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Archive for the ‘Informal Economy’ Category

Partnership working and the importance of values

Tuesday, March 30th, 2010

Last week I was up in Manchester for Oxfam’s annual Country Leaning Review for their UK Poverty work. The day’s objectives were to:

  • Meet other Oxfam partners and hear about their work
  • Feed in to wider Oxfam’s thinking on developing strong and healthy partnerships
  • Review the quality of Oxfam’s partner relationships in England, and what we could do to improve them

The day started with (inevitably) a few presentations, from Single Parent Action Network, ourselves, Church Action on Poverty, and the Community Allowance, followed by some constructive discussions examining the relationships that Oxfam have, in terms of what works and what could be improved.

People fed back about what they liked about working with Oxfam…

  • Partners shared common values – a solid starting point for a partnership.
  • Oxfam provided flexible funding for its partners, which in some cases was used to leverage other monies into a project.
  • Association with the Oxfam brand can open doors and increase the profile of a partner and the project.
  • Oxfam can open up and gain access to networks where others cannot.
  • Coalition working was a strong factor with Oxfam.

And what could be improved…

  • Partners would like to be involved in participating in the development of Oxfam’s strategy in the UK.
  • Increased communications between the three work areas: race, gender and livelihoods.
  • Links with international partners to be able to share and learn.
  • Sharing learning in a structured approach.

In reflection the day highlighted the complex nature of partnerships and the continued effort that needs to go into them: constant nurture, development and communication over the long term – much like any relationship that you care about. Way too much emphasis is placed on the catch all term “partnership”, and I’m not going to get into that debate now. But I do know that I find them hard work and at times challenging, but when I work at them then they can be very rewarding.

For me the basis for any good partnership starts with shared values – if you can get that foundation in place then you’re half way there. In our partnership with Oxfam those values include a ground up approach to tackling poverty, building stronger communities, and taking a holistic approach to working with people and communities.

In the past we’ve worked with Oxfam on our Need NOT Greed campaign, the Community Allowance and most recently some work measuring the informal economy in Salford (the report will be published in the summer).

I hope to build our partnership with Oxfam, which is in its sixth year now, with many more projects to come.

The Young Person’s Guarantee and some hidden bits of the budget

Thursday, March 25th, 2010

Since everyone with any political interest whatsoever has commented on the budget in the last 24 hours, we thought it worth picking out a couple of the more hidden bits of good news. It’s no coincidence they’re also bits we’ve been involved in.

The first is some more detail on Social Impact Bonds (pg 101, box 6.2, if you’re feeling keen). The first pilot of this innovative new funding mechanism, which has been hugely influenced by our Co-founder David Robinson, was announced last week. In the budget, government announces the potential for some more work with Leeds and Bradford Councils. We hope the bond will develop into a powerful new way to fund social change, particularly the innovative preventative work that is currently so hard to fund.

Secondly is an update on the Hidden Economy Advisory Group (pg 80, 5.74), on which our Policy and Communications Manager Aaron Barbour has sat for the last few months. Although it doesn’t reveal many details, this budget report does highlight the lack of support for people – particularly those running small informal businesses like gardening or decorating – to move into the formal economy. The group will be looking at exactly how to provide this route in more detail over the next few months, and we look forward to being part of those discussions.

Finally, we’ll join many others in welcoming the extension of the Young Persons Guarantee. However, since it’s so new, it has got us wondering how well it’s working. The manager of our New Deal service gives a mixed review – it has certainly been valuable to some of the young people we work with, but its effectiveness – in terms of getting people into something useful – has varied dramatically depending on which Jobcentre the individuals are dealing with. This cuts to the heart of a problem we come across all the time – provision at a Jobcentre can vary from excellent to appalling, and there are very few ways to hold individual staff or centres to account.

We’ll be looking into both these issues – the effectiveness of the Young Person’s Guarantee, and the performance of Jobcentres – in the near future.

Let’s change the entire benefits system

Wednesday, March 17th, 2010

There are so many people who are entitled to benefits but don’t claim, either because they don’t know they are entitled, or because they find the system complicated and impenetrable.”
Jo, aged 27

There isn’t one policy I’d change about the benefit system. I’d change the whole thing. The UK’s benefit system is simply not working: for claimants, administrators and the tax payer. The system has mutated into a beast which is complex, confused, contradictory (in impact and intent), frequently changing, sometimes well, but at other times, poorly delivered, bureaucratic, non-strategic, not joined-up, and sometimes welcomed but mainly mistrusted. We cannot continue with more piecemeal, ‘tinkering at the edges’ type reforms but need a fundamental re-think.

