Re: The Welfare Reform 'Car Crash'

[nickd]

(49 Continued) George puts his emphasis on the following in his comprehensive spending review document:

"Introduces fundamental reforms to simplify the welfare system, promoting work and personal responsibility through the new Universal Credit as well as providing enhanced support for those with the greatest barriers to employment through the Work Programme.

The Universal Credit will be introduced over two Parliaments to replace the current complex system of means tested working age benefits. It will ensure that work always pays and reduce fraud and error, while helping ensure that the welfare system is affordable;

Spending Review 2010

puts the welfare system on a sustainable footing, making net welfare savings of £7 billion a year, including through withdrawing Child Benefit from families with a higher rate taxpayer, reforming Employment and Support Allowance, controlling the cost of tax credits, and capping the amount a work less household can receive in benefits to no more than an average family gets by going out to work;

This is how he envisages savings will be phased in year on year

2011/2012 = £320M
2012/2013 = £2,555M
2013/2014 = £5,990M
2014/2015 = £7,040M

The prediction is that by 2015 the savings will be £7 Billion (well 7040 million)

The CSR makes it clear that the biggest savings will be in the time limiting of ESA claims to 12 months at £2,010 million (say 2 billion) and Child Benefit at 2,500 (say 2.5 billion). It's a bit of a let down with DLA reductions only giving him an estimated saving of £135 million by restricting DLA mobility payments to those in residential care.

A more substantial area of savings comes from Working & Child Tax Credits at a combination of £385M + £390M + £300M providing £1,185M against which you deduct £560M for increases in the child elements which are set to rise.

Unsurprisingly, we haven't heard too much about the estimated savings of £490 million which he plans to achieve by localising and reducing Council Tax (and the benefit changes which go with it)

The capping of benefits and housing benefit restriction is set to save £485M.

There are minus changes in cumulative growth on work and pensions expenditure amounting to £5.5 billion on Departmental budgets.

But we'll stick with these estimated £7 billion savings for now because they are what George needs to show us he can deliver.

In his CSR review he puts further emphasis on

"How the Government is radically simplifying the existing benefits system through the creation of a new Universal Credit, to ensure that it always pays to work;"

• The Government is providing enhanced support for those with the greatest barriers to employment through the Work Programme, incentivising specialist private providers through an innovative payment by results mechanism.

•The Government is ensuring the Jobcentre Plus network can continue to provide support that is internationally acclaimed as effective in getting people back into work.

So broadly speaking we can see which way he's headed, it's not quite in line with Freud on Fraud or living up to the populist tabloid headlines though is it?

Question is to deliver £7 billion in savings how much is it all going to cost? Mmm, now that is the question.





Link to comprehensive savings review document
cdn.hm-treasury.gov.uk/sr2010_completereport.pdf

[johnnybegood]

you have PM's

[nickd]

Thanks Johnnybegood - both replied to.

[nickd]

(50) The political spending history of welfare reform

It's important to consider this aspect because all parties claim different things when it comes to their respective track records on welfare reform.

So let's just examine their respective records on spending.


Who spends the most?




Or is it




What do you reckon?


Well it's interesting to listen to what the IFS say..

"The late 1980s saw the first substantial fall in social security spending as a share of GDP since 1948–49. This was the result of rapid economic growth and the associated fall in claimant unemployment, combined with the fact that many benefits, the most notable of which was the Basic State Pension, were only increased in line with inflation. The economic downturn in the early 1990s, however, saw the economy contract and unemployment rise to 2.9 million. This led to another dramatic rise in the share of national income spent on social security, which reached an historic high of almost 13 per cent in 1993–94. After that, social security spending fell as a share of GDP, as the economy grew and the unemployment count dropped. The
proportion of GDP allocated to social security expenditure gradually increased following the turn of the millennium, despite continued economic growth. This was mainly due to the increasing generosity of benefits targeted at pensioners (e.g. the
Pension Credit) and families with children (e.g. the Child Tax Credit). Largely as a result of the recent recession, expenditure as a proportion of GDP rose substantially from 11.38% in 2007-08 to 13.74% in 2009-10 (due both to an increase in benefit
payments to the newly unemployed and the lower level of GDP)."

-----------------------------------------------------------------------------------

So let's not forget that under the Conservatives the unemployment count ran at a record 2.9 million. Let's not also forget that in 1999 (two years after Labour came to power in 1997 the incapacity claimant count stood at 2,655.38 - almost exactly the same as it was in 2009.

Let's also not forget it was the Conservatives who introduced Disability Living Allowance in 1992 and Incapacity Benefit in 1995, I say this because these are two benefits they now condemn with alarming regularity.

But one of the most interesting figures is to be found in the IFS 2010 report at page 85 under Appendix A. Benefit Expenditure from 1948–49 to 2009–10 - Table A.1. Spending on benefits in cash terms and real terms (2009-10 prices), real increases and spending as a share of GDP.

In 'real' terms over the life time of Conservatives the welfare bill went up on average by 3.64% every year whereas under the Labour administration it was less at 3.16% per year.

So now you know!

There are schools of thought which say that the Conservatives shipped high numbers of the unemployed over to Incapacity benefit from 1995 to conceal their embarrasment at running such high numbers of people out of work; - the figures seem to bear this analogy out but hey, it's not for me to get political.

Link...

www.ifs.org.uk/bns/bn13.pdf

[johnnybegood]

not sure where to post this - can you move it to appropriate place please?!

Anyone who provides welfare and benefits advice or undertakes casework in this area - only a few days left to submit your views

In November of last year, Professor Harrington's Independent Review of the Work Capability Assessment made a number of recommendations on how the process could be improved. The Government accepted these recommendations and started implementing them.

The Disability Benefits Consortium (DBC) wants to gauge what the impact of these recommendations has been by collecting the views of welfare advisers and caseworkers. This survey will be used to feed into the second year of Professor Harrington's review of the Work Capability Assessment and will help to ensure that any further improvements that are needed to the process are made.

The survey should only take around 10 minutes to complete.



www.surveymonkey.com/s/wca_year_one_recs

[nickd]

Johnnybegood: Let's leave it where it is for now, I'll move it a bit later and give it some prominence. I'm a bit pushed for time now, if you go to 'home' and then go to the relevant section you can start a 'new thread' and just copy and paste into that? You can give it a new name that way and it will stand alone? - any probs, I'll sort them out.

[nickd]

(51) Here's an interesting article posted by Jman on Ilegal and also brought to my attention by Johnnybegood; - it highlights one of the hidden costs of these shambolic welfare reforms. The potential costs of our clinicians putting targets before their duty of care.


ATOS may be contracted by the DWP




But they shouldn't forget their professional duty as doctors
and nurses.



Read how 12 Atos Healthcare Professionals could be struck offin this article which appeared in the Observer/Guardian

"Atos doctors could be struck off"[/u]

Twelve medics at the disability assessment centre are under investigation by the GMC over allegations of improper conduct

Daniel Boffey, policy editor guardian.co.uk, Saturday 13 August 2011

Twelve doctors employed by the firm that is paid £100m a year to assess people claiming disability benefit are under investigation by the General Medical Council over allegations of improper conduct. The doctors, who work for Atos Healthcare, a French-owned company recently criticised by MPs for its practices, face being struck off if they are found not to have put the care of patients first.

The Observer has found that seven of the doctors have been under investigation for more than seven months. The other five were placed under investigation this year following complaints about their conduct.

It is understood that the majority of allegations concern the treatment of vulnerable people when the government's controversial "work capability assessments" were carried out, but the GMC refused to comment on individual cases. The development will add to fears over the pace and radical agenda behind the government's welfare-to-work policy, which led to protests in Westminster in May by thousands of disabled people. It will also raise concerns about ministers' commitment to Atos Healthcare, which was recently granted a three-year extension on its contract................"


Rest at link below :


www.guardian.co.uk/politics/2011/....duct-disability

* thanks to Johhnybegood and Jman for flagging this up.

[nickd]

(52) Unemployment on the rise





Jobcentres will only be effective;- providing they have vacancies

As if things aren't bad enough, a rising tide of the number of people out of work, increasing doubt over the role of the ATOS clinicians and consequent escalation of costs all threaten the smooth implementation of welfare reform. The recent riots has government in a spin over how it should punish offeders by benefit sanctions; - it may grab the attention of voters swayed by populist headlines - but won't it just introduce more complexity, more law and ultimately make it difficult to set the goalposts?

Not to mention bring about even more appeals?

We're in for a rough ride

The number of people out of work is on the up, unemployment is rising at a faster pace than private sector job creation; - which must come as a dissapointment to the coalition government in terms of their hopes for future growth.

What I'd like to know is the real statistics for people currently claiming IB, IS for IB, ESA (both variants) and JSA (both variants) and how they're tracking these figures.

One factor they don't seem to factor in is how the increased JSA stats can be partly put down to an increase in claims related to ESA refusals.

Watch the ministers and their scripted messages on 3 separate videos on Mylegal - Unemployment - 'The Ministry Of Excuses'

It's surprising how they seem to now accept it's the world market decline which is a factor, - not really what they've said in the past.

Listen to George Osborne, Chris Grayling and David Cameron via 3 videos and make up your mind as to whether they'll be able to stop the numbers of unemployed people rising even further

mylegal.org.uk/index.cgi?board=frontline&action=display&thread=421

[nickd]

(53) So are Government's plans on welfare reform simply just a lot of hot air?





Will these reforms put welfare on cloud 9 or in cloud cuckoo land?


Part 1 - How it all was doomed to fail from the start

One of the things which has struck me most about all of this welfare reform is the abundance of ignorance which exists about the benefits system. There are hundreds, if not thousands of various blog posts which put forward their often illiterate views over how the work shy should work, the fraudsters who should pay and those who know 'someone on the fiddle'. It's bred a new form of hatred, it used to be racial, then homophobic; - but now it's reverted to an unhealthy hatred towards those who, for whatever reason, are reliant on the state for support.

Given our economic and fiscal collapse, which frankly we' all be paying back for many years to come, I'd have thought there would have been more hatred towards the monopolist banking institutions; - however, this transpired to be short lived.

Equally, politicians spend hours blaming each other, but in truth people feel resigned to not being able to do anything about bankers and politicians for they are seen as the untouchable. Instead, they choose to pick on those least able to speak back. It's a form of bullying, I'm sorry to say we are becoming a nation of bullies, it's not nice; -but it's how things are.

It's also where Government has allowed itself to get carried away, it means politicians from all sides have been able to engage in tactics of distraction and courting popularity, they use it to take the focus off themselves and know that by being seen to share what they see as the 'popular view', they'll gain some degree of public support. In my view, it will transpire to be a serious mistake to have got off on such a wrong footing.

I'm not sure whether I blame the media or those who feed them with the kind of headlines which I've referred to previously in this long and drawn out article. I suspect it's a mixture of both. The consequences of getting all the media hype wrong are disastrous for those who stand to be most affected by these reforms; - the genuinely disabled and incapacitated. Unfortunately, they'll be more casualties, I've referred to the tragic consequences of what's already happened to some of them.

The tabloid headlines have been shown to have been a lot of hot air, time and time again. But, regrettably by the time the banner headlines appear, the damage has been done. It's fueled all of this socially regressive hatred and taken us back to the draconian days of labeling the disabled as demons and misfits, we should never return to those days - but we're well and truly headed in this deplorable direction.

Far too little was said of the apologies proffered by Iain Duncan-Smith and Lord Freud over how they'd got the statistical interpretation all wrong, we mustn't forget it was this which acted as the catalyst for the irresponsible headlines which appeared and became very effective at labeling an increasingly loathed sector of society. It was the Archbishop who demanded an apology, but it was never enough.

But government has made a mistake in terms of raising the expectation of it's benefit bashing supporters, government has put itself in the unenviable position of needing to live up to its headlines, or its supporters will feel badly let down.

Government has made the classic mistake of setting out its reform agenda according to what it thinks the majority of voters want to see happen. In doing so, Government has paid too much attention to feeding socially destructive headlines which it now has to live up to, or else it risks being seen to let its voters down.

Government has paid far too little attention to the accuracy of its headlines and will now pay the consequences of getting the detail wrong when its reforms are shown to be unworkable.

[nickd]

(53) Continued...

So are Government's plans on welfare reform simply hot air?



[Part 2] Government hasn't done the right homework





Nor is its existing knowledge base the best use of resources


Having already told their supporters what they were going to deliver and after effectively advertising their promises in the tabloids; - did government simply engage with those who would tell them what they wanted to hear?

In short, I think the answer isn't a straightforward yes. Indeed, Iain Duncan-Smith made a promising start on welfare reform, he's well researched his subject over the years and clearly had made an attempt to look at the root causes of welfare dependency. But where this all goes horribly wrong is in having to live up to all those benefit bashing headlines. They've made a rod for their own back from which they'll find it hard, if not impossible, to deviate. Ironically, it cripples them from being able to depart from their chosen path; - it's a disability which they'll have to accept they've irresponsibly inflicted upon themselves.

The problem is this government's all too fond use of professors, report committees and endless fountains of apparent knowledge. There is simply no point in only engaging with those who share the same outset views, or when faced with challenging criticism to disengage from those who give it; worse still to commit the cardinal sin of moulding unfavourable responses until they fit hand in glove with what government says. Once you go down this route the whole exercise lacks any form of constructive value or purpose.

There's little sign that Government actively engaged with any one of those who work with benefits day in and day out, those who deliver the service, those who depend on them and those who problem solve all the complexity of issues which arise out of systematic failure. Indeed Government, through the Ministry of Justice, has argued there is no need for benefit specialists within the legal aid scheme due to an apparent basic nature of all benefit enquiries; - it speaks volumes of how Government fails to comprehend the complexity. It's perverse when in other quarters, they justify spending billions to simplify what they recognise as an overtly complex system.

Government issues consultations and impact assessments, but its responses show they are only paying lip service to what they are being told by those who know the system far better than any number of professors or select committees. They choose to rely on people who have never had any real experience of being at the receiving end of an overly bureaucratic claim and verification system. In short, they should have engaged with those in the know.

