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Archive for August, 2008

King predicts doom and gloom as unemployment levels rise

Friday, August 15th, 2008

Credit: Personal loansRecession is on the cards according to economists studying the latest figures on the economy. Mervyn King, the governor of the Bank of England predicted that next year would be a “difficult one”  for the UK with unemployment rising at its fastest rate for 16 years. Not good news for Government reaching  80% Employment and Child Poverty Targets. Rising unemployment and inflation will ultimately equate to debt for many people trying to survive the current credit crunch. As basic groceries become more expensive and weekly incomes trickle off, people are forced to think of alternative financial sources. According to the Guardian

“The number of people claiming jobless benefits last month rose at its fastest rate since the recession of the early 1990s,” and undoubtly those that are always hardest hit, the most disadvantaged in society are forced to contact the loan shark for a quick fix, sending them further into debt and ultimately into poverty.

The BBC reported ‘About 22,000 jobs went in the construction sector while factories cut 35,000 jobs’:a market strongly dominated by disadvantaged people.

The alternative is cash in hand work. At a time when the job market is incredibly unstable and cannot guarantee financial security people do not have any choice but to accept illegal wages, irregular hours with no financial help of working tax credits. Basically people become vulnerable workers, with no rights and long hours equalising very little pay.  Nevertheless, it is an essential income at a time when every penny counts. And not just for the individual or the family: it is an essential contribution to the UK economy. As cash in hand work has been estimated to account for 12.3% of the GPD, a staggering £120 billion and this too is an essential income for the UK at a time when every penny counts. As Polly Toynbee pointed out in The Guardian  this week; finance, insurance and high street banks form 7.9% of the GDP, putting the size of the informal economy into perspective.  

With rising unemployment levels, benefits uptake may  increasingly be viewed begrudgingly by society.  People trapped in poverty and working cash in hand out of need, not greed  may become the targets of fustration. As the credit crunch tightens purse strings, empathy and patience may decrease as personal money worries increase. Ironically people demonised as scroungers could be the anwer to much of society’s current problems. Be it Child Poverty, unemployment levels or the credit crunch, if Government envisaged cash in hand work as a potential source of finance, harnessed it in the right direction, with the right support and encouragement they would be one big step closer to reaching targets. After all we are in this doom and gloom period together; all sharing the same concerns of bread prices and bread earners.

To hear more about the Informal Economy Campaign   and how cash in hand workers can help solve society’s problems – not create them please send Maeve an email on maeve.mcgoldrick@community-links.org

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Posted in Benefits, Child Poverty, Informal Economy, Welfare | No Comments »

Benefit Claimants Sounding Board

Wednesday, August 13th, 2008

Jobcentre PlusThe Department for Work & Pensions (DWP) and Jobcentre Plus (JC+) should establish a permanent ‘Benefit Claimants Sounding Board’ or ‘Claimants Advisory Panel’ which would work directly with head office DWP / JC+ officials and Ministers to develop new strategies, policies, programmes and initiatives.

DWP / JC+ would have the opportunity, by working directly with their ‘customers’, to listen, learn and act, and so more fully meet the needs of the people they are there to support. As well as their strategic input on issues such as ESA roll out, conditionality for lone parent, skills, job retention and carer advancement, contracting out services, and the role of volunteering, they could help advise on improving existing services (delivery and policy); develop new programmes and pilots; add their thinking before green and white papers are written; and tap into networks that DWP / JC+ find ‘hard to reach’. The list goes on.

There are precedents. Currently the Department for Communities and Local Government has the National Community Forum (made up of local community activists) bringing the voice of communities into government; and the Department for Business Enterprise and Regulatory Reform had a Small Business Council, and now has a Small Business Forum. There has been a lot of talk (and TV programmes) over the last decade of senior managers going ‘back to the floor’. DWP already has a programme by that name for senior civil servants. (more…)

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Posted in Benefits, Everyday Innovators, Innovation, Welfare | 2 Comments »

Putting Purnell in the Picture: welfare reform

Thursday, August 7th, 2008

Creative Commons License photo credit: splityarn
365.24Evidence that conditions and sanctions work to get people off benefits has lead to a review headed by Professor Paul Gregg of Bristol University to further this practice in tackling the

“Escalating conditions for the long term unemployed or those thought to be abusing the system.

James Purnell who introduced the Green Paper on Welfare Reform said:

“New evidence published today shows that the conditions and sanctions we have introduced over the last decade have played an important role getting people off benefits and into work.

“But there is still a minority of people who repeatedly fail to do the right thing. It is clear that for them, the current penalties are not effective in changing their behavior.”

According to the Guardian sanctions are what the government describes as ‘the hidden art of persuasion.’ And this threat of persuasion is likely to make claimants look for work, according to a survey carried out by the DWP. How long people stay in work and whether that work is suitable has not been surveyed. 

Besides persuasion, support and incentives are the crucial elements in tackling unemployment and enabling progression. If the UK is to demonstrate best practice in Welfare we need to broaden our minds and think outside the box.  As Professor Paul Gregg considers various experiences from across the world in devising the next steps for the Welfare System places like Brazil and Pakistan need to be given due thought.

In Brazil and Pakistan governments are heavily investing in the informal economy with a five year plan based around incentives and support to harness  informal workers and utilise entrepreneurial skills.

Dr Sabur, who is chairman Policy Planning Cell of the Ministry of Labour and Manpower in Pakistan and influenced the thinking of the latest 5 year plan, argues that

“the black economy cannot be eliminated through punitive measures and that it needed to be tackled by providing  incentives that would gradually merge the black economy into the formal economy.” 

In Brazil a micro-loan provided by government to support informal workers has enabled Ms Sampaio to buy nail polish and kick start her manicure business, which she runs from her house.

“I feel like we are part of this group of people that are coming up in the world,” said Ms. Sampaio, 28. “When you don’t have anything, when you don’t have a profession, don’t have the means to live, you are no one, you are a mosquito. I was nothing. Today, I am in heaven.”

According to a study launched by the International Monetary Fund what creates the informality, in the specific case of Peru, is the lack of flexibility in the workforce.

Professor Gregg’s vision for the UK’s Welfare system is based on flexibility but currently there is no indication of accommodating informal work and creative ambition into the review on progression and persuasion.

The Informal Economy Campaign seeks to do just this.

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Posted in Benefits, Informal Economy, Welfare | No Comments »

Tackling child poverty in Newham

Wednesday, August 6th, 2008

Birthