Introduction

Ever since the report of Sir William Beveridge ‘The Social Insurance and Allied Services’ report was published at the end of 1942 has been seen as the cornerstone of the Welfare State as it indentified that national insurance contributions would insure that the state would provided social security so that the population would be protected from the ‘cradle to the grave’. This was the ideological aim by Beveridge to improve productivity our standing in the global market at a time when the world had be financially damaged by the conflict that occurred during World War 2.

This report was the basis of welfare support by the state and the end of the ‘poor law’

This essay will be looking at the Welfare Reform act introduced by the coalition government and the implied changes of the reform in which the transition of the population being protected by the state from ‘cradle to grave’ towards a change the under the statement on the DWP website to make the benefits and tax credit systems fairer and simpler by:

Creating the right incentives to get more people into work

Protecting the most vulnerable in our society

Delivering fairness to those claiming benefit and to the taxpayer.

This essay will examine as to whether or not these changes to the welfare act has signalled a change in the direction for anti-poverty policies or whether these changes have already been coming and if the reform has highlighted and presented a change of direction in anti poverty polices in a more public light.

It can be said that the impact of the global credit crunch and subsequent recession has played a contributory part in the changes that are taking place and has possibly garnered more public support in light of the squeeze that the recession has caused on the purses of working households.

Seventy years ago, with Britain locked in battle against the armies of Nazi Germany, one of the most brilliant public servants of his generation was hard at work on a report that would change our national life for ever.

Invited by Churchill’s government to consider the issue of welfare once victory was won, Sir William Beveridge set out to slay the ‘five giants’ of Want, Disease, Ignorance, Squalor and Idleness.

When his report was published at the end of 1942, it became the cornerstone of a welfare state that supported its citizens from cradle to grave, banishing the poverty and starvation of the Depression, and laying the foundations for the great post-war boom.

For years the welfare state was one of the glories of Britain’s democratic landscape, a monument to the generosity and decency of human nature, offering a hand up to those unlucky enough to be born at the bottom.

Nine characteristics of Policy Making

FORWARD LOOKING

The policy-making process clearly defines outcomes that the policy is designed to achieve and, where appropriate, takes a long-term view based on statistical trends and informed predictions of social, political, economic and cultural trends, for at least five years into the future of the likely effect and impact of the policy. The following points demonstrate a forward looking approach:

• A statement of intended outcomes is prepared at an early stage

• Contingency or scenario planning

• Taking into account the Government’s long term strategy

• Use of DTI’s Foresight programme and/or other forecasting work

OUTWARD LOOKING

The policy-making process takes account of influencing factors in the national, European and international situation; draws on experience in other countries; considers how policy will be communicated with the public. The following points demonstrate an outward looking approach:

• Makes use of OECD, EU mechanisms etc

• Looks at how other countries dealt with the issue

• Recognises regional variation within England

• Communications/presentation strategy prepared and implemented

INNOVATIVE, FLEXIBLE AND CREATIVE

The policy-making process is flexible and innovative, questioning established ways of dealing with things, encouraging new and creative ideas; and where appropriate, making established ways work better. Wherever possible, the process is open to comments and suggestions of others. Risks are identified and actively managed. The following points demonstrate an innovative, flexible and creative approach:

• Uses alternatives to the usual ways of working (brainstorming sessions etc)

• Defines success in terms of outcomes already identified

• Consciously assesses and manages risk

• Takes steps to create management structures which promote new ideas and effective team working

• Brings in people from outside into policy team

EVIDENCE-BASED

The advice and decisions of policy makers are based upon the best available evidence from a wide range of sources; all key stakeholders are involved at an early stage and throughout the policy’s development. All relevant evidence, including that from specialists, is available in an accessible and meaningful form to policy makers. Key points of an evidence based approach to policy-making include:

• Reviews existing research

• Commissions new research

• Consults relevant experts and/or used internal and external consultants

• Considers a range of properly costed and appraised options

INCLUSIVE

The policy-making process takes account of the impact on and/or meets the needs of all people directly or indirectly affected by the policy; and involves key stakeholders directly. An inclusive approach may include the following aspects:

• Consults those responsible for service delivery/implementation

• Consults those at the receiving end or otherwise affected by the policy

• Carries out an impact assessment

• Seeks feedback on policy from recipients and front line deliverers

JOINED UP

The process takes a holistic view; looking beyond institutional boundaries to the government’s strategic objectives and seeks to establish the ethical, moral and legal base for policy. There is consideration of the appropriate management and organisational structures needed to deliver cross-cutting objectives. The following points demonstrate a joined-up approach to policy-making:

• Cross cutting objectives clearly defined at the outset

• Joint working arrangements with other departments clearly defined and well understood

• Barriers to effective joined up clearly identified with a strategy to overcome them

• Implementation considered part of the policy making process

REVIEW

Existing/established policy is constantly reviewed to ensure it is really dealing with problems it was designed to solve, taking account of associated effects elsewhere. Aspects of a reviewing approach to policy-making include:

• Ongoing review programme in place with a range of meaningful performance measures

• Mechanisms to allow service deliverers /customers to provide feedback direct to policy makers set up

• Redundant or failing policies scrapped

EVALUATION

Systematic evaluation of the effectiveness of policy is built into the policy making process. Approaches to policy making that demonstrate a commitment to evaluation include:

• Clearly defined purpose for the evaluation set at outset

• Success criteria defined

• Means of evaluation built into the policy making process from the outset

• Use of pilots to influence final outcomes

LEARNS LESSONS

Learns from experience of what works and what does not. A learning approach to policy development includes the following aspects:

• Information on lessons learned and good practice disseminated

• Account available of what was done by policy-makers as a result of lessons learned

• Clear distinction drawn between failure of the policy to impact on the problem it was intended to resolve and managerial/operational failures of implementation.

Conservative – Thatcher Era

It can be said that characteristics of the Labour and Conservative party remain constant, wherein there is a greater focus for Conservative government to reduce State dependency and a culture in the view of Thatcherism ‘I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government’s job to cope with it!” or “I have a problem, I will go and get a grant to cope with it!” “I am homeless, the Government must house me!” and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first. It is our duty to look after ourselves and then also to help look after our neighbour and life is a reciprocal business and people have got the entitlements too much in mind without the obligations.’ (^ “Interview for Woman’s Own (“no such thing as society”) with journalist Douglas Keay”. Margaret Thatcher Foundation. 23 September 1987. Retrieved 10 April 2007.)

This ideology is represented with policy changes such as the introduction of poll tax in which everyone was expected to contribute the same amount of tax regardless of income or wealth and is seen as a poverty creating policy. It could be said that the era of Tory power between 1979 and 1997 was a period when actions were being implemented to deal with the ‘crisis’ of welfare within the UK. It had been suggested that between 1951 and 1979, levels of controversy over anti-poverty policies were, arguably, not particularly high. Conservative ideologists however had much to say about the case for bringing market conditions more effectively to bear on distribution of social services, but only in the housing field had Conservative governments taken steps that represented major responses to this viewpoint. Labour disappointed many of its supporters, who closely identified the party with the advancement of the Welfare State. A succession of economic crises limited the money available for new anti-poverty polices. Yet both parties, even before the Thatcher government came into power had considerably advanced public expenditure particularly on social policies, to the point where some economists argued that this kind of expenditure had become inflationary force, limiting the scope for new wealth creating private investment. This is a view politicians began to take seriously by the 1970s, with the most staggering growth in seen in public employment and social security transfer payments.

Although it is tempting to attribute the change in climate for social policy in the UK to the Conservative led government of 1979, the changes had been gradually emerging before that date, and those changes were rooted as much in economics as in ideology. Keynesian economic management techniques involving manipulation of levels of government expenditure and taxation were employed to try to retain full employment without inflation. This however was not possible with monetarists’ school of thought being that the government must control the money supply and let economic forces bring the system under control (Friedman, 1962, 1977). The government at the time when Thatcher took office were undoubtedly hostile to state social policy. This hostility was rooted in a commitment to privatization, the curbing of public services and attacking trade unions. The government was untroubled by the evidence that such an approach was generating increased poverty. Despite the aims to control social policy expenditure, it nevertheless grew as a whole, with spending on the National Health Services and Welfare continually increasing. See Glennerster and Hills (1998) for a detailed analysis of those trends.