I'm not decrying the work of the professors and the committees who have tried hard to get to grips with an understanding of the system, but understanding it is a million miles from actually dealing with it. Who am I to comment they would no doubt say; -yet, I can say with reasonable certainty that I know the difference between an ESA50, an ESA85, an A1, an IB113, an HB1, a valid supersession/revision under section SSA 9/10, a recoverable overpayment under section SSAA 71 and the split duties contained with regulation 32 of the Claims and Payments regs. I, along with hundreds of other welfare benefits specialists risk being hung out to dry as Government fails to recognise where we could actually be helping to play an active part by pointing out where complexity could be reduced, we've a major role to play but Government wants to park us up and demean the work we do. Welfare benefit specialists are in so many ways the interpretor between the confused claimant and bureaucratically bound officialdom.

It was the Institute of Fiscal Studies who in their welfare paper of 2010 warned that the success or failure of these reforms was subject to identifying the devil within the detail.

In my view there is an inherent danger in failing to identify the detail. Take the centre for social justice's 'Dynamic Report' for instance; - it fails to correctly identify how housing costs are not just covered by Housing Benefit (as they are with rent) but by mortgage interest payments paid as part of certain income based benefits, these mistakes elsewhere in other reports I have looked through.

If you don't get the detail right through misunderstanding the system it becomes an absolutely hopeless task to attempt to reform it; it also becomes impossible to accurately quantify any fiscal savings which could be made.

Equally, there are widespread gaps in sets of statistics used by various departments, they show up in one set but not another. I fail to see how any politicians can be asked to vote upon the basis of such unclear figures. Government should provide those charged with considering reform a much clearer evidence base upon which to do so. As it stands they are simply blinding those they need to convince with science; - it is this which also accounts for a great deal of the problematic media distortion.

Government's agenda for successful reform must be built upon a firm evidence base inclusive of the views of those who have 'real time' experience and knowledge of the difficulties of the system they seek to simplify. Failure to recognise those who can make a valuable contribution is counterproductive as well as self defeating. It leaves Government wide open to allegations that it only seeks to reform to suit its idealogical aims, it ignores those who could constructively contribute at its peril, as ultimately it is government which is charged with successful implementation of all it has promised.

[nickd]

(53) Continued...

So are Government's plans on welfare reform simply hot air?


[Part 3] A greater need for transparency, honesty and integrity [/u]





True welfare reform demands an acceptance of truth


Successful reform will depend, as it does in many other areas, on transparency and and acceptance of the truth. No single government has an unblemished history on the delivery of welfare. It is hypocritical of the current coalition government to blame the previous administration for all that's wrong with welfare; equally there can be no denial that the Labour government failed to get to grips with the welfare state. Neither party can claim all the glory. That said, there are some changes in the provision of welfare which we should not be condemning. It's become all too easy to say everything in Britain is broken, if it is it needs a nation of fixers. If it isn't we should adhere to a straightforward policy built upon the age old adage of 'if it's not broken- don't fix it'. It will be very costly to engage in unnecessary repair.

The Tory government cannot deny that it pumped millions into the creation of Disability Living Allowance in 1992 and Incapacity Benefit in 1995, under their last spell in power, unemployment rose to very high levels. It is essential to be honest over the combined figures of those who are unemployed and those who are incapacitated.

Again media distortion has already played a damaging part in giving voters the wrong perception. It is absolutely vital that government doesn't put all the blame upon the feckless and work shy as well as a nation full of benefit cheats. The figures and statistics simply don't bear out the media's grossly distorted headlines. The reality is that actual fraud has been shown to account for only 0.85% of 1% of the entire benefit bill. It's still too much in monetary terms but it's far less than people are being led to believe. In the same way, the number on incapacity and unemployment related benefits has not multiplied too significantly over the course of the last administration. It is the combination of the two elements which become key in the analysis. Incapacity benefits has become a shield which allows a degree of hiding the numbers of claimants out of work.

It would be foolish of government to hide from the evidence that higher mortality rates and an increase in child related disability living allowance expenditure account for a great deal of 'growth' in this sector. The nation is living longer and awareness has increased over what can be claimed to compensate for genuine disability. This kind of growth should not be confused with more of the blame game by way of suggestion that it emanates entirely from an increase in claims by those of working age.

It is true that the labour government did far too little to quell welfare dependency among the long term incapacitated. They have quite correctly come under criticism for their over reliance on private welfare to work contractors such as A4E and Reed; both of which were heavily condemned by a public accounts committee for poor performance and abysmal delivery in terms of reducing the claimant count by the creation of 'real' jobs. The blame game backfires on the current coalition for these failures because they continue to offer further contracts to the very same suppliers who failed to deliver in the past.

One of the key areas of reform was the introduction of the Employment and Support Allowance which was born out of the 2007 welfare reforms. The recipe is probably right; - but there must be more of an acceptance that the ingredients are all wrong. There can be no denial that the medical assessment is deeply flawed, it's been condemned by a select committee and concern over the entire process is widespread among 50 major groups representing the disabled. Macmillan, the cancer charity organisation, has condemned the process in its paper 'failing the system'. More recently, we learn that 12 of the ATOS health care professionals are under investigation by the General Medical Council. Government has to accept the rising tide of evidence against an assessment process which is increasingly coming under question.

That said; the Employment & Support Allowance could work. But in order to do so Government must stop using it as a conveyor belt to get people off incapacity related benefits and onto Jobseeker's Allowance. Employment & Support Allowance is the vehicle by which those who have a limitation can get the support they need to transition them from welfare and back into work. It should not be compared with the Incapacity Benefit it replaces where the determination was over those could work and those who could not; - it's a fundamental misunderstanding of the purpose behind the allowance. It was this misunderstanding which led to the '75% on the sick are skiving' headlines appearing in the Headlines. Government incorrectly used the ESA reassessment statistics in referring to 1.9 million untested incapacity benefit claimants. It's this kind of error which will lead to disastrous reform and ultimately failure to deliver any deficit reduction.

It makes no economic sense for the incoming administration to simply engage in the reversal of previous policy for the sheer sake of being seen to 'change the system'. Renaming and repackaging the Flexible New Deal into the 'Work' programme will achieve nothing unless lessons are learned from the past. Just because providers are being paid on the basis of results doesn't make it a recipe for success. A recent committee considering Private Funding Initiatives highlighted the high cost of private sector involvement. 'Buy now pay later' may absolve us of paying out the cash now but we should be under no illusion that we are eventually committing our finances to pay providers up the £14,000 per person to get them off welfare and into work.

Government should also be far more cautious over its over selling of the Universal Credit. Whilst simplification is laudable, the reality is that of 51 different benefits in the UK welfare system, the Universal Credit only partially merges six. There will be huge problems in its implementation with many problems still to be ironed out in terms of alignment and putting the right IT systems in place. Government should learn lessons from the past when tax credits introduced a wave of overpayments; - back then, people had far better access to proper advice to sort problems out. Cuts in expenditure make this far less likely which will mean many thousands of people will be banging their heads against the wall through the sheer frustration of being unable to get help.

There is also a need to consider the true impact of rising unemployment, lack of growth in the private sector and a larger number of students who will not find their way into higher education because of the increases in tuition fees. The increasing number of part time vacancies and extension of the working age will all impact upon real time employment related statistics. Government's biggest challenge is the creation of sustainable jobs; - not just the creation of those which appear in statistics to justify huge expenditure on welfare to work programmes.

The bigger question marks remain over the cost of reform, the practicality and more accurate prediction. Government should be honest that it is conducting an experiment and dealing with unknown quantities.

Government cannot promise to fix a system until they know precisely what requires repair. It is inherently dangerous to raise the voter's expectation by promising that Universal Credits will simplify the system to such an extent that problems will disappear upon implementation. Government has to accept that, as with any experiment, it is dealing with a huge variety of unknown quantities. There also needs to be more transparency and openness about the real problems which exist within the welfare structure, not least that 42% of the expenditure is related to pension provision; - an expense which rises as the mortality rate increases. It is unacceptable to blame it on the idle & worthlessness or fraudulent claims without any firm evidence base upon which to formulate such assertions.

[nickd]

(53) Continued...

So are Government's plans on welfare reform simply hot air?

(Part 4) Has government really got the figures to add up?[/u]



Or are they just plucking figures from the air?

There are many DWP statistical data tables like the one above, but are they really all that accurate? It's a fair point given the amount of error within the DWP, HMRC and Local Authorities; - where there is error, there is also the danger that any statistics produced will be inaccurate. It therefore stands to reason that government may be working off unreliable data sets.

A closer analysis of Government's projected £2 billion savings by cutting ESA claims to 12 months highlights an inconsistency. Examination of the CSR at Table 3: [Spending Review AME policy measures] shows that government plans to make the following savings in reducing ESA as a time bound claim:

Contributory Employment and Support Allowance: time limit for those in the Work Related Activity Group to one year:

By 2011/2012 = £0
By 2012/2013 = £1,025M
By 2013/2014 = £1,530M
By 2014/2015 = £2,010M

Making a total of £2,010,000 by 2015

A parliamentary impact assessment dated 20/4/2011 makes the following Key 'assumptions'

(1) Number of people moving onto ESA through IB reassessment that are placed in the WRAG. Current assumption is nearly 900,000 over 3 years; this estimate may change.

(2) Assume around 90% of people in the WRAG on contributory ESA will be time limited in the longer term.

(3) Assume around 60% of those affected will be able to claim income-related ESA.

(4) Primary legislation in place by April 2012.

Government estimates 900,000 claimants (previously on IB) will be placed in the WRAG group over the course of 3 years; - around 300,000 a year. It has already been pointed out that there is clear need to track these IB to ESA cases, in 2010 the IFS put the number of IB cases at 1,949,300 (approx1.9 million), but this parliamentary impact assessment puts the figure at 1.5 million. On top of which there are a number of ESA 'stand alone' cases.

The following are average costs (some claimants will receive different rates of both IB and ESA)

Expenditure on IB cases (2010) at 1,949,300 claimants works out at £6,111,000,000 or £3,134.97 per person per annum (£60.29 per week) Source IFS

Expenditure on ESA cases (2010) at 479,430 claimants works out at £1,268,000,000 or £2,644.81 per annum (£50.86 per week) source IFS

Estimated average net savings of £2,000,000,000 by 2015 (in accordance with CSR) by phasing 900,000.00 claimants off ESA WRAG works out at £2,222.22 per person per year (£42.74 per week)

The impact assessment addresses the uncertainty over how many ESA claimants will be able to claim income based ESA and even where they may seem to lose their entitlement it could be offset by an increase in say their mortgage housing amount which brings them back into IB ESA entitlement; - similarly there may be other rises and adjustments in related benefits/tax credits.

They also foresee a large number of appeals (up to an expected 50%) but fail to appreciate how those in the ESA assessment phase cannot be placed in the WRAG group because they need to move from assessment before they can be placed in the WRAG. It also remains to be seen whether only 900,000 end up in the WRAG group. Government has based its assumptions on factors it cannot possibly know or predict with any degree of acceptable accuracy.

The addition of further costs is something which will heavily impact upon net savings by 2015.

The assessment details the following expenditure:

There will also be administrative costs associated with the policy. These occur from the following:

(A) one-off costs of changing the IT to facilitate the policy (£0.5m in 2011/12);

(B) recurring costs of closing contributory ESA claims and either starting or amending an income-related ESA claim for those who qualify (approximately £30m in 2014/15); and

(C) recurring costs of processing possible extra appeals (up to £30m in 2014/15).

A total of £560,000 million has to be deducted from what is quite possibly an over estimated saving of £2 billion to the exchequer.

The £2 billion savings reflected in the Comprehensive Savings Review do not marry with what it says in the impact assessment:

Costs and benefits

The proposal to time limit contributory ESA as set out above is expected to generate net benefit savings building up to around £1.0bn per annum by 2014/15. These are fiscal savings; there would also be equal and opposite economic costs to the individuals affected. This consists of the following elements:

(A) gross fiscal savings from ceasing contributory ESA for those affected (£2.6bn in 2014/15);

(B) gross fiscal costs to income-related ESA for those that qualify (£1.3bn in 2014/15); and

(C) gross fiscal benefit costs due to increases to Pension Credit, Housing Benefit, Council Tax Benefit and Tax Credit payments for those whose income brought to account decreases as a result of the change. There will also be a small reduction in taxation revenue from those who lose their (taxable) contributory ESA. In total this is expected to generate a cost of £300m in 2014/15.

So costs of £1.3 billion and a further £300 million fall to be deducted?

There are serious inconsistencies in this one area of £2 billion estimated savings alone; - they simply don't stack up.

Elsewhere, I have detailed how the number of appeals which could increase to a potential of almost 1 million per year by 2015 (which would simply be unworkable) if the appeal rates increase and reform changes are implemented across other benefits by then. It's a double edged sword;- for if the implementation isn't made, then the savings won't be found.

The current rate of review on IB to ESA cases runs at around 10,000 per week. The impact assessment sets out its target of reviewing 1.5 million claims as follows:

"IB Reassessment is a programme to reassess some 1.5 million people on old style incapacity benefits to see if they are eligible for ESA using the WCA between Spring 2011 and March 2014."

Over the 38 month period this means the DWP will have to review 39,473 cases per month; - working out at 473,684 cases per year. On the face of it this may not appear to match an earlier prediction (see post 38) which I made that there would be around 271, 230 appeal cases as it would account for 57% of all claimants appealing. However, an important factor is one which I have continually mentioned throughout, this is how new ESA claims need to be factored in and added to the existing IB/ESA conversion caseload. I would therefore hold with the 271,230 appeal cases per year figure as quite possible. It needs to be considered that whilst the overall IB/ESA caseload may drop as people end their claims, those who are most likely to appeal are those who make a new claim in the first instance.

An additional factor in so far as appeals are concerned is how many claimants will end up appealing several times over due to a continual review process conducted by the DWP on ESA claims.

Government needs to work to its figures to achieve its estimated savings or else it will not achieve deficit reduction; - ultimately it is this upon which government will be judged. Government has made a fundamental mistake in not realising the complexity which exists within the benefit system and which will preclude it from making the savings it had hoped to by 2015. Government should recognise that however much it may strive for a leaner system, it will take many more years than it forecasts to achieve it. There is the additional factor of 'voter expectation' which I deal with in section 5, this will become of key importance as Government has raised its voters hopes in slashing welfare dependency, if it fails to deliver, it risks losing appeal with the electorate.


www.dwp.gov.uk/docs/esa-time-limit-wr2011-ia-revised-apr2011.pdf

[nickd]

(53) Continued...

So are Government's plans on welfare reform simply hot air?


(Part 5) Dave's got a lot to live up to with all his Headlines[/u]






But won't Dave just end up letting his voters down?