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Employment rights are key to reducing in-work poverty

Monday, March 15th, 2010

Nicola Smith is a Senior Policy Officer at the TUC, who launched their Fair Work campaign last week.

The UK is currently moving out of the deepest recession since the Second World War. Hundreds of thousands of people have lost their jobs, and many remain at risk of long-term worklessness. Continued government support to help people move into work is vital.

But unemployment is not the only challenge facing post-recession Britain, as work itself is not always a route out of poverty: increasing proportions of working households have an income of below 60 per cent of median income (the Government’s preferred measure of poverty), and nearly half of poor children are in working families.

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Rich, famous, jobless, and not as bad as I expected

Wednesday, March 10th, 2010

Rich, famous, and jobless sounded awful – the worst kind of them-vs-us portrayal of poverty. When we were approached last year by the production company, asking if we’d help find unemployed people to feature, we turned them down. But the programme, shown over the last two days, has actually been quite impressive in illustrating some of the issues we come across every day.

In the first show the four ‘celebs’ (let’s be honest, we’d only ever heard of Larry Lamb), were given 4 days of Jobseekers Allowance (about £35), and told to find a job. In an incredibly artificial situation – followed by a camera and with only 4 days to work – they still learnt some important lessons. Not least the cruelty of the way wages are deducted from benefits, leaving people working for what seems like nothing. Neither of the two who found work were very keen to give back their ‘benefits’. They also realised quickly the difficulty of living on £65 a week, and the seemingly-small but almost insurmountable barriers that such low income presents – not being able to afford the bus fare to the interview, for example.

In last night’s show, they were packed off to various areas of the country to spend a few days living with people who were unemployed for a variety of reasons. It threw up some incongruous moments – Larry Lamb as marriage counsellor particularly stuck in my mind – but also some instructive lessons. The biggest of which is that each unemployed person, in their different ways, seemed to benefit hugely from a bit of personal attention from someone who cared. It wasn’t something they were getting at the Jobcentre.

The middle class elbows of one ‘celeb’ managed to get her host some work experience in a zoo (although where that’s leading is another matter). The dangerously severe approach of an Irish landscape gardener towards his hosts – a couple with 5 children living on benefits – betrayed his cringing lack of understanding of the barriers many people face, but even they seemed genuinely moved by his austere concern. And when Noel Gallagher’s ex-wife accompanied ex-offender Nick to the Jobcentre, she admitted their hostile approach towards him had almost turned her violent. No wonder Nick was struggling to find work, when that’s the kind of support he was getting.

At Community Links we have talked many times before about the importance of building meaningful relationships with individuals to really achieve change. These programmes illustrated well the two main problems with the benefits system. Its perverse financial disincentives to work in many situations, and the lack of personal support it provides to individuals for whom that could make all the difference. If these programmes have gone some way towards making that more obvious to the public, that can only be a good thing.

One point of concern – the way they seemed to leave the unemployed people they featured. The farewells were presented as emotional and final. I sincerely hope the television company wasn’t heartless enough to severely disrupt people’s lives for four days and then leave them high and dry.

More support for increasing the Earnings Disregard

Friday, March 5th, 2010

Last last year we launched a campaign for government to increase the £5 earnings cap for people moving off benefits into work. It means that people getting part-time jobs as a first step back into work often end up worse off than had they stayed on benefits – a huge barrier to finding work, say the jobseekers we support every day.

Our campaign was backed by a huge number of grassroots charities working with unemployed people, as well as big names like Oxfam and the TUC. And it was nice to add another name to the list of people calling for the same this week, when Policy Exchange released a report calling for the earnings disregard to be raised to £92 (more generous than our £50 ask, but we won’t quibble about that).

Since we launched the campaign, government announced a ‘better off in work credit’ ensuring that someone taking a job over 16 hours a week is at least £40 better off than had they stayed on benefits (even though DWP’s own analysis of the pilot project concluded it wasn’t very successful). Crucially however, this doesn’t hold for people working less than 16 hours a week.