It was during that era that they changed supplementary benefit which was a means-tested benefit in the United Kingdom, paid to people on low incomes, whether or not they were classed as unemployed such as pensioners, the sick and single-parents. Introduced in November 1966, it replaced the earlier system of discretionary National Assistance payments and was intended to ‘top-up’ other benefits, hence its name. It was paid weekly by the DHSS, through giro cheques and order books, or fortnightly by the Unemployment Benefit Office by giro and cashed at local post offices. This was subsequently abolished and replaced by income support and housing benefit by the Thatcher government and also signalled the change for the provision of sickness absence for the first 28 weeks from National Insurance to a Statutory Sick Pay scheme run by employers.

The 1986 Social Security Act extended the scope for contracting out from the SERP (State Earnings Related Pension Scheme) which is now the basic state pension allowing the growth of private pension plans. The family income supplement was replaced by family credit which went onto evolve into tax credits under the New Labour government. Under the Thatcher government was a total restructure of the benefits system, which included, along the ones mentioned previously that change of unemployment benefit to job seekers allowance to emphasise the behaviour required and make allowance tested means after the first six months.

Other changes made by the government at that time included the transformation of the invalidity benefit to incapacity benefit, aiming to force all but severely handicapped, below pension age, to become job seekers. One of the most complex pieces of legislation was the state support for single parent families, which was designed to secure increased contributions from ‘absent’ parents (normally fathers) through the Child Support Act of 1991.

Labour

The Blair government when it came to Welfare declared themselves as the government for Welfare Reform with a commitment to a stable public expenditure programme, but the tendency of social security costs to rise regardless of policy change which is a problem also faced by the Thatcher government, which in turn limited New labour’s room to manoeuvre. Labour saw the solution to this dilemma by increasing employment; the stimulation of labour-market participation by single parents and the disabled as well as the unemployed is central to their social security policy strategy This is seen trough the introduction of working tax credit and their ‘welfare to work’ programmes for young people under 25.

The most significant aim of New Labour was to eradicate child poverty and this was done with schemes such as child tax credit, but possibly the biggest change introduced to tackle poverty was the National Minimum wage, which was transcending and ensured that everyone was entitled to a basic pay regardless of job role and prevented employers from exploiting employees, there has now however been greater argument for the introduction of a living wage, which is something that the present labour party actively support, with current opposition leader Ed Milliband and former Mayor of London Ken Livingstone supporters of a national living wage.

It is worth remembering that when Tony Blair came to power in 1997, he claimed that we had ‘reached the limits of the public’s willingness simply to fund an unreformed welfare system through ever higher taxes and spending.’ Urgent welfare reforms, he said, would ‘cut the bills of social failure’, releasing money for schools and hospitals.

Welfare Reform 2012 – The Policy Agenda

The main elements of the welfare reform act are

The introduction of Universal Credit to provide a single streamlined payment that will improve work incentives

A stronger approach to reducing fraud and error with tougher penalties for the most serious offences

A new claimant commitment showing clearly what is expected of claimants while giving protection to those with the greatest needs

Reforms to Disability Living Allowance, through the introduction of the Personal Independence Payment to meet the needs of disabled people today

Creating a fairer approach to Housing Benefit to bring stability to the market and improve incentives to work

Driving out abuse of the Social Fund system by giving greater power to local authorities

Reforming Employment and Support Allowance to make the benefit fairer and to ensure that help goes to those with the greatest need

Changes to support a new system of child support which puts the interest of the child first.

This changes signal possibly the hugest shake up to the welfare act in one fell swoop, it can be argued however that New Labour were already implementing changes to reduce the welfare bill, but not in a way as direct as the coalition government, with one of the main focus being to reduce poverty and eradicate child poverty – which is something that this essay will touch on further on in the essay.

Britain now spends 7.2 per cent of GDP on it’s welfare system, and the costs of supporting the, supposedly, needy continue to rise. As the Whitehall empire grows, drowning the noble intentions of welfare in red tape, so too do the number who chose to abuse the system.

the turn against welfare is unprecedented. In previous times of austerity, public attitudes have always remained remarkably generous. Even in the straitened late Seventies, for example, seven out of ten people told pollsters they would like to see higher taxes to pay for higher social spending. The truth is that we have reached a watershed.

To look after the weak is the first duty of any decent government; to abandon them would be unconscionable.

Embarrassingly, Britain now has the highest proportion of working-age people on disability benefit in the developed world. And while just 3  per cent of Japanese people and 5  per cent of Americans live in households

where no one works, the figure in Britain is 13  per cent. 

The people who really lose from this, incidentally, are those who are genuinely disabled. They deserve boundless public sympathy; instead, thanks to the abuse of the system, they are too often treated with scepticism.

But behind all this lies a deeper issue. Beveridge designed the welfare state for a tightly knit, deeply patriotic and overwhelmingly working-class society, dominated by the nuclear family.

Though millions of people had grown up in intense poverty, they were steeped in a culture of working-class respectability and driven by an almost Victorian work ethic. In the world of the narrow terrace back streets, deliberate idleness would have been virtually unthinkable.

It could be said that the welfare reform might not necessarily be a change in direction for anti-poverty policies, but a policy implemented to change the mind set of a nation that has transformed from one where people thought about what they could contribute towards their own nation especially at a time of war, to a nation where certain individuals, bearing in mind a small minority of people believe they deserve more from the state without having to earn it.

The key factors of welfare reform is universal credit which will be an all encompassing payment that incorporates vast majority of out-of-work and housing benefits that households can receive.

Poverty – Relative and Absolute

Child poverty – Prominent reduction target. Major tax benefit reforms benefiting low-income families with children.

Working-age poverty – Policy focus on worklessness, not poverty in itself. Policies aimed at employment and income at work.

Employment – Clearest initial priority. Action through New Deals and ‘active’ policy towards unemployed.

Political participation – Some aspects of constitutional reform and parts of Social Exclusion Unit (SEU) agenda for neighbourhood renewal. Participation requirements embedded in nearly all policy areas. Targets for volunteering and confidence in institutions.

Poor neighbourhoods – Major focus of SEU, with ambitious overall target. Policies both area-based and for mainstream services.

Children and early years – Has moved up the agenda with reviews in 1998 and 2004. Large increase in resources.

Older people – services and long-term incomes – Royal Commission on Long Term Care – but divided report and responses in England and Scotland. State Second Pension and Pension Credit reforms.

The making of Anti-Poverty Policies

Anti poverty policies –

Tax credits (Child and working tax credits),

Child benefit,

housing benefit,

council tax benefit,

income based JSA and ESA (Job seekers allowance and Employment Support Allowance),

Income Support,

Universal Credit

Anti-poverty policy making – Joseph Rowntree Foundation

Prior to the Welfare Reform act the focus of policies was that the state help its citizens from the cradle to the grave with welfare support – polices introduced throughout which coincided with the introduction of the national health service has been the mainstay and direction of a lot of anti-poverty polices that have been introduced in which the state takes care of those unable to take care of themselves. Countless policies have been introduced in that time that have provided assistance to the elderly, disabled, women, children, unemployed and those with long-term sickness are some of the groups that polices introduce since Beveridge’s report in 1942 have focused on assisting and helping. Although it’s not a surprise that ever since the coalition came into government, bearing in mind that the party is dominated by the Tories as the majority party, there manifesto ever since 1979 and the era of Thatcherism has always been to reduce the role of the state and give individuals greater power and responsibility over their own lives.

The question has to whether the welfare reform act 2012 has signalled a change in direction for anti-poverty policies is not a straight forward question, with a straight forward answer, it can be suggested that it is important to look at the changes that have been taking place, with the welfare bill spiralling out of control, which was something noticed by New Labour when they came into power.

Conclusion

The welfare reform act can be seen as change in direction from the description of a ‘nanny state’ into state that ‘helps those who want to help themselves’