Welfare reform will hit the following people the hardest:


* Those are who've paid their contributions and saved will find they can't get Employment & Support Allowance for any longer than 12 months; - many will find their money gets stopped completely as early as April 2012 if they've been getting ESA for the last year. Government will make savings of £2 Billion from those who no longer qualify because they've put away savings.



* Despite the spiralling cost of living, Child Benefit is being frozen for 3 years after which it will rise in line with the Consumer Price Index instead of Retail Pricing, meaning squeezed families will lose out to the tune of £1 Billion pounds. Families with at least one higher tax band earner will lose their entitlement altogether; - whereas those with two just under the band will carry on getting their Child Benefit; - families will lose out to the tune of £2.5 Billion in Child Benefit. Some families with two people earning £78,000 a year will still get their Child Benefit, whereas others with one earning over £40,000 will go without.



* Hard working families will lose out as Government brings in changes to Working Tax Credits. This will include freezing the basic and 30-hour elements for three years from 2011-12. Reducing the percentage of childcare costs payable from 80% to 70% from April 2011. Abolishing the 50-plus return-to-work bonus from April 2012. Change the eligibility condition so that a couple with children will need to work for at least 24 hours per week between them, with one working at least 16 hours per week, in order to qualify for WTC from 2012-13. These measures are expected to save £40, £625, £385 and £390 million per year respectively by 2014–15. The Comprehensive Savings Review sets out how Government wants to make savings of Working & Child Tax Credits to the tune of £1,185 Million pounds. Families will need to work longer to qualify and will end up with less.



* Welfare reform will see £490 million being saved in localising and reducing Council Tax Benefit.



* Despite government's assurances that it will create a workpool in the private sector, the reality is that it will be private welfare to work contractors who receive sums of up to £14,000 per person to 'create jobs'. The cost to the tax payer is estimated at varying sums from to £3 million to £3 billion pounds. They could work out out as high as £9 billion pounds depending on how difficult it is to get people back to work.



* The implementation of Universal Credit has been hailed as the answer to simplifying the process of claiming benefits, it will mean merging 1.9 million Incapacity/ESA claims, 0.5 million ESA claims, 2.4 million Working Tax Credit claims, 5.7 million Child Tax Credit claims, 1.8 million Income Support claims, 1.4 million Jobseeker's Allowance claims and 4.7 million Housing Benefit claims. In real terms this means correctly identifying and then merging 18.4 million separate claims into one; - it's a process which will take far longer than Governments says and will be anything but smooth.



*HMRC will need to sift through 7.7 million Child Benefit claims in order to work out which families will lose their entitlement; - it'll be very problematic where the self employed are concerned or where the earnings amounts are in dispute as more and more employers reduce their worker's hours.



*The DWP will have to review 3.1 million Disability Living Alllowance claims as they phase in the Personal Independance Alllowance. The Comprehensive Spending Reviews highlight the first target group as these who are in receipt of the higher mobility component and are in residential care; - their mobility payment will be axed.

____________________________________________________


In total the process will require the revision of at least 29.2 million claims, all at a time when staff are being cut back and computer systems are no where near ready.

Working families and those re-entering the workplace following periods of incapacity will be faced with systematic failure and further confusion which will continue until the process is properly sorted out.

People will be left in crisis without the money they throught they'd be entitled to, the appeals system will go from overload to total meltdown and government will have taken away all proper avenues of help; - hard working people and the genuinely disabled will become very angry and ultimately feel let down by government and all its headline grabbing promises.


Many thousands of working families and the genuinely incapacitated will be hit; it'll lead to many feeling let down when they were led to believe it was the feckless and idle people who were going to be singled out; - the reality is that working families will bear the brunt and pay the price.

But what price?, that's the big unknown.

[nickd]

(53) Continued...

So are Government's plans on welfare reform simply hot air?


(Part 6) As the dole queues grow and the number of people reliant on benefits increases, [/u]





More and more people will be seeking redress through social security tribunals to put right systematic failure in the processing of their claims and to rectify defective decision-making caused by too much emphasis being placed on benefit refusals to meet target driven reductions in the claimant count

How bad could it get?

(A) So we've already dealt with a potential 183,750 number of IB to ESA transfer cases.


(B) On top of which we have the 'new claim ESA's, currently running at 197,400 in 2010/2011.

This will fall as it represents the 'new claim (since October 2008) group and the accent will probably turn more towards the existing IB/ESA transfer cases. None the less we know from the previous figures that new claims run at around 27,000 to 30,000 new claims a month from the Oct 08 to August 2010 figures (These cannot have included any IB to ESA transfers). Let's use the 27K figure and assume people continue appealing at a rate of 27%; this works out at 87,480 appeals per year. (27K X 12 = 324000 - of which 27% is 87,480).

(C) The 87,480 figure for new ESA's is added to the 183,750 ESA transfers; giving a potential 271, 230 total IB-ESA/ESA appeals per year.


Now add the other groups.

(D) JSA appeals

2010/2011 figures show there were 47,000 (or 11%) for Job Seeker’s Allowance (JSA) appeals. This represents an increase of 51% on the previous year. Now we know a large number of ESA claimants are being found 'fit for work' or they abandon their claim. These run at around 900,000. Of the 900,000, a certain amount will go to the Jobcentre and do battle over getting them to accept they are 'fit, ready and able to work'. These are the basic JSA claim conditions; - you need to bear in mind these are people who had previously tried to claim on the grounds of incapacity. The Jobcentre will feel uneasy as accepting some of these claims because they are the people who are essentially saying to employer's 'we've got lots of people here who can work'. It will undoubtedly lead to claim related problems.

In addition to which there will be an increasing number of sanction related appeals as the number of JSA claims grow. There are currently around 1.4 million JSA claims according to certain sets of figures, others put it in excess of 2 million. A problem in the statistics is over the merging of IB/ESA cases onto JSA as these represent a 'transient' claim group. Let's go with with 1.4 million but add in around 300,000 which is likely to reflect job losses in the public sector. I'm being conservative with the figures and reckon 1.7 million is fairly representative. Assume 25% appeal. Bear in mind the fraud detection measures as well; these will lead to overpayment related appeals as people contest allegations they 'were working on the side' or 'not declaring a partner'.

Here's the maths:

1,700,000 JSA claims, 25% appeal = 425,000/4 years = 106,250

There's a potential 106,250 additional JSA appeals per year, many won't succeed, but it won't stop people appealing.

(E) 83,600 or 20% were for Disability Living Allowance/Attendance Allowance (DLA/AA) appeals; - up by 11% on the previous year.

Why? Well, a lot of these will be tied to claimants who have had their long term IB claims transferred to ESA. These will flag up inconsistencies in the claim criteria for DLA due to the strict nature of the activity descriptors. Take a claimant on DLA higher rate mobility who has been on IB for years. The ESA assessment (in the current strict form) is likely to find the claimant to have no significant walking impairment to the degree that they are are entitled to the DLA mobility component. Similarly care awards are likely to be affected too. Now the IFS claim figures for 2009/2010 show there were 3.1 million DLA claims. That's 3,100.000 and we all know how this is going to backfire. Remember, the implementation of Personal Independence Payment will put pressure on the DWP to 'clean up claims' prior to the implementation of PIP. It will throw up many retrospective entitlement appeal issues.

3,100,000 DLA claims, 20 % appeal = 620000 / 4 years = 155,000

So that could be another 155,000 DLA appeals per year into our already bursting point Tribunals

So far we have:

155,000 DLA Appeals
106,250 JSA Appeals
271,230 ESA/IB Appeals

532,480 Sub Total


Here's a reaonable prediction of what will happen to the following benefit related appeals, I've already explained why.


(F) Income Support - Total Claims 1,800,000.00, let's say 10 %appeal making 180,000.00 appeals to be heard by 2015 or 45,000 per year.


(G) Tax Credits - Total Claims 8,100,000.00, let's say 10% appeal making 810,000.00 appeals to be heard by 2015 or 202,500 per year.


(H) Child Benefit - Total Claims 7,700,000.00, let's say 2% appeal making 154,000.00 appeals to be heard by 2015 or 38,500 per year.


(I) Housing Benefit/CTB - Total Claims 4,700,000.00, let's say 6% appeal making 282,000.00 appeals to be heard by 2015 or 70,500 per year.


In total these additional appeals could add an enormous 1,426,000.00 appeals to be heard by 2015 or 356,500 per year
which needs to be added to the 532,480 we already have and we end up with 888,980 additional social security appeals per year; - not including some of the others such as Pension Credit, Industrial Injuries etc etc.

Read more: mylegal.org.uk/index.cgi?board=frontline&action=display&thread=405&page=2#ixzz1Vl6tkAoM


The remaining benefits in the system are:


(J) Attendance Allowance - with 4200 appeals receipts in 2010/2011 - let's predict a 3% increase, making 4,326 per year


(K) Bereavement benefits stood at 500, say an increase of 2% which gives us 510 per year


(L) Carers Allowance were 1,600 - a higher rate of increase at 12% seems probable given all the accent on disability related appeals -upping the figure to 1,792 per year


(M) Child Support Allowance appeals were 3,700 - now I'd guess cash strapped parents might push this up at around 15% giving us an extra 555 appeals - making 4,255 appeals per year.


(N) Compensation Recovery Unit appeals were 370, let's those at the same figure and keep them at 370.


(O) Health in Pregnancy, was 390 - we'll keep it the same so 390


(P) Home Responsibility Protection was 25. An increased awareness over pension related issues may push this up by a nominal margin, it won't be much so let's just say 26 appeals.


(Q) Industrial Injuries Disablement Benefit was 9,200, now a larger increase seems more probable because this is being 'reformed' and disputes are more likely to go to appeal. Applying a 15% increase puts this up by 1380 giving us 10,580 appeals.

Now the sum total of all of these appeals was 27,853 in 2010/2011 and the above predicted increases would take this up to 30,64.20

We add this to our existing 888,980 and end up with a figure of 919,628 - it's a phenomenal increase.

Remember how CAB were claiming that £16 billion went unclaimed per year, what on earth would happen if all those highly effective benefit take up campaigns started up again? - it would almost certainly end in some disputes and push our annual appeal figures over one million a year; - the Tribunals could never cope.

So there we have it, now I would say this was a perfectly valid and well reasoned argument as to how these Tribunal appeals are set to increase very dramatically.

____________________________________________________

Government's answer to the appeals crisis is much the same as was in the recent riots, it increases the court's capacity by employing more judicial panel members, including Judges, with an increase in its number of judicial sitting days to deal with the problem; - it's going to be expensive. It's against the grain of all the anti-litigation measures which government otherwise says it wishes to encourage.

Even with the recent merger between HM Courts Service and The Tribunals Service, there are a limited number of venues and administrative staff to deal with such an increase. The number of ESA appeals has increased by a massive 167% from 2008 to 2010; - this is the first benefit which now sits on the first rung of the government's welfare reform ladder. At around 29 million claims to go through, there's enormous scope for further appeals on an unprecendented level.

Government has said far too little about the reduced rights it will be giving appellants to formally dispute decisions on overpayments. It unwisely proposes legislation which will see a form of compulsory reconsideration; - claimants will be expected to try and resolve their complaints before going to appeal. This will have a profound effect in further delaying claims and will serve no constructive purpose whatsoever unless people are helped by those with the knowledge to help put matters right. It is only with appropriate levels of help that claimants may be able to resolve their disputes without having to take them to Tribunal. Government should be very wary of simply making the process so complicated that it simply puts people off when it comes to challenging the state.

Government has put a great deal of emphasis on sanctions for non-compliance when it comes to the claimant, yet it has done little to convince any one that official error will be erradicated to any significant degree. It seems perverse to impose so many anti-claimant measures, whilst taking away all practical routes of appeal including access to professionals who could help claimants sort out the issues which without doubt will arise; - it's short-sighted and socially irresponsible to pay only lip service to the rights of claimants to contest the state.





Read more: mylegal.org.uk/index.cgi?board=frontline&action=display&thread=405&page=2#ixzz1Vl7PH3Jl

[nickd]

(53) Continued...

So are Government's plans on welfare reform simply hot air?


(Part 7) The million dollar question





But can Government's answer it?


How long is a piece of string?

The inherent problem with this one is the sheer number of unknowns. Government has announced all of its predicted savings on the basis of the great unknown and in many ways the unquantifiable. Let's look at it section by section.

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Predicted savings

In the comprehensive spending review, George Osborne predicted savings of £7 billion on the welfare bill by 2015.

But let's see what we can make of some of the figures which have been flying around, I'll break them down into the relevant sections.

____________________________________________________


Welfare to work


This area has to be the greatest unknown of them all. It's apparent that the chancellor and the welfare minister are at loggerheads. In June 2010 as part of his budget speech, predicted savings of £11 billion in the welfare bill by 2015. The Economist refer to deal broking between the two:

"After tense haggling a deal seemed to have been struck over the summer. Mr Duncan Smith could have his reform, at a cost of £3 billion a year, provided that, as well as the £11 billion of welfare cuts already announced, his department contributed £10 billion of net savings in 2014-15."

www.economist.com/node/17103794

It's not even fully clear how much government intends to save, let alone spend. But it seems the welfare minister has a £3 billion cheque book as far as his measures go; - but he's got a lot to deliver in return.

Earlier in this article, I drew attention to how welfare to work was going to cost between £0.3bn and £3bn. Other reports contained within this article put it at £7bn.

The launch of the Work programme in June 2011 puts the figure at £5bn; -

"Many of the roles will be created in private companies including security firm G4S, A4E and Serco, with the total value over the contracts likely to be between £3bn and £5bn"

www.epolitix.com/latestnews/article-detail/newsarticle/welfare-to-work-scheme-launched-1/

Read what the DWP 'Work' prospectus says
www.dwp.gov.uk/docs/work-programme-prospectus.pdf

DWP press release (£3-£5n)
www.dwp.gov.uk/newsroom/press-releases/2011/jun-2011/dwp062-11.shtml

Hear the Select Committee and all their doubts
www.youtube.com/watch?v=GhbQE6qY3nA&feature=player_embedded

It has been reported that welfare to work providers are to be paid sums of between £2,000 and £14,000 per person to get them back into work. The numbers of those claimants being helped by providers varies according to the source of the information. The DWP put it at 2.5million claimants over 5 years.

