare provision in those countries.

Budget 2010

Treasury

London: TSO, 2010 (House of Commons papers, session 2010/11; HC61)

The emergency budget of the new coalition government set out deep cuts in public spending in order to reduce catastrophic levels of government debt. Reducing the amount paid out in welfare benefits was an explicit aim. Changes include:

• The imposition of a two-year freeze on public sector pay, which will affect teachers, nurses and police officers as well as civil servants.
• A 25% cut in the budgets of all central government departments except for health and international development. Civil servants were warned to brace themselves for £17bn in cuts on top of the £44bn announced by the previous Labour government.
• The introduction of a new cap on housing benefit, so that a maximum of £280.00 per week could be claimed for a one-bedroom home and £400.00 per week for a four-bedroom property. Payouts will also be linked to the lowest 30% of local rents instead of to the average.
• The introduction of a new medical test for all new and existing claimants of Disability Living Allowance from 2013, with the explicit aim of reducing their numbers.
• A three year freeze on Child Benefit
• A radical reform of the system of tax credits introduced by Gordon Brown. In 2010, all families with a joint income of £58,000 could receive varying amounts of child tax credits. In 2011, only those earning up to £41,329 would be able to claim; but from 2012 all with joint incomes above £23,275 would lose their entitlements.
• The linking of future annual benefit rises to the Consumer Prices Index measure of inflation, which does not include housing costs, instead of to the Retail Prices Index.
• Pensioners were, however, protected from the benefit cuts as the Winter Fuel Allowance and free travel entitlements escaped the axe. The link between the state pension and earnings was to be restored from April 2011. The basic state pension would then rise by whichever was highest out of earnings, prices as measured by the Consumer Prices Index, or 2.5%. An attempt was also made to help pensioners and the lowest paid by raising the personal tax allowance by £1,000, so that those with incomes below £6,475 would not be liable for income tax.

Budget will cost 1.3m jobs says Treasury

L. Elliott

The Guardian, June 30th 2010, p.1

Unpublished Treasury estimates obtained by The Guardian show the Government expects up to 600,000 jobs to be lost in the public sector and between 600,000 and 700,000 to go from the private sector by 2015. However, it is assumed that economic growth will create 2.5m new private sector jobs over the same period.

(See also The Times, June 30th 2010, p.8, and Financial Times June 29th 2010, p.3)

Coalition of cuts

P. Johnston

Public Finance, May 21st-27th 2010, p. 12-15

The author argues that the level of government indebtedness will mean huge cuts in public expenditure on services, including social security, health and education. Both the Conservatives and the Liberal Democrats champion devolution of decision making to the local level and community empowerment. However the financial crisis facing the UK will require a radical rethink of the role of government and reform may see the withdrawal of the state from swathes of public service provision.

One in eight state workers could lose their job

A. Porter

Daily Telegraph, June 10th 2010, p. 4

The Chartered Institute of Personnel and Development predicts that 725,000 of Britain's six million public sector jobs could be lost as measures to tackle the black hole in the public finances bite. It estimates that the number of unemployed people will rise to close to three million as a result. It predicts that the deficit reduction measures will stall any recovery in the labour market later in 2010 and slow any return to low unemployment.

Power without representation? The House of Lords and social policy

H. Bochel and A. Defty

Social Policy and Society, vol. 9, 2010, p. 367-377

In the past the role of the House of Lords in the making and scrutiny of social welfare legislation has largely been ignored. However, since the removal of the bulk of the hereditary peers in 1999, the House has become more assertive. This article examines the views of members of the contemporary House of Lords, drawing on a series of face-to-face interviews to examine Peers' attitudes towards a range of social policy issues. If the House of Lords is becoming more assertive, then the extent of agreement within it, and between it and the House of Commons, on key issues may be crucial to governments' ability to successfully deliver their legislative programmes. Moreover, the extent to which Peers' attitudes reflect public opinion may impact on claims that the non-elected upper house is more democratic than an elected house dominated by party.

Reform budget 2010: taking the tough choices

D. Bassett and others

Reform, 2010

In its alternative budget the think tank calls for savage cuts in public spending to reduce levels of public debt. It proposes £20bn of cuts to the NHS by lowering pay, sacking staff and limiting treatments available free. It says that £11.5bn could be saved in education by eliminating teaching assistants, scrapping the school rebuilding programme and raising university tuition fees. A further £13bn could be cut from the welfare budget by increasing the retirement age, abolishing the winter fuel allowance and means-testing Child Benefit, while £18.3bn savings are possible from cuts to police funding and reducing the size of the Civil Service. £4.6bn a year could be raised in taxes by increasing VAT on food and children's clothing.

http://www.reform.co.uk/portals/0/Documents/Reform%20
Budget%202010%20FINAL.pdf

Social mobility myths

P. Saunders

Civitas, 2010

This report claims that Britain is not as bound by class divisions as politicians believe. It cites evidence that, contrary to popular belief, intelligence is more important than background in determining success in life and influencing social mobility. The report concludes that governments are wrong to put so much effort into opening universities to working class students and to increase taxes on the middle classes to provide more benefits for the poor.

Spending review framework

Treasury

London: TSO, 2010 (Cm 7872)

This document sets out a framework for a review of all public spending. It states explicitly that the review will examine areas such as social security, tax credits and public service pensions. Plans for savings and reform in these areas will be unveiled later in 2010.

http://www.hm-treasury.gov.uk/d/spending_review_framework_080610.pdf

State of the nation report: poverty, worklessness and welfare dependency in the UK

HM Government

2010

This report sets out a comprehensive assessment of poverty in the UK at the start of the new Coalition government, establishing a clear overview that will be used to inform policy decisions as the government advances its aims of tackling poverty and improving life chances. It includes a broad range of poverty and deprivation indicators, including income poverty, indebtedness, unemployment, educational and health inequalities, family structure and community breakdown. In spite of spending billions of pounds on state-led programmes, the Labour government failed to make much headway, and poverty and inequality remain deeply entrenched across the UK.