Meanwhile we have met with Jim Knight MP, Minister for Welfare Reform, who expressed an interest in the idea of increasing earnings disregards,  and asked us and a coalition member OSW to put together a proposal for raising the Earnings disregard to £50 for people on Jobseekers Allowance. We looked at what the qualifying period should be: 6 months, 9 months or 12 months? And if there should be a time limit on this. Aware that there is great resistance in the Treasury it is unlikely that we will get an increase for all Jobseekers Claimants immediately, however by asking for it for the most vulnerable people – those further away from the labour market – we hope that it will be a gradual process to changing the rules around a disregard that has not changed in over twenty years! We really welcome Policy Exchange’s report as it raises the debate on the need for change, however, if we get it then the devil will be in the detail.

Welfare Commission: humanising decision making and appeals in the benefits system

Tuesday, February 9th, 2010

Today the Department for Work and Pensions Select Committee publishes its report on decision making and appeals in the benefits system, the headline press coverage reports that overpayments due to error had soared from £400 million in 2000, while overpayments due to fraud and mistakes by claimants dropped. As part of the solution the select Committee is calling for a Welfare Commission to be set up to simplify the benefits system. We welcome this news and believe that any redesign should place a one-to-one service to claimants at its heart; ensuring efficient and humanised service delivery. We have a few specific recommendations for the Commission to consider

  • Reduce the complexity of claim forms,
  • Make crisis loans more accessible and immediate,
  • Addresses the inconsistency of the earnings disregard across all benefits to ensure accidental fraud is not committed resulting in benefits being automatically stopped.

Last year the Community Links advice services were used by a total of 12,400 local people. At our drop-in advice sessions 37.8% were benefits related cases, of which 73% were a result of DWP error. Our advice services continue to be in high demand, services cost several hundred thousand pounds per year – funded by local authorities and the Legal Services Commission. This cost to the tax payer could be dramatically reduced by the simplification of the benefits system and increased competency with the administration process.

Research by AdviceUK in Nottingham reveals that 42% of the demand at advice agencies in the city is ‘failure demand’ – demand caused by failures in the system of public administration. Reducing this would save significant amounts of money and free up advisors to carry out valuable work with clients, supporting them to resolve their long-term problems.

Many of our clients have used our advice services in the past; some have had their benefits mistakenly stopped on more than one occasion. The knock-on effects are increased borrowing and debt, eviction problems and in many cases people falling into the informal economy, working cash-in-hand to cover costs as a last resort. Debt related advice has doubled, and our advisers believe this is in part due to the recession-related rise in claimant figures, and benefits being stopped or delayed as people struggle to find formal work.

Our campaign, Need NOT Greed has been calling for a simplified benefits system. A system which is easier to navigate could help prevent the rise of informal economic activity caused by people struggling to survive poverty. At the launch of the Need NOT Greed campaign in February 2009 Terry Rooney, chair of the DWP select committee said

“There is a treadmill of being in the informal economy out of Need NOT Greed. The striking thing is that the national benefits system is geared up to serve millions, but everybody is an individual – it’s how you can recognise everyone’s needs and requirements. You need a totalitarian system and there are enormous challenges – but ones that need to be faced and met.”

A local campaigner and user of our advice services said

“the system wears you down, I am constantly just surviving. Every time you pick yourself up and try to move forward the system lets you down again. It’s the same old problems for everyone and none of us round here trust it anymore. How can something you don’t trust be able to help you?”

Rising unemployment is increasing demand for welfare benefits at a time when public funding is under severe pressure. Spending time building productive relationships with people using services is time well spent; not an extravagance. These relationships are instrumental to efficient delivery of public services. We hope that a Welfare Commission is established as it is evident that change is necessary – but change must put the needs of the service user at the heart of the system.

Community Links advises government on hidden economy

Tuesday, January 5th, 2010

HM TreasuryThe formation of a Hidden Economy Advisory Group was announced in last month’s pre-budget report, and now HMRC have released some more details.

Community Links accepted an invitation to be part of the group; we have lobbied for its creation for many years.

As a community organisation based in east London, we have provided support and advice to local people for over 30 years. We soon realised that many of the people accessing our services were working cash-in-hand, or informally, some while on benefits. We realised that most were doing so because the system was not supporting them sufficiently and they needed the money, not because they wanted to defraud the taxpayer. They told us how the benefit system and low-paid work often left them with little choice but to work informally, and how people are exploited as the cash-in-hand jobs available are usually low-paid and insecure. And we discovered that although the majority would have liked to formalise their work, there are innumerable barriers to doing so – low wages, inflexible rules, low benefit rates.

In the last 10 years we have conducted in-depth research into the issue, measuring its extent in boroughs across London, and latterly across the UK, as well as delving deeper into why people work cash-in-hand, how it impacts on them, and how they can formalise. We have built up a reputation as one of the few organisations in the UK with expertise in this area, and in the last two years our Need NOT Greed campaign has approached government, not being afraid to tell them what’s wrong, while offering sometimes radical solutions.