Using my previous estimates and applying 'graded' payments, the cost could be as follows:

If it is assumed that 25% of all claimants were regarded as the 'least' difficult, there would be 475,000.00 cases payable at say £2,000 per case. The total cost to the state would be £950,000,000.00 in fees payable to welfare to work providers.

Assuming 10% of all cases are the most 'difficult', there would be 190,000.00 cases at the higher provider payment of £14,000 and this would cost cost us all a huge figure of £2,660,000,000.00; - a very significant sum.

Looking at the remaining 65% of all these claimants and assume they are 'moderately average' and attract a provider fee of let's say £5,000 per case. Now the claimant count would be 1,235,000.00 cases and the total amount in provider fees would amount to a massive £6,175,000,000.00; - a massive sum of money.

The total sum could be as high as £9,785,000,000.00.

[the above figures are based on 1.9 million IB cases as per the 2010 IFS figures; - all of which have to be transferred to ESA]

So who's right?

I would suggest there will transpire to be a difference of opinion between Government and welfare to work providers. A report released in June 2011 'Opening Up Work For All' and produced by the Centre for Economic & Social Inclusion outlines what is probably the most responsible approach to recognising the problems of long term welfare to work dependancy and transition in to the workplace.

The same report refers to a further paper 'Inclusion' and states how 2.7 million 'starts' could be introduced in to the Work programme by 2014; it goes on to state:

This chart shows the predicted very large proportion of customers who will have previously claimed ESA or IB. Many of these customers will have longstanding health problems. For example in the research on Pathways to Work, the majority of customers had had their health condition for over five years (Sejersen et al, 2009). The ESA evaluation found health to be by far the largest barrier to work for ESA customers, and this applies to the ‘fit for work’ group as well as other customers: nearly half (46 per cent) of the fit for work group identified their health
as the main barrier to work, far higher than other barriers (Barnes et al, 2010).

The report refers to problems of incorrect assessment and could be indicative of a perception by welfare to work providers over the identification of larger numbers of potential recipients than the Government is prepared to pay for. Doubts have already been raised which reflect a view that up to 90% of W2W contracts could fail in meeting their contracts. The W2W forecasts suggest it is more appropriate to work on the basis of a higher recipient figure than the DWP seem to have allocated in their £3 predicted expenditure.

What is clear is the W2W providers must do significantly better than A4E and Reed did when delivering contracts under the Flexible New Deal scheme. A public accounts committee hauled them over the coals for their low figures on actual delivery against set targets.

Read the report:
indusdelta.co.uk/sites/indusdelta.co.uk/files/assessment_final.pdf

Perhaps, it's better to apply some government predicted figures by using the 900,000 claimants which government believe will fall into the ESA WRAG group by 2015 (as per their ESA impact assessment on the 1 year limiting); - it's what they predict of their own figures. But how would it translate into welfare to work provider payments?

Out of the 900,000 group

Assume 10% result in a provider payment of £14,000 per person (most difficult cases) = 90,000.00 X £14,000 = £1,260,000,000.00

Assume 90% result in a provider payment of £5,000 per person (moderate case) = 810,000.00 X £5,000 = £4,050,000,000.00

Making a total of £5,310,000,000.00 (£5.3 billion in W2W payments)

In my view this could be an underestimate as all claimants are in the WRAG group and providers may say they are therefore more 'difficult'; - they would attempt to justify a higher fee.

The other problem with this it includes none of the 3.1 million DLA claimants who will be reassessed as part of the PIP transfers; - it could considerably increase the provider payments. It should not be forgotten that all DLA claimants qualify because they have a severe disability. You have to assume some will fall into the welfare to work groups.

The unknowns are the pace & timetable, the numbers found to have limitation and the number of appeals which lead to overturned decisions. Another unknown factor is the 'grading' of welfare to work provider payments; - they need to explain how they will identify a difficult case as distinct from a relatively straightforward case.

The true figure on welfare to work costings could be anything between £5.3 and £9.7 billion pounds; - far in excess of the lowest estimate at £0.3 billion.

____________________________________________________


DWP/HMRC administrative costs


It's not quantified as to exactly how much the actual administration side of this will cost, it tends to be broken down on each individual impact assessment. However, what we know is that Government wants to implement Universal Credit as soon as it can. There are 18.4 million claims to merge and even at a basic 'administrative' charge of say this still accounts for a considerable sum; 18,400,000 X £25 = £460,000,000.

On top of which you could apply the same to the 3,100,000 DLA claims which are to be transferred over to Personal Independence Payment; 3,100,000 X £25 = £77,500,000

The IB to ESA's are more quantifiable because they are underway. The impact assessment on ending the ESA claims periods after 1 year for those on contribution based ESA mentions a 'recurring' cost of £30,000,0000 in dealing with the transfers, but this only deals with these cases.

I've already set out why this figures should not be accepted as the rate of pace in reviewing shows that the DWP are targeted at processing IB to ESA cases at the rate of 10,000 cases per week which from February 2011 (when the roll out of reviews commenced) until March 2015 (which is reasonable as government will need to show significant progress before next Parliament) is over the 54 month period - 54 months X 40,000 cases per month = 2,160,000 cases by March 2015 which fits more in line with Government's targets to review all IB cases, I'm not convinced it allows for new ESA claims but in dealing with these 2,160,000 cases the administrative cost would add a further 2,160,000 X £25 = £54,000,000. (these are over and above Universal Credit cases as they form a separate type of review).

I leave aside an in depth analysis of the Child Benefit reviews and other benefits for now. Although I am mindful that the chancellor proposes making savings of £2.5 billion in this area.

A DWP report [ The Pension, Disability & Carers Annual Report 2010/2011 dated July 2011 states:

" We have faced a challenging twelve months; focusing on areas where we could make savings while not affecting our ability to make a real difference to people’s lives. In 2010/11 the total
funding made available for administering pensions, benefits and entitlements to our customers was £841.8 million. This funding helped us deliver £100.2 billion in benefits and entitlements.
These accounts report on the costs of paying these
benefits and entitlements."

Which effectively means that to deliver benefit payments of £100.2 billion, the administrative cost was £841.8 million. For every £10.20 paid in benefits it costs around £84p to deliver them; but how inclusive is this cost? www.official-documents.gov.uk/document/hc1012/hc11/1128/1128.pdf

Using the DWP Pension, Disability and Carer's report we know that the claimant count is 16 million which costs £100.2 Billion. (£100,200,000,000.00) divided by 16,000,000.00 (16 M) = £6,262.50 per person. We also know that the admin costs run at £841,800,000 Million which is 0.85% of 1% (approx) of the £100.2billion overall cost.

If the £6,265.50 per person is divided by the 0.85% the admin costs run at £53.23 per case. This would need to be applied to the larger figure of claimants subject to welfare reform review, this being all those reviewed for the Universal Credit (around 18M) 3.1 M for PIP and then the 1.9 to 2.4 IB/ESA cases at £53.23 per case. This could arguably be applied as follows:

18,000,000 Universal Credits cases + 3,100,000 DLA to PIP cases + 2,400,000 IB/ESA cases = 23,500,000 (23.5 Million)total @ £53.23 per case = £1,250,934,375.00 (£1.25 Billion). This would represent an average figures using the DWP's own cost estimates applied accross disability, pension and carer's cases, it does not seem unreasonable to assume it applies accross all cases.

However, if we verge on the lower side for administrative costs alone, at a basic minimum expense of say £25 per case, this amounts to £591,500,000. This is of course dependent on how many cases the DWP, LA's and HMRC can physically process, as well as what their administrative costs actually amount to amounts to. It should be borne in mind that the admin work involved in a new benefit case is likely to be considerably more than the routine processing of a pre-exisiting claim.

The admin figures could range from £0.6 billion to £1.25 billion, although it completely depends on the level of work involved and the numbers of cases reviewed by 2015.

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Fraud & Error

Lord Freud has committed £425,000 to this in his DWP/HMRC 'Fraud & Error' report of 2010.

But did he factor in the 200 extra fraud officers in the impact assessment relating to the single fraud service? Did he factor in the 'Bounty Fees payable to firms like G4S when they catch all those benefit thieves out: - it doesn't seem like they've been included. The problem with fraud detection is you just can't quantify it, it's only when people are caught and admit of are convicted of a fraud that you can safely label them a fraud statistic; - it's an area where the actual evidence shows fraud has been reduced and in 2010 stood at 0.85% of just 1%; - anything over and above is pure supposition.

It is probably here where the chancellor and welfare minister are at loggerheads. IDS wants to press on with welfare to work and Osborne wants him to deliver more savings. Fraud is an area where you can't really commit money to an evidence basis which shows a very low number of actual fraud cases. Around half a billion is already committed on the spend by Lord Freud, but is the hope that private fraud busters will deliver more by using IT as a means of cross reference between say the electoral roll, NHS records, credit reference agencies; - I rather suspect it is. Even loyalty cards can potentially be used to track whether expenditure matches a 'sole claimant' case. It may be see as an as an infringement on the rights of an individual, but that can be over-ridden in cases where fraud is suspected.

What of weekly benefit subsidies paid to LA's for the detection of fraud? - they have to be paid out by the exchequer. The IT costs are likely to be increased within the DWP/HMRC/LA's but this is where private contractors may say they already have the infrastructure; - but they'll want paying for it.

The following link shows the emphasis upon private fraud detection and states between £17 Billion and £25 billion can be saved with the DWP; - little is said of the cost except a reference to a cost to saving ratio of 1 in 10. At £25 billion this would put costs at £2.5 billion. The report outlines the measures which the fraud taskforce will take and continually outlines how much they could save, with little mention of any cost structure. The measures suggested are unlikely to attract public support as they are likely to seen as too intrusive and have the potential to impact many people and seen as the adoption of 'big brother' tactics. Read the report...(public sector fraud taskforce)

www.attorneygeneral.gov.uk/nfa/WhatAreWeSaying/Documents/Smarter%20Government%20Public%20Sector%20Fraud%20Taskforce.pdf

I think it reasonable to suggest fraud and error measures will cost far more than £425 million; - at least a billion seems to be a bare minimum and potentially will be far more if full implementation is made of all the measures contained within the taskforce report. Again, it is the cost of 'payment by result' private contractors which is not included in the equation; - the fact remains that the costs will have to be included at some stage and therefore fall to be deducted from treasury savings.

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Appeals

Again unknown numbers make it impossible to quantify cost. However, the impact assessment relating to the implementation of the cessation of contribution based ESA after 12 months makes it clear that £30 million is set aside to deal with the 'recurring' costs of the DWP dealing with the additional workload of appeals. It's fairly safe to use the 2010/2011 appeal numbers and base an estimate of appeal related costs upon them. Using these figures enables a cost of around £150 per case to be identified as the appeal related 'administrative' cost which is born by the DWP; - similarly, it could equally be applied to the HMRC and Local Authorities.

The £150 would cover the cost of dealing with preparing the case against the appealant, issuing decision letters, processing appeals to the Tribunals Service and writing appeal submissions often running to many handreds of pages when evidence is included, in addition to which the cost of sending a presenting officer to the Tribunal needs to be included. Where a representative acts for the appellant, papers will need to be sent to them as well.

If the 2010/2011 Social Security appeal statistics are used as a likely minimum basis for estimating the folllowing figures are arrived at:

[Using 2010/2011 appeal receipts and applying the same set of figures for each year up to 2015 @ £150 per case for Appeal related costs]

2010/2011 418,500 £150.00 £62,775,000.00
2011/2012 418,500 £150.00 £62,775,000.00
2012/2013 418,500 £150.00 £62,775,000.00
2013/2014 418,500 £150.00 £62,775,000.00
2014/2015 418,500 £150.00 £62,775,000.00

A total number of 2.092,500 appeal receipts at £150 per case for these admin costs would total £313,875,000.00

NOTEThe costs associated with appeal administration are presumed to be 'inter-departmental'. This is an area which lacks clarity as with all government departments there are defined budgets for each department and ministers are obviously keen to work within 'their' budget rather than overlap with another department's costings. The question this raises is how 'inclusive' the appeals costs are? I cannot see how the sum of £150 would cover the full cost of an appeal, there are bound to be separate costs carried by HM Courts & Tribunals Service which fall within the Ministry of Justice budget. There is also a budget division between the Chancellor's budget within HMRC and the budget relating to Works & Pensions.

So what of the actual tribunal costs? These are the costs associated with running and maintaining the entire social security Tribunal 'estate' (not including other Tribunals it deals with such as Employment cases). These include the operational costs of arranging hearings, administration, dealing with the parties, arranging differently constitued panels with judges, medical members, disability panel members, clerks, photocopying, telephone and letter writing; - not forgetting the inclusion of IT to ensure the Tribunals Service can cope with the workload. There is also the cost of running a national service with renting premises to provide suitable venues, some of which are being heard in County Courts. There will also be a cost associated with processing appeals to the Upper Tribunals, setting aside decisions, providing statements of reasons and issuing case management directions on interlocutory referral. A further cost is the expenses paid to witnesses, panel members and appellants.

I cannot see a quantified cost but £350 per case (making a total of £500 per appeal when DWP/HMRC and LA costs are included) does not seem unreasonable.

At £350 per case the folllowing costs are incurred (again using 2010/2011 appeal receipt statistics:

2010/2011 418,500 £350.00 £146,475,000.00
2011/2012 418,500 £350.00 £146,475,000.00
2012/2013 418,500 £350.00 £146,475,000.00
2013/2014 418,500 £350.00 £146,475,000.00
2014/2015 418,500 £350.00 £146,475,000.00

A total number of 2.092,500 appeal receipts at £350 per case for these Tribunal costs would total £732,375,000.00

A total number of 2.092,500 appeal receipts at a combination of the £150 DWP admin costs + £350 per case for the Tribunal costs would total £1,046,250,000.00 by 2015.

See below:

2010/2011 418,500 £500.00 £209,250,000.00
2011/2012 418,500 £500.00 £209,250,000.00
2012/2013 418,500 £500.00 £209,250,000.00
2013/2014 418,500 £500.00 £209,250,000.00
2014/2015 418,500 £500.00 £209,250,000.00

But what if the number of appeals soar even further, as I worked out they may in my earlier post at (53 Part 6); - what if the number doubled, as some predict they will, what kind of a an impact on cost would there be if there were 919,628 appeals per year?

Here's what it would mean...

A phenominal increase in numbers and cost

2010/2011- 919,628 @ £500.00 = £459,814,000.00
2011/2012- 919,628 @ £500.00 = £459,814,000.00
2012/2013 -919,628 @ £500.00 = £459,814,000.00
2013/2014- 919,628 @ £500.00 = £459,814,000.00
2014/2015 -919,628 @ £500.00 = £459,814,000.00

It would mean a huge number of appeals of around 4,598,140(4.5 Million Case by 2015) at the cost of £2,299,070,000 by 2015 (£2.3 Billion).

NOTE I do not think Government can dismiss amounts like this as they have no control over the numbers who can appeal and they are worked out accross the board to cover the full range of social security appeals. We've seen uprecendented increases in the numbers of appeals already and the trend is obviously going to be upwards.

What government has not done is set out a clear timetable to its decision-makers on how other benefits can impact upon others, I have already given examples of how an adverse ESA finding could bring a claimant's DLA into question, which in turn could impact upon their Housing & Council Tax Benefit and say Carer's Allowance.

Plus, if there is the pronounced emphasis on fraud & error detection on the scales indicated by the taskforce, a whole wave of appeals could be generated on the back of them, people are much more likely to appeal when overpayment related decisions are made. New laws on limited right of appeal (as in the welfare reforms) won't extend to retrospective removal of a claimant's benefit; - they will retain a right of appeal.

However, there does the time when the numbers of appeals has to be determined by capacity within the infrastructure to deal with it. You could end up with a situation where you have huge numbers of appellants insisting upon an appeal, but a Tribunals Service which can only deal with around half the numbers they are presented with.

Moves to introduce compulsory reconsideration (as set out in the reforms) will only add to the time taken to process appeals; - this will only serve as having a constructive purpose if there is a genuine attempt to reconcile the differences between the state and the appellant. It will only get worse if all avenues of help are withdrawn.

It could well present the authorities with a situation which is far worse than the tax credit overpayment calamity ever was, that involved claimants of much smaller numbers by comparison and where claimants did not have the same rights of appeals which they will have in these cases.

____________________________________________________


The ATOS cost

Again, there is a distinct lack of transparency over the true cost. The ATOS contract is purported to be worth around £100 million a year, but is this accurate and up to date?

I doubt it unless ATOS are prepared to take on the cost of many more medical assessments for the same contract value. We know from post number ( ) that the cost of an ATOS ESA medical is £35.16 and a DLA medical £51.37 (non-domicillary). .

We know that the ATOS contract cost is variable. From 1st September 2005 to March 2006 it was £73.3 Million, 2006-07 was
£60.2 Million, 2007-08 - £70.2 Million, 2008-09 - £111.8 Million, 2009-10 it was £99.1 Million. The cost incurred in 2010-11 to 30 November 2010 was £69.6 million. [Not complete in year terms as given prior to year end]

See: Hansard/- Chris Grayling.
www.publications.parliament.uk/pa....110216w0002.htm

Again it's the unknown but we do know that there were around 2.4 miilion IB/ESA's (1.9M IB and 0.5M ESA in 2010 according to IFS) and 3.1 M DLA recipients; the majority of which will need to be tested at some stage before next parliament (if they are to implement PIP and go through the ESA caseload. But remember this doesn't include new cases of those being reviewed after initial assessment.

Here's how the costings work out:

IB/ESA Claims - 2,400,000.00 @ £35.16 = £84,384,000.00
DLA Claims - 3,100,000.00 @ £51.37 = £159,247,000.00

Now the total may come to £243,631,000.00, but it needs to be borne in mind that this is just the examination cost. If ATOS were paid £118 Million for 2008/2009 you would get some idea of the total cost which will cover their staffing, premises and overheads. Bear in mind, the sum of £84 million covers 2.4 million claimants which is far more than ATOS would ever examine in a year.

The ATOS contract from 2010 to 2015 is likely to run at least £0.5 billion pounds and quite possibly more given the extra workload and lack of clarity over their operational costs.

____________________________________________________


IT implementation & training

Another unknown. However, a look at DWP business plan 2010 shows that from September 2010, £200M was committed to IT per year meaning that by 2015 expenditure would run to £1 billion, on tope of which we know from post ( ) that half a billion has been set aside for HMRC updating, which still leaves updating the Tribunals and no doubt extra investment by way of subsidies to LA's for exra investments. It's well known that the chancellor is reviewing these IT contracts and already the £200 milion contract with Fujitsu has been cancelled with talk of legal action for brach of contract.

It doesn't seem unreasonable to suggest a minimum figure of £1.7 billion pounds on IT and I'd suggest is will be a lot more.

____________________________________________________


Indirect Expense

By way of direct & indirect consequences, there are also a number of costs which need to be factored in; - after all they are chargeable to and incurred at the expense of the State. The ones which spring to mind are these/-


*NHS related


I've already shown how the NHS relate around £900,000 per year to the cost of looking after people who suffer illness as a result of being unable to keep themselves warm, a fair number of these will relate to older age claimants but younger people with disabilities will also suffer when benefits are cut. I addition to which many claimants facing adverse decision over their incapacity and disability related benefits will often visit their doctors to get medical evidence. Some will be prompted into seeing their doctors for the first time after realising the need to re-enage and to seek supporting evidence. An additional factor is the sheer amount of stress and anxiety which people suffer when facing the prospect of having their financiances turned up side down.

With around 2.4 M IB/ESA and 3.1M DLA claimants (total 5.5 million @ say £35 average cost each (including prescriptions, time, extra MED 3 certificates during assessment, reports and consultations ) it seems reasonable to apply the following figures
as a bare minimum over the period from up to 2015:

5,500,000.00 @ £35 = £192,500,000.00

To which around £10,000,000.00 per year could be added over the same period making £50,000,000.00.

Health related 'well being' costs to GP practices and the NHS could run to £242,000,000.00 to 2015.


*Crime & punishment


Referring to a scholarly report:

" Conviction rates are also slowly increasing in both the Magistrates’ Court and the Crown Court - although this is probably as much to do with improvements in detection and evidence management by the police and Crown Prosecution Service as it is to do with anything changes taking place in the courts.

In terms of cost, which is an important consideration given that both courts are funded from public taxation, the Magistrates’ Court is far cheaper to run than its more senior cousin. Whereas a not guilty plea in the Magistrates’ Court costs on average £1500, a not guilty plea in the Crown Court costs an average £13500. That said of course, this is to some extent an unfair comparison given that Crown Court cases are typically more substantial and complex than those heard in the Magistrates’ Court.

Both the Magistrates’ Court and the Crown Court have implemented administrative reforms and policies in recent years designed to reduce the proportion of ineffective trials. These are cases in which the trial does not go ahead due to action or inaction by one or more of the prosecution, the defence or the court. In the year 2004/5 the ineffective trial rate was approximately 15 per cent, as opposed to approximately 20 per cent in 2003/4."

Link: www.law-essays-uk.com/resources/free-essays/magistrates-court-crown-court.php

Thus some idea of the cost is obtained; around £1,500 for a guilty plea in the Magistrates' to a not guilty plea case cost £13,500 in the Crown Court. The numbers of cracked trials and acquitals should also be considered. Complex benefit fraud cases could cost considerably more.

The cost of CRB updating following conviction and police related investigation in joint DWP/HMRC cases also needs to be considered. Not to mention probation related cases and other expenses such as imprisonments in certain cases.

Government has put a considerable emphasis on benefit fraud and prosecution; - the costs could be very considerable indeed.

It's an unknown quantity, but the fraud taskforce are predicting, via private contractors and increased levels on detection by the DWP much higher levels of criminal prosection, some of which may be averted by cautioning offenders; - although all the emphasis is on Court as a deterent. With 29 million claims to go through and current levels of detected fraud running at less than 1%, a rise of up to 3% would appear to be within the 'goals' of the taskforce (arguably much higher given their estimated £17 - £25 billion savings). However if a figure of 2% was settled for against say 15 million claims (as not all would be complete by 2015) we would have the following cost:

15,000,000 cases - 2% of these = 300,000.00 @ £1,500 prosecution costs = £450,000,000.00. High cost trials and not guilty pleas are not accounted for in this figure so the total expense could be much higher.


*Consequential debt - rent arrears - mortgage arrears


As more people find their money is, for whatever reason, cut back as a result of welfare reform, there will be inevtiable consequences. Benefits represent someone's income either in total or as a partial contribution to supplement lower earnings.

The cost of living is continually on the rise with increases in inflation and higher utility bills. Unless claimants are phased into sufficiently well paid work, more and more families will be plunged further into poverty levels, the squeezed middle will be affected to with changes to Child Benefits.

It is inevitable that it will lead to some families being unable to meet their priority liabilities such as the rent, the mortgage, the council tax and gas & electric bills. There's an increasing expectation that more and more people will be able to utilise the internet to deal with inquiries and claiming benefits etc; - but it will of no use to them if they are unable to pay their phone bills or internet service providers.

Equally non-priority creditors such as loans, credit cards and pay day loan firms will find that payments cease as people become unable to pay what they owe.

It's not just the feclkess, it will effect hard working people who find themselves redundant (especially those in the public sector) for the first time. Unfortunately, it will end up in some people having to lose their homes or end up in Court because they can't meet the rent or the mortage.

It's a 'hidden' cost which you can't hide from, it needs to be addressed or else any savings will end up being negatated in another way. Government needs to pay more than lip service to the impact upon people who will find their finances adversely affected by welfare reform.

It's the banks, the mortgage companies, local councils and utility firms who end up not getting paid. It's hard to quantify but it is an undeniable expense which should be offset against any savings expectation.

Eric Pickles' secretary recently wrote to another Government minister and warned how £270 million estimated savings in welfare reform could be wiped out; here's an extract from the letter:

[Matthew Style

Private Secretary to the Prime Minister


Dear Matthew,


OVERALL BENEFIT CAP


"As we discussed, I am writing in advance on the meeting of the Quad tomorrow covering the issue of the Overall Benefits Cap. My Secretary of State is attending the meeting taking place on Council Tax Benefit and is also likely to raise these issues given the implications it has for DCLG policies.


As you know we support the principle of the Overall Benefits Cap on the grounds of fairness. It is not right that a household on benefit should receive more than the average working household. However the specific implementation of the Overall Benefits Cap could cause some very serious practical issues for DCLG priorities.


Firstly we are concerned that the savings from this measure, currently estimated ay £270m savings p.a from 2014-2015 does not take account of the additional costs to local authorities (through homelessness and temporary accommodation). In fact we think it is likely that the policy as it stands will generate a net cost. In addition Local Authorities will have to calculate and administer reduced Housing Benefit to keep within the cap and this will mean both demands on resource and difficult handling locally.

Secondly, we are worried about the impact of this measure on our ability to build social housing for families through the new affordable rent product. To fund new affordable housing development providers need to be able to charge rents of up to 80% of the market levels but the impact of the Overall Benefit Cap will prevent them from doing so in many areas greatly reducing their financial capacity. Initial analysis suggests that of the 56,000 new affordable rent units up to 23,000 could be lost. And reductions would disproportionately affect family homes rather than small flats. For example it would be extremely difficult to fund any 4 bed properties, so desperately needed, anywhere in the country - disproportionately impacting on families and therefore children."

From Nico Heslop
Private Secretary to Eric Pickles]

Read the full letter in the Guardian article..

www.guardian.co.uk/politics/2011/jul/02/full-text-letter-eric-pickles-welfare-reform

This alone negates savings by £270 million, on top of which there are all the other unquantified costs which I've referred to, again a figure of £0.5 billion seems to be a minimum, I suspect it's a lot more.

____________________________________________________


*Updating passporting on LH applications, prescriptions, court exemptions, stationary, advertising, leaflets, guidance

When ever reform is carried out there is the hidden cost of writing and publicising a whole new range of leaflets, running training seminars, updating legal aid applications and guidance manuals, television advertising, free prescription passporting needs to be ammended to show where there is an entitlement, it could all work out as prohibitively expensive.

How much?

I've been unable to find any specific reports which cover the cost in a direct and identifiable way. However, we are not talking hundred, nor thousands, but certainly millions. HMCS will need to reprint an entire stock of EX160 court frorms, the LSC will need to reprint and provide guidance on new legal aid passporting and then of course there are the leaflets, the adverts and so forth.

It's guesswork but around £250 Million seems a minimum. If I locate any reports to the contrary I will revise this figure.

____________________________________________________


* Phone systems


The DWP report I refer to above (Pensions, Disability & Carer's) processes 1.3 million phone calls every year, messages will need to be altered, call centres changed.

It has to be a considerable amount and again I think £250 Million
seems reasonable in the absence of any firm report.

____________________________________________________


* Advisory reports, committees, reports, politician's time


There has been an unprecedented number of reports, parliamentary sessions, select committees. They don't come cheap when you consider the amounts people are paid especially when you include all the responses to consultations.

Between £250 million and £0.5 billion I would guess and possibly more?

____________________________________________________


* Reactive expense by charities, campaigners

When you consider the amount of time umpteen disability charities, forums, advice agencies have put into this a sum of £250 million does not seem unreasonable.

You have to bear in mind the unquantifiable nature of some of these costings, it's the great unknown; - an inherent failure in these reforms are the sheer number of concealed costs.


____________________________________________________


All of which has to be considered against actual real time savings. Some of the forecasts may predict removing a claimant from say Employment & Support Allowance in the WRAG group. However, this would need to be offset by what they would otherwise claim in other benefits such as JSA, increased HB/CTB (due to losing their WRAG category, their entitlement would revert to maximum levels of HB/JSA if entitled to the income based variant.

Claimants 'set free' from the benefits system will only be able to contribute back to the state when their earnings are sufficient to pay National Insurance and Tax, it may take many years before low earners are therefore able to offer recoupment by way of how much they may have had paid out to them.

Similarly, benefit claimants incurring overpayments may only be able to pay back small amounts which take years to recover. Whilst Government may set itself higher recovery targets, they are only as effective as the income and assets of the individual concerned. The old adage 'you can't get blood out of a stone' applies to many overpayment cases.

[nickd]

(53) Continued...

So are Government's plans on welfare reform simply hot air?



(Part 8) And you know who it is who'll be paying the bill?





I'm afraid so


Here's your bill

____________________________________________________

* Provisional and subject to further checking


The at best version

[See previous posts for quantification]

For period up to 2015

Welfare to work - £3 Billion

DWP/HMRC/LA administration - £500 Million

Fraud & error - £425 Million

Appeals - £1 Billion

Atos healthcare (or other) - £500 Million

IT implementation - £1.7 Billion

Indirect expenses

NHS - £425 Million
Crime & Punishment - £450 Million
Consequential Debt - £500 Million
Pass-porting/Leaflets - £250 Million
Phone - £250 Million
Advisory - £250 Million
Reactive - £250 Million

Total (at best) = £9.5 Billion[/u]


____________________________________________________


The at worst version

Welfare to work - £9.7 Billion

DWP/HMRC/LA administration - £1.25 Billion

Fraud & error - £1 - Billion

Appeals - £2.3 Billion

Atos healthcare (or other) - £0.5 Billion +

IT implementation £1.7 Billion +

Indirect expenses

NHS - £425 Million +
Crime & Punishment - £450 Million +
Consequential Debt - £500 Million +
Pass-porting/Leaflets - £250 Million +
Phone - £250 Million +
Advisory - £250 Million +
Reactive - £250 Million +

Total (at worst) = £18.8 Billion

____________________________________________________


The cost of welfare reform could range from £9.5 Billion to £18.5 Billion by 2015.

* I have not used the £0.3 Billion figure initially quoted for welfare to work because it is is a figure which although, initially mooted, has now dissapeared in all of the welfare to work contract publications and reference points.

There is a huge gulf between the lower and upper range figures which can be attributed to the sheer number of unknowns. However, the estimates have been provided on the basis of including the 'hidden' costs associated with reform; - these are the figures which by and large have been ommited from parliamentary impact assessments. It stands to reason that if parliamant says there will be no impact upon the well being of individuals, there will be no assessment of consequential costs.

Equally, the same can be said where parliament has said there will be no impact upon the NFP/Voluntary sectors.

There clearly is an impact in a number of areas which has been ommitted from the costings because of inadequate impact assessment. It would for instance be unarguable to say that government can susbtantially increase the number of benefit fraud investigations (with a pronounced emphasis on prosecution) without adding in the cost of the extra work by the criminal courts.

* These figures are worked up to 2015 and are based on the at best and at worst case scenarios.

It seems reasonable to suggest that there will be an element of difference of opinion between government and the welfare to work providers, plus a great deal of departmental 'protection' of their own budgets. Indeed, some element of dispute is already emerging as it has been recently reported that 90% of welfare to work contractors may be unable to deliver their contracts. The question this raises is; - have they been allocated insufficient money to deliver what government promised?

Now as with all bills, they are open to analysis and some of you may say too much, or too little, has been estimated in particular areas. If you disagree with the assessments, then by all means have your say, tell me what you think.

But please try and look through the analysis and tell me where you think it is wrong.

What is absolutely clear is that there are serious doubts over the Comprehensive Spending Review's estimate that £7 billion will be saved by 2015, the figures simply don't add up.

[nickd]

Here on Mylegal





My conclusions are merely those from someone who works on the front line, so far we've been the unheard, indeed Government has so far failed to acknowledge that welfare benefits are sufficiently complex to require anything more than general help. The reality is that welfare benefits can be and often are extremely complicated, my hope is that someone may just listen to this from the perspective of someone who works with - but outside of - the system, benefit specialists are problem solvers who know the system and who have a much better overview perhaps than those who only have an academic, economic or political interest. It's a vain hope I know, but none the less my hope is this may be used by someone to help avert what I see as one almighty catastrophe.

Those in government need to stand back and say 'let's just and think about whether we have got this right'; I genuinely believe that many problems will arise in the course of implementing these reforms My overwhelming conclusion is, as things stand, the programme of welfare reform is simply not one which is heading us in the right direction.

I see the key problematic areas as follows:



Universal Credit


The Universal Credit is a step in the right direction, but it is completely wrong to sell it as a simple answer to what is essentially a very complex problem. No one should be under any illusion, the Universal Credit only partly merges six benefits into one. In the case of say Employment & Support Allowance, the credit will include the income based variant but not the contribution based version. You have to ask yourself why they aren't both included? The non inclusion of both points to problems in distinguishing the two and also the need to carry on means testing elements of the Universal Credit, so it can't be sold as a benefit which moves away from all the inherent problems of means testing either.

Universal Credit will require the identification and merging of around 18.4 million existing claims and upon completion there will still be many benefits which remain outside of the system. Council Tax Benefit isn't included and nor will the new Personal Independence Allowance be wrapped up in the new credit.

There were enormous problems when the HMRC brought in tax credits in 2003, we are dealing with many more claims with Universal Credit than we were back then. What's all the more worrying is how the DWP, HMRC and LA's has to successfully merge sustainable communication levels in order to make this work, as it stands there are problems with getting the right computer systems, staff are being cut back and legislation has yet to be implemented with guidance being issued, new stationary being printed and an awareness initiative launched. Staff also need to be trained, I think we're a long way off and a great deal of work still has to be done.

It would, in my view, be extremely unwise to promote the Universal Credit as a solution until everything is in place and shown to be working well before implementation. Simplification of a complex system is complex in itself, which increases the scope for adding in additional and unnecessary complexity.

Universal Credit is only a partial step which should not be over sold as a 'one benefit which merges all' solution, my own view is that the pace of implementation should not be dictated by hurried political agenda but sensibly introduced at a pace which allows problems to be identified and rectified before they become too problematic.

Universal Credit should only be seen as one of the many other measures needed to simplify the benefits system, it is not the singular solution to simplification.


Public Perception


There can be no doubt that any government's popularity can be dramatically boosted by being seen to be acting tough and clamping down on those who abuse the welfare state. To me this is probably the biggest single area where government has got it so badly wrong. It would be hard, if not impossible, for government ministers to distance themselves from the dreadful media distortion which has appeared in the populist tabloids. They have allowed their quotes to be used amongst what have clearly been shown to be distorted and sensational headlines.

The headlines which appeared in both the Daily Express and Mail, amongst others, were an appalling example of blatant misuse of statistics which have effectively demonized the genuinely disabled and those who have no alternative other than to turn to the welfare state. Government minister's apologies over these grossly distorted headlines were far too insignificant to attract any attention; - the damage was done by printing headlines which said of those claiming sickness and disability benefits; - 75% weren't entitled to them.

These headlines may on the one hand meet with approval by those who believe all they say, but the problem which arises is that people are simply being led to believe things which aren't true. So on the other hand what we will see is a disappointed readership (many of whom will be government's voting supporters) who will turn on government when they realise they are not delivering upon the headlines which have undoubtedly been used to court popularity.

Sensationalist tabloid headlines should never have become the tool upon which government relied when courting popularity; -for government will never be able to deliver upon the basis of information which has been shown to be factually inaccurate.


Ultimately, it is the responsibility of any government to promise only what it knows it can deliver. It has published a series of false promises to voters who will see government as letting them down by failing to deliver what they said they would.

Government should also be mindful that with at least 30 million people in the UK on at least one state benefit, it has effectively demonized a large percentage of the electorate. Government has done itself more harm than good by associating itself with these headlines, in the process they have alienated the disabled and their supporters, not to mention burdened themselves with having to prove they can get 75% of the 'fakers' back into work by 2015; - they have set themselves up for an almighty tall order.


Administrative practicality


It may seem at times throughout this article that I have been harsh on the DWP and HMRC, it's really not that any undue criticism has been aimed at their staff; - it's their lack of resources, proper equipment and consequential staff moral that I'm referring to. It's all very well government waving an accusing finger at these departments, but one has to accept that on the whole they do a pretty good job. They, like so many of us, also face great uncertainty over their own futures as job cuts hang over their departments like a black cloud. At a time when all we hear about on the television every evening is cut after cut, it is sheer lunacy to be thinking about cutting back on frontline staff within the Jobcentres and even to some centres all together.

Critiscism aside; - the irrefutable evidence is that official error is widespread and allows billions of pounds to be overpaid in benefits and tax credits, that's the evidence. It is simply unfair to blame it on the staff, when it is the system which is at fault.

How on earth can reducing the numbers of staff help?

If you were able to look down on the UK and imagine what it would be like to look at 60 million people, then you half that number and ask yourself this; for everyone of those 30 odd million people which you see, these departments will be responsible for at least one 'reformed' claim decision for each of those persons. Can you imagine the enormity of the task?

I base the 29 million estimate on the following figures from the 2010 IFS claimant count:

1.9M - Incapacity Benefit

3.1M - Disability Living Allowance

4.7M - Housing Benefit

2.4M - Working Tax Credit

5.7M - Child Tax Credit

1.8M - Income Support

7.7M - Child Benefit

1.4M - Jobseeker’s Allowance

½M - Employment & Support Allowance

A total of over 29 million claims - that's around half the UK population


Each one of these is subject to some kind of 'reform rework' which will require a fair amount of administrative work on the part of hard pressed departments who have already been condemned for failing to adequately deal with the enquiries they currently have to process, imagine what it will be like when they have to undertake all of this; - on top of the routine work associated with routine new, review and closure of claims?

What’s all the more puzzling is how with all the expected increase in administrative workload, the recently reduced HM Treasury reports show there will be a substantial drop in planned departmental expenditure limits for the DWP. The treasury tables show actual expenditure up to 2010/11, from then on the budget planning drops by a massive £3,900 million to 2011/12 and then each year it drops further. The following table shows you the administrative budget:

Works & Pensions

2006/07 - Out turn - £5,874 M
2007/08 - Out turn - £5,723 M
2008/09 - Out turn - £5,667 M
2009/10 - Out turn - £6,063 M
2010/11 - Out turn - £5,620 M
2011/12 - Planned - £1,720 M
2012/13 - Planned - £1,530 M
2013/14 - Planned - £1,310 M
2014/15 - Planned - £1,241 M

£3,900M Decrease from 2010/11 to 2011/12

Read more:http://mylegal.org.uk/index.cgi?board=frontline&action=display&thread=427#ixzz1WYep9st2

It simply makes no mistake to reduce the budget in this way, it may of course be another adjustment in the National Office of Statistics, but the over-riding and clear aim of the Treasury is to reduce expenditure, so there will be cuts somewhere.

A select committee dealing with the HMRC has already warned against further cuts; - is government heeding the advice?

Government in its impact assessments aimed at achieving £2 billion pounds from time limiting ESA claims to 12 months alone. has required them to set aside a one-off cost of changing the IT to facilitate the policy (£0.5m in 2011/12); with an additional recurring costs of closing contributory ESA claims and either starting or amending an income-related ESA claim for those who qualify (approximately £30m in 2014/15); and then recurring costs of processing possible extra appeals (up to £30m in 2014/15). At the very minimum £560,000 has to be deducted from the £2 billion savings. I would suggest Government has woefully underestimated the one off and recurring costs.

Unless adequate resources are available, there will be a continuation of the same degree of administrative problems which have been so heavily criticised of late, more unanswered calls, more incorrect advice and systemic failure will get worse, rather than better. In short it will be an administrative nightmare to sort out millions of claims on a shoe string budget. We will see far greater problems than we did when tax credits were first launched in a blaze of damaging publicity and public disapproval.

Read more:http://mylegal.org.uk/index.cgi?board=frontline&action=display&thread=405&page=3#ixzz1WYjPKuWA


Fraud & Error measures


Despite all the media hype that benefit fraud is rife with surveys saying 8 out of 10 people think someone on benefits is also on the fiddle, the truth is that that the evidence base simply doesn’t support the misleading myth portrayed with far too much regularity by the media.

Benefit fraud actually accounts for just 0.85% of 1% of the £190 billion pound benefit bill. Although it still costs us too much it is comparatively speaking a very acceptable figure, the greater problem is official error which leads to overpayments caused by an overly complex system and mistakes being made by those who administer the payments.

It therefore strikes me as astonishing that Lord Freud has introduced his fraud and error measures with such an overwhelming emphasis on the claimant. £425 million is being pumped in to what I would suggest will be far more fraud detection that clearing up of systematic error.

Civil rights campaigners will reel in horror at how cyber sleuthing privatised agencies will be called in to trawl data bases in an attempt to identify fraudulent claims, some of the methods they will use strike me as particularly intrusive especially when government otherwise pledges to reduce unacceptable numbers of cctv surveillance measures, it seems that when you sign up to benefits you forgo the right to privacy.

The concern is that those who are caught out will be those committing technical errors often as a result of being too confused as to which department they need to report a particular set of circumstances to. I rather suspect the real fraudsters will carry on getting away with it because there won’t be the money to track them in real terms, I see far more innocent people being threatened with sanctions as the result of using target focussed private contractors such as G4S who will be paid a bounty fee upon a successful find. Government has not firmly mapped out who will deal with the consequent and additional administration which arises, not to mention the additional drain this will put on the prosecution costs involved. The actual evidence base suggests fraud has come down over the years without the over use of data base trawling private eyes.

We have to ask ourselves if there is an over zealous expectation that greater savings will be found by the use of anti fraud measures aimed more that the claimant, when the money could be better spent on reducing departmental complexity which leads to claimant error arising in the first place.

Is government being too reactionary and trying to please those whose expectations have been raised by more damaging headlines rather than the evidence base? - I rather suspect it is, indeed I think there is a hidden expectation that billions will be saved in this way. I think the reality will be that innocent claimants will be sanctioned for technical errors whilst systematic official error remains undetected.


Welfare to work


I find it incomprehensible that government says it is ‘relaxed’ at paying private contractors sums of up to £14,000 just to get one person back to work. These schemes have all been tried before in various guises and the evidence suggests it is growth which stimulates employment rather than umpteen work creation programmes. The evidence base is that the contractors who tried this in the past failed to deliver, it was a public accounts committee led by Margaret Hodge who exposed the contractors for serious underperformance and now we see the same contactors being used in the new ‘Work’ programme.

Chris Grayling should be anything but relaxed, he should be distinctly nervous over whether the whole project will work. It doesn’t cut any ice to say these schemes are better because they are contracted upon a payment by results basis, it just means it’s buy now pay later, the fact is we al have to pay at some stage. It seems that this is an area where contractors are increasingly getting jittery; perhaps it is where they were led to believe there remuneration packages would be more substantial than they really are. Initial estimates came in at anything from £0.3 billion; then increased to £3 billion, now they talk of £5 billion with other estimates being as high as over £7 billion; - I would put it at over £9 billion. I note a more recent degree of nervousness by contractors, as it is now being reported that 90% of them believe they may not be able to deliver.