Throughout our work we are motivated by the desire to help people help themselves out of poverty. We believe that in the majority of cases cash-in-hand work keeps people poor, trapping them in low-paid and insecure work, and often shutting off the prospect of better jobs. And so we’re very keen to help shape measures that might allow people to formalise their work, or remove the need for people to work cash-in-hand in the first place. HMRC are motivated by the estimated £3bn in unpaid taxes by those working in the hidden economy, whereas we are motivated by the prospect of a better life for the people coming through our doors every day. In this instance we believe the two aims coincide – the best way to increase tax revenues is to remove the need for cash-in-hand work, and allow those working cash-in-hand to easily formalise.

I look forward to working closely with the group over the next few months. I want to ensure that we do not demonise those working informally but recognise the complex reasons behind their work, and that our practical and policy solutions reflect the lives of those working cash-in-hand across the country.

Our Social Change Series 3: the informal economy provides an overview of our research and recommendations to date.

What happened when Melanie Phillips met real people on benefits

Tuesday, January 5th, 2010

Last night was the first of Melanie Phillips’ two programmes on the ‘British work ethic’ on Radio 4, (listen on iplayer for the next week), which she also described in her column. I was particularly interested because we declined an invitation to help in the making of the programme, but also for her reactions to those people, struggling on benefits, who she met.

It’s very hard making judgements about other people, because there’s always a tendency to forget all the ways in which their life is different from yours. I got the impression that before the programme Phillips imagined people on benefits were mostly lazy versions of herself, with her access to money, support, education, social networks, and her ‘middle class elbows’.

She didn’t realise, for example, that people might not travel outside their town for work because they just couldn’t afford the bus fare. Or that a man might not challenge his doctor over a diagnosis that had left him in pain and on a cocktail of pills for many years. To her credit, in both these situations she admitted to having had her eyes opened. But these are just two examples, and there must be many other ways in which her eyes are still closed.

I’m still not sure she realises, for example, what it might feel like to apply for a low-paid, no-skilled, unbelievably dull job with no chance of progression and the prospect of years spent doing it. She dismisses a young man’s assertion that he wants to do an interesting job with fairly casual disdain, but is it really too much to ask, or atleast aspire to? The problem, perhaps, is that he has no idea how he could progress from an entry-level job into a more interesting one, or even what jobs might interest him. He needs access to jobs and support just as much as the man on incapacity benefit, and far less than Phillips probably did at his age. I’d be interested to hear what he thought of her portrayal of him in the programme.

I don’t want to be too harsh though – her column today shows admirable recognition of many of the problems of the benefits system. And to a great extent we all share the difficulty of truly putting ourselves in someone else’s shoes, rather than just imagining ourselves standing where they are.

In her column she notes that ‘not surprisingly, no one who was on the fiddle agreed to speak to me.’ Our Need NOT Greed campaign works with many people she’d consider ‘on the fiddle’, and we hope she’d be surprised to find that, again, it’s usually the system rather than individuals’ failings that forces them into it. For example, as we highlighted last year, people on Jobseekers Allowance who get a part-time job are only allowed to keep £5 of their wages. In this situation, can you blame someone for not declaring their work? In our experience, informal work is a great sign that people want and are able to work – we now needs a system that makes it worthwhile doing it legally.

A Year of Social Change

Tuesday, December 22nd, 2009

As we reach the end of 2009 the national team at Community Links have been reflecting on the last year … and begining to plan for 2010.

In 2009 Community Links has seen more and more people come through our doors, as people struggle and demand for our services increased. In Newham Community Links  carried on running much needed local services -  youth clubs, the New Deal, our own school, provided advice and support to families struggling with debt and welfare, and much more. And we’ve continued to share our learning nationally, achieving considerable success.

Projects that our national team have worked on this year include
The Parliamentary launch of our Need NOT Greed Campaign in February, to the National Talent Bank in June, Chain Reaction in November,  including the launch of three more Council on Social Action reports and much else besides.

We have produced a short report on our activities: you can read it here.

To all those with whom we’ve worked, a warm thank you. To those with whom we haven’t, how about next year? The election, unprecedented regeneration, the European Year Against Poverty all provide us with enormous opportunities for social change. We look forward to seizing that moment with you.

Wishing you a peaceful Christmas and a joyful New Year
The Community Links national team.