The problem goes back to all the media distortion, if the contractors were led to believe that 75% of the sick and incapacitated were ‘faking it’ then that’s what they would have based their figures on. I rather suspect government, knowing the true figures and huge numbers appealing questionable ESA assessments, based their figures on the facts rather than the headlines; - it’s why there is a budgetary discrepancy and the cynic in me tells me that government will look to balance the books by making cuts in other areas or trying to find more fraudsters than there really are


There are serious concerns over job creation as it is, the Work programme has to put people back to proper work or else the scheme fails. The work that people need to be transitioned back into has to be sustainable and long term in order to yield a return on government's vast investment. It is vital that the assessment processes correctly identifies the right claimants and those employers who really can constructively engage with those who government says can work in long term employment. It is also vital that government correctly identifies those who cannot, for whatever reason, work; - failure to do will place an unrealistic expectation upon the UK's increasingly limited labour market.


Appeals & disputes

The irrefutable evidence is that as a direct result of welfare reform, there is already a consequential increase in the number of appeals which come before our social security tribunals. The Tribunal service acknowledge the increase in their annual and quarterly reports, all of which I’ve referred to in the course of compiling this article. Employment & Support Allowance sits on the first rung of government’s welfare reform ladder; - we should look at the extremely significant increase of these particular appeals and how they have increased by an alarming 167% between 2008 and 2010 as an indicator of what is yet to come.

As government starts to overhaul more and more of the benefits which are subject to reform, the number of appeals is bound to increase substantially. Government would be extremely unwise to ignore how the Tribunals are already struggling to cope. In 2010/11 418,500 social security appeals were heard at a minimum cost of £116.7 million per year just for the Tribunal’s costs. The current figures represents only a the start, there are a further 1.9 million cases subject to ‘conversion’ from Incapacity Benefit over to Employment & Support Allowance as well as 3.1 million Disability Living Allowance reviews; - many of which would ideally have to be reviewed before implementation of the Personal Independence Payment. It is obviously going to get worse as government works its way through more and more benefits. You simply cannot ignore the composite effect of so radically reforming so many benefits, it could bring the Tribunals service to its knees with double the number of appeals which we are already seeing, the cost will be phenomenal but the major problem would be the sheer volume of the task; - it will be enormous and well beyond what our Tribunals can realistically deal with. I’ve already set out how we could potentially have a situation where we have close to one million cases which people want to bring before a Tribunal, you simply cannot deny people their right to have their cases heard and have to be able to accommodate them within a realistic timescale.

A further area of concern revolves around the profound lack of planning over which claim groups will be subject to review; this will be the determining effect over the number of appeals. The more reviews; - the higher the number of appeals there will be. Government says it plans to implement Universal Credit before the next parliament; it will be under pressure to do so in order to show it has delivered something as part of it’s much publicised welfare agenda. The consequences of not getting it right will ultimately work against Government if the introduction of Universal Credit becomes associated with even more administrative errors and delays. Lessons should be learned from the mistakes of the past when tax credits created a sea of overpayments not long after their introduction.

It remains to be seen how much an accurate assessment it is in terms of working out who will be entitled to the Personal Independence Payment; if it is anything like Employment & Support Allowance we can expect to see an absolute surge of appeals.

Government’s estimated targets on welfare savings seem to vary, according to the 2010 Comprehensive Spending Review it is £7 billion by next Parliament, elsewhere it is £11bn and £18bn according to a recent guardian article. If government isn’t clear on how much it expects to save, it will find it itself without clear structured targets which will leave departments wondering what benefit to cut next, we’ll have some people on the Universal Credit and many who are not, it’s an absolute recipe for confusion within the system and for an upsurge in the number of appeals.

Government may attempt to mitigate the prospect of a huge increase in appeals by saying it will introduce a compulsory form of reconsideration which a claimant will have to go through before they can appeal; these reforms also attempt to remove the right of a claimant to appeal; - these are measures which are destined to backfire on those who propose them. Government has to recognise that a right of appeal will still exist in a vast number of cases; regardless of the implementation of the Universal Credit. The proposed legislation seeks to remove the right of appeal in some overpayment cases; however, a right will still exist to dispute retrospective periods and issues concerning an appellant’s entitlement.

It concerns me greatly that government has paid so little attention to how the right of appeal could lead to anything from over 2 million to 4.5 million appeals; - the cost would be phenomenal, we are talking in terms of billions rather than millions. It could cost £2.3 billion by 2015; - it entirely depends on how many claimants appeal and which benefits government intends to target before next parliament. The lowest figure on tribunal costs alone (using current 2010/2011 figures) amounts to over £½ billion pounds.

It defies all logic to deny appellants an opportunity to seek advice from trained welfare benefit specialists; - largely funded by legal aid. If this source of help is removed we will have a situation where appellants are floundering with no access to fully trained staff who have an inherent familiarity with the system. I echo the case put forward by Justice for All in so far as an amendment to the Welfare Reform bill is concerned:

“Please support amendment 26 to ensure adequate welfare benefits advice is available as changes to the benefits system take effect.

The amendment reads:

Page 123, line 10 [Schedule 6], at end insert

‘No less than six months before the appointed day the Secretary of State shall publish a report on the access to welfare advice, including advice for those unable to use the internet, that will be available at the appointed day, and shall satisfy himself
on the basis of that report that provision is adequate to support migration to Universal Credit.’

Government’s radical changes to the benefits system will be undermined if they do not ensure adequate benefits advice is available to claimants during the transition.”

However, although I support the case put forward by Justice for All on this amendment, it is my belief that they have underestimated the sheer number of appeals which could clog up the system to a point where it becomes frozen in its effectiveness. The Justice for All case is built upon only a select number of benefits, principally the universal Credit, and therefore does not deal fully with the whole raft of other benefits being being reviewed by all the separate departments within the DWO/HMRC and LA’s. These department's will all be reviewing cases to meet their own internal targets; - the cumulative effect is a huge number of cases ending up subject to dispute. It is therefore in government’s interests to ensure it engages with the advice sector by making adequate provision for welfare benefit advice at specialist level. Government send out conflicting messages over complexity within the benefits system, one on the one hand it says it is too complex and needs multi billion pound investment to simply it; yet on the other, it says in its legal aid reform proposals that welfare benefit advice is not sufficiently complex to require anything more than general advice. This message is contrary to what the Prime Minister said when recognising the need for welfare benefit specialists when in support of the Autism Bill.

The abolition of welfare benefits advice within the legal aid sector will impact upon far more than the 138,000 cases it funded in 2009/10; I say this because the existence of a welfare benefit specialist within an advice unit has the effect of increasing the knowledge base within the general advice sector – if the resource is withdrawn, we will be faced with a situation where general advisers are only able to refer to limited information resources rather than call on the experience of ‘in-house’ professionals. A further dimension to this will be the loss of the invaluable contribution a suitably skilled specialist makes to better standards of decision-making by way of appeals to the upper tribunal chamber, participation in local stakeholder forums with LA’s/HMRC & DWP as well as attending tribunal user’s group meetings where tribunal procedure is regularly reviewed.

There are also cases where a specialist will be able to identify cases which lack merit and can be weeded out as unlikely to succeed at a tribunal. In my experience, a generalist adviser is far less likely to advise an appellant to withdraw an appeal because they will generally speaking have to rely on what their information base tells them, rather than advise upon an experienced overview of the prospects of success.

Appellants who are not properly prepared for their appeals will lead to hearings taking far longer with more time having to be taken in explaining everything to them in the unfamiliar settings of the tribunal room.

It is also widely recognised that the success or failure of government’s ‘work’ programme depends on the correct assessment of claimants in working out what level of support they require to help them, where appropriate, in their transition from welfare to work. The assessment is all too often portrayed as being dependant on what the healthcare professional says; - we should avoid any situation where assessment is dictated by target regimes aimed at feeding government with evidence to get itself ‘good headlines’.

There is also an inherent danger in relying on the findings of welfare to work contractors to grade claimants in the assessment, I say this because of the risk that providers may be tempted to up grade a claimant in order to achieve higher remuneration based on categorising them as a ‘difficult case; - thus enabling them to claim a higher fee.

Government has throughout promoted an intention towards those on welfare in advance of the evidenced based determination more properly made by judicial decision makers; - it is they who are best placed to make statutory decisions which confirm whether or not and at what level a claimant is able to claim support from the state.

With the prospect of so many appeals on the horizon it makes economic sense to ensure that appellants are adequately represented. Failure to recognise the significant effect which a growing number of appeals will have, could seriously jeopardise the smooth implementation of so many strands of welfare reform, not to mention damage governments credibility in being able to effectively manage the enormous task it has taken on. It seriously undermines government’s claim that it is being fair whilst paying little more than lip service to the role of justice within something as fundamental as an individual's social security.



Fiscal savings


Government has set about a programme of savings which it says is necessary to help with the reduction of fiscal deficit. Again, I see using distorted media headlines as a means of promoting its agenda as very problematic for government; - I say this because:

(A) There is an expectation amongst people that reductions in the welfare bill will be in the short, rather than the longer term.

(B) People are also being led to believe, through media promotion, that it will those who are long term welfare dependent who are the primary target for reduction.

In countering both of these expectations, I would say that government know only too well that welfare reform will be in the longer term and it therefore follows that reductions in spending will not be as the achievable as they say by 2015. I am confused as to how much government actually plans to save. The CSR is very clear that the sum is £7 billion by next Parliament. Since then there has been mention of different savings figures being as high as £18 billion. There is a lack of clarity over how much the sum is by 2015, government should be clearer in how much it intends to save.

On the second expectation, the fact is that the greatest savings which come out of the CSR as to be found in reducing ESA (contribution based claims) to 12 months and by reducing Child Benefit. In my view, the problem which arises is that it will be those who claim ESA for the first time or those who have worked to build up a contribution based entitlement who will suffer most.

The Child Benefit changes will affect more middle income bands than it will lower income long term welfare dependents; - this is the reality. I believe government will get a bad press when it transpires that their much promised hard hit will impact upon people who are more likely to be government supporters than it does those who have since been labelled the 'feral underclass'.

It is those with a work record and savings who stand to lose the most, claimants with no savings or excess income will be able to carry on claiming the income based Employment & Support Allowance indefinitely.

In short, government will not be seen to be delivering on its promises.

In so far as actual reduction in the deficit is concerned, I firmly believe government has massively underestimated its expenditure.

the cost of the Work programme is simply one which no one can quantify. There is no way of knowing how you will be able to get 1.9 million people on Incapacity Benefit off benefits and in to work. It's hopeless to set a high bar medical assessment such as there is for the work capability assessment used in ESA as a means of guaranteeing that you can get people in to work. If a claimant is incorrectly assessed and labelled as fit to work, it doesn't make them fit to work. This is where welfare to work providers may say that those they are being told are capable turn out to be incapable of work.

Government has based its costs on the first ESA claimant group, it has failed to comprehend how a huge number of Incapacity Benefit claimants have yet to go through wide-scale reassessment and has completely underestimated the problems it may encounter. I also think there has been a lack of consideration given to the numbers of new claimants who go down the ESA rather than JSA route when faced with an increasing numbers of redundancies.

I have set out what I think is a credible cost analysis which at best comes in at £9.5 billion and at worst could be as high as £18.8 billion. It is a far more credible estimate than the one originally put forward which put welfare to work costs at £0.3 billion in the programme prospectus.

This is what I think a reasonable cost analysis up to 2015:


On at best basis


Welfare to work - £3 Billion
DWP/HMRC/LA administration - £500 Million
Fraud & error - £425 Million
Appeals - £1 Billion
Atos healthcare (or other) - £500 Million
IT implementation - £1.7 Billion

Indirect expenses

NHS - £425 Million
Crime & Punishment - £450 Million
Consequential Debt - £500 Million
Pass-porting/Leaflets - £250 Million
Phone - £250 Million
Advisory - £250 Million
Reactive - £250 Million

Total (at best) = £9.5 Billion


On an at worst version

Welfare to work - £9.7 Billion

DWP/HMRC/LA administration - £1.25 Billion
Fraud & error - £1 - Billion
Appeals - £2.3 Billion
Atos healthcare (or other) - £0.5 Billion +
IT implementation £1.7 Billion +

Indirect expenses

NHS - £425 Million +
Crime & Punishment - £450 Million +
Consequential Debt - £500 Million +
Pass-porting/Leaflets - £250 Million +
Phone - £250 Million +
Advisory - £250 Million +
Reactive - £250 Million +

Total (at worst) = £18.8 Billion

The problem with the costing of welfare reform on this scale is the unknown. There are simply too many variables to be able to accurately predict expenditure, there is absolutely no way of knowing how many people will appeal adverse decisions, or how many people will end up getting prosecuted following intensive campaigns aimed at combatting fraud. If government is behind headlines which promote a viewpoint that 75% of claimants are faking their claims then presumably they are expecting to prosecute them through the courts.

Paying contractors by results carries with it the risk that they will look to find results at any cost, it may also force them in to a position where they fail, leading to further job cuts. Buy now pay later contacting doesn't mean you only need to worry about the costs later, they should be fully analyzed now. I just cannot see how this will be possible given the huge number of unknown quantities.

The full costs of welfare reform has to be met, presumably by getting people back to work; there will have to be an awful lot more evidence of viable and sustainable employment before government can realistically claim to be able to accommodate everyone in the workplace. There will be no financial return on the investment from welfare to work until such times as national insurance and income tax payments start flowing from the pay packet to the state's purse.


Government should not mislead the electorate into thinking that welfare savings will be achieved in the short term when it is all too apparent that this is a massive programme of reform which will only deliver, providing everything goes according to plan, in the longer term.

Government should conduct proper impact assessments to analyze where 'hidden' expense can be identified. Paying lip service to the needs of the disabled and denying all groups of claimants them their rights to dispute decisions of the state is not 'smart' thinking at all, it is a classic example of how these reforms fail to identify costs which will arise and for which expenditure will need to be built in.

On the current course, I see evidence that there will be any scope for deficit reduction out of these welfare reforms by 2015.

[nickd]

It's great to see this article get such good coverage. I am in the process of summarising the main points in the previous post and then will prepare a downloadable document with a key point summary for people to lobby parliamentarians and so forth, I really hope you can use it to good effect.

If anyone has any particular comments which they'd like to be included or which they feel may have been omitted then please let me know either through the message box or leaving a post on here.

Many thanks

[nickd]

To update summary deficit reductions and key points download

[johnnybegood]

A very welcome development in preventing some of the damage being caused by the Welfare Reform Car Crash -

The Liberal Democrat party have just voted in favour of a Motion about ESA/WCA - proposed by George Potter of Lib Dem Youth, as well as an amendment (which strengthens it)!!

www.bbc.co.uk/iplayer/episode/b014w0hh/Liberal_Democrats_Conference_2011_17_09_2011/


Go to about 1:54 on the timescale for the Motion speeches

[nickd]

Fantastic!! I've got a good reason to be chuffed about this Johnny :-)

[jman]

Caring, sharing, we're all in it together UK today. Strangely this story does not appear to be on the BBC (or the "News presenters and editors want the 50p rate cut and won't stop going on about it channel"-why is that?)

" Terminally ill patients told their benefits may be cutCampaigners and charities criticise government for sending out letters about welfare reform bill, which has not yet been passed

Patrick Butler and Stephen Bates guardian.co.uk, Wednesday 21 September 2011 12.48 BST Article history

A Department for Work and Pensions spokesman said working could give terminally ill people 'a sense of being useful'.

The government has clashed with disability campaigners and health charities after warning seriously ill patients that their benefits may be cut from next April if its welfare reform bill, which has not yet passed all its parliamentary stages, is enacted later this year.

The Department for Work and Pensions (DWP) is sending letters to claimants saying the contributory employment support allowance (ESA) will be time-limited to one year for people deemed capable of returning to employment, meaning those already receiving the benefit could lose their financial help in six months' time.

The provision is included in the bill, which has still to go to the House of Lords for scrutiny. Campaigners believe there is a chance that plans to time-limit ESA may still be scrapped, particularly after Liberal Democrat delegates voted against the imposition of time limits at their party conference earlier this week.

The chief executive of Macmillan Cancer Support, Ciarán Devane, accused the government of behaving as if the welfare reform bill had been already passed.

"[The] Lords will no doubt be angry that claimants are being told they could lose their benefits before they have had the opportunity to debate the proposals in detail.

"The letters will cause a great deal of distress to thousands of cancer patients and their families who will be left wondering whether their vital financial support will be taken away or not. We will continue to urge the government to think again."

Neil Coyle, director of policy for the Disability Alliance charity, said the impact of cutting support would be particularly devastating for people with a terminal illness who have been told they only have a limited time left to live. "Many will have worked for years and will feel they deserve a little support in return until they pass away."................."



www.guardian.co.uk/politics/2011/sep/21/terminally-ill-told-benefits-cut?commentpage=7#start-of-comments

[nickd]

Well, well, look what I spotted with Mylegal eye? An article in the Telegraph mentioning a 'welfare reform train crash' - not dissimilar to my prediction over a resultant 'car crash'.

Who cares, car crash, train crash, just so long as someone puts the brake on this nonsense! I'd love to know where they got all their information from.


Here's the article..


"Universal Credit has been moved to the top of George Osborne's warning list of projects that could fail and threaten the Coalition"






"George Osborne is warned of disaster over welfare reforms"

Flapship reforms of the welfare system are in serious danger of arriving late and billions of pounds over budget, or even failing altogether, Treasury officials have told ministers.[/i]

Universal Credit has been moved to the top of George Osborne's warning list of projects that could fail and threaten the Coalition

By James Kirkup, Political Correspondent10:00PM BST 25 Sept


The Daily Telegraph has learnt that Universal Credit — the Government’s answer to simplifying the benefits system — has been moved to the top of George Osborne’s warning list of projects that could fail and threaten the Coalition.

A team of senior Whitehall officials and industry experts has been assigned to investigate the development of the single payment, which is due to replace several different benefits in 2013.

Concerns centre on the ability of HM Revenue and Customs, which will have a central role in delivering Universal Credit, to meet its deadlines. HMRC chiefs are understood to have privately told ministers of their concerns about the timetable.

Universal Credit, the brainchild of Iain Duncan Smith, the Work and Pensions Secretary, is the centrepiece of the Government’s welfare reform agenda and is vital to David Cameron’s political and economic strategy. It will replace benefits including Income Support, Jobseeker’s Allowance, Employment and Support Allowance, Housing Benefit, Child Tax Credit and Working Tax Credit.

Ministers say a simpler benefits system will help cut down on the £5 billion a year wrongly paid out through fraud and error. Universal Credit is also intended to encourage claimants to work, by allowing them to keep more of their benefits when they start to earn. But Mr Osborne, the Chancellor who is also head of Conservative election strategy, is said to have become concerned about the plans as part of efforts to identify policy that could go wrong and threaten his party’s prospects.

The fears within Whitehall echo alarm already expressed by independent observers. The National Audit Office has warned that the welfare reform programme faces major risks. The chairman of the Commons public accounts committee has called the plan “a train crash waiting to happen”.

As part of its work monitoring public spending, the Treasury maintains a “risk register” of Whitehall programmes, based on its assessment of the chance that they will overspend, be delayed or fail entirely.

For most of the Coalition’s time in office, the Treasury identified the management of major Ministry of Defence projects as the biggest financial risk.

But in a boost for Liam Fox, the Defence Secretary, the Treasury now believes his plans to overhaul the management structures of the MoD and the Armed Forces have reduced those risks. A senior Government source said that the MoD’s place at the top of the list had recently been taken by the Department of Work and Pensions and the Universal Credit plan. “There is a lot of concern about this in the Treasury,” said the source. “This is causing real worries at the top.”

Universal Credit is being assessed by the Major Projects Authority, a team of officials and commercial experts from the Treasury and Cabinet Office. Much of the concern relates to information technology. Universal Credit will rely on up-to-date “real time” information tracking earnings, to be provided by a new HMRC computer system. Ministers want the real-time system in place by April 2013, to allow six months of testing before Universal Credit begins. Whitehall is well-known for its poor management of IT projects and MPs and industry experts have said that the timetable is unrealistically optimistic.

A senior DWP source said the department was confident it could deliver its side of the Universal Credit system on time. The department is employing a new “agile” management system, and Mr Duncan Smith is taking a daily interest in the project, the source said.

A Cabinet Office spokesman said the internal review of Universal Credit was part of “the correct management of major Government projects”.

www.telegraph.co.uk/news/politics/labour/8788299/George-Osborne-is-warned-of-disaster-over-welfare-reforms.html

Have a look at my bit on the Welfare Reform Car Crash; 47,000 have already had a peep!..

mylegal.org.uk/index.cgi?board=frontline&action=display&thread=405

[nickd]

concluding summary

[johnnybegood]

Ed Miliband was quizzed by disabled blogger and campaigner Kaliya Franklin, founder of the non-partisan “The Broken of Britain” campaign, about Welfare Reform and the way disabled peole have been portrayed as "Scroungers" It was during the “Ask Ed M” session of Labour party conference, in which members of the public were invited in to hall to question the Labour leader.

Please share far and wide!

www.leftfootforward.org/2011/09/ed-miliband-quizzed-on-disability-reforms-labour-party-conference/

Left Foot Forward link has transcript.


www.leftfootforward.org/2011/09/ed-miliband-quizzed-on-disability-reforms-labour-party-conference/

Also, if you go to wikio you can vote for the Left Foot Forward article and get it to the top of the Wikio news

www.wikio.co.uk/uk_politics?sort=2

It's currently number 4!

There is a little blue bird on the left hand side of the title -

Miliband quizzed on disability reforms, apologises for omission from speech.

Under the blue bird is a number - hover your mouse over the number and you'll see a PLUS sign - click on that to vote and get it to the top so that more people read it!!

[jman]

Disability Law Service has launched a JR of the welfare benefits legal aid cuts

"DLS Issues Legal Challenge Against the Government over the Legal Aid Bill

An application for permission for a claim for Judicial Review in the High Court against the Secretary of State for Justice has been issued by the Disability Law Service.

The Ministry of Justice is proposing far reaching reforms and cuts to Legal Aid as set out in the Legal Aid, Sentencing and Punishment of Offenders Bill, presented on 21st June 2011. The results of the Bill’s consultation were published on the same day.

Disability Law Service argues that the Secretary of State’s decision to cut Civil Legal Aid funding for Welfare Benefits is irrational, and that the consultation carried out by the Secretary of State was unlawful. Disability Law Service is also challenging the removal of Wills.

Disability Law Service contends that the consultation carried out by the Secretary of State did not fully consider the effect the proposed cuts would have on disabled people; the Secretary of State irrationally asserts that the negative impact of a loss of benefits for the disabled will be only financial, with no other subsequent social or personal impact. This clearly calls into question the validity of the consultation’s Equality Impact Assessments; to have due regard to the needs of those with disabilities as defined by the Equality Act 2010.

By removing Welfare Benefits from Legal Aid those individuals, who are the poorest and most vulnerable in society, will have little or no means by which to challenge unfair decisions and no recourse to get advice into what is one of the most convoluted and complex areas of law.

Sean Rivers, Social Welfare Solicitor at the Disability Law Service, said:

‘The consultation by the Secretary of State confirms that at least 58% of those who require advice for welfare benefits appeals are ill or disabled. The consultation confirms that’s only 3% of over 5000 responses to the consultation agreed with the government’s proposals. However the Secretary of State still intends to remove access to a fair hearing for disabled people. As almost every expert in the area of law disagrees with the government’s proposals we find that there is no other option than having this matter considered by the courts’

Linda Clarke, Director of the Disability Law Service, said:

The questionable validity of the consultation’s Impact Assessment and Equality Impact Assessments means that the Disability Law Service has no option but to issue Judicial Review. The quality of information provided to the Bill’s committee by the Secretary of State has to be fully compliant with their duty under the Equality Act. We are determined to protect the rights of disabled people.

For more information contact:

Sean Rivers
Solicitor, Social Welfare
Disability Law Service
39 - 45 Cavell Street
London E1 2BP
0207 791 9817

Email: [e-mail]

6 October 2011"


www.dls.org.uk/rights/News/2011/september/18.html

[jman]

The government is proposing that benefits will stay cut while people are appealing. Article in New Statesman

"Judged fit to work? You could lose your benefits if you appeal
Posted by Samira Shackle - 14 October 2011 09:09

The government could cut off incapacity payments if people challenge the ruling that they are fit to work.

Under new proposals, hundreds of thousands of people on incapacity benefits could be cut off from support if they challenge the ruling that they are fit to work.

In April, the government began a reassessment of the 1.6m people claiming sickness benefit, as part of a plan to reduce the annual £7bn incapacity bill.

The new Work Capability Assessment (WCA) has stricter criteria and finds many more people able to work. However, serious concerns have been raised about the reliability of the tests, run by French company Atos. Charities such as Mind, the MS Society, and Parkinson's UK have all raised concerns about a rigidity of questioning that does not take into account the range of problems that might prevent people from working.

As I reported in August last year, in Burnley, one of the areas where the WCA was piloted before being rolled out nationwide, a third of those declared fit for work appealed, and 40 per cent of them won.

This is a very high proportion, and indicates serious flaws with the WCA. Indeed, last year, the BBC reported on instances of people with serious illnesses such as Parkinson's being declared fit to work because of the inflexibility of the criteria.

Currently, those judged fit to work keep receiving their benefit while their appeal is being heard. However, under these new plans, claimants would lose these payments. If they are successful, they will be reimbursed in full. According to the Times (£), this is because ministers are concerned that continued payments are acting as an "incentive to appeal".................."

Rest at link below


www.newstatesman.com/blogs/the-staggers/2011/10/work-fit-appeal-ruling

[jman]

Here is the link to Justice for All on the loss of a 3rd of the nations debt and housing advice with the full report downloadable. Please get the message out to as many people, media and MPs and Lords as possible.

"A third of the country to lose homelessness advice
A third of the country to lose homelessness advice
A new Justice for All analysis suggests housing and debt advice under legal aid will not be available at all in a third of areas in England and Wales.

The new rules on legal aid – which in total would see 650,000 people losing help - mean so few cases will be covered that 30% of areas will not have a single adviser. This is despite government’s claim that they are retaining advice for those about to be made homeless.

This confirms the Government has given precious little thought to how the little help left over after already-drastic cuts will actually be delivered. By cutting frontline services rather than bureaucracy government will leave people across the country without advice to save their homes in emergency situations.

Government plans would limit housing and debt legal aid to the most desperate cases involving ‘immediate loss of home’, but advice agencies, often charities like Citizens Advice Bureaux, Shelter, or Law Centres, are struggling to see how they make administratively cumbersome legal aid contracts work for just the handful of remaining cases. Advice on employment or benefits issues, often the root cause of arrears and evictions, would be removed altogether from the scheme. Further plans to move the bulk of remaining advice to the phone means only a tiny number of people will get face-to-face help, which is often critical when a home is at risk.

Guidance from the soon-to-be scrapped Legal Services Commission, who administer the legal aid scheme, suggest full time advisers should take on between 250 and 300 cases each year. In 40 of 133 of the Commission’s ‘procurement’ areas government figures predict the combined number of face to face debt and housing cases will be less than 300.

Download the full briefing to see whether your area is affected

Don't forget to write to your MP if you haven't already, ahead of their last chance to vote on the Legal Aid Bill next week. Email Justice For AllJustice for All a coalition of charities, legal and advice agencies, politicians, trade unions, community groups and members of the public."

www.justice-for-all.org.uk/News/A-third-of-the-country-to-lose-homelessness-advice

[jman]

Justice for All have a video on why legal aid is needed for benefits appeals-see link below


www.justice-for-all.org.uk/News/legal-aid-benefit-appeals

[jman]

Ken Clarke and Jonathan Djanogly have constantly been saying that welfare benefits law is just general advice and therefore does not need to be funded by legal aid. They have never produced any evidence to support this supposition and it simply seems to be based on a prejudice-something along the lines of welfare benefits, that's for poor people isn't it, can't be that complicated then.

If you think that welfare benefits is simple and not law, just flick through a copy of the case law decisions from the Journal of Welfare benefits law-link below. People dealing with such cases may have learning difficulties, mental health problems or not speak English or be illiterate. Ken Clarke and Jonathan Djanogly and their teams at MOJ and those members who did not vote against the bill think that unimportant. In all these cases they can just represent themselves in the Tribunal, the Upper Tribunal, the Court of Appeal and the Supreme Court.


There really needs to be more of an effort to draw to the attention of Lords and MPs just what welfare benefits law is, otherwise the ignorance and arrogance of ministers will hold sway. If anyone wants to add to this thread with links to decisions and case law on welfare benefits cases, so that people coming on site can see what they actually involve, please add further posts to this thread. Link below


www.ardendavies.com/downloads/JournalofWelfareBenefitsLaw64.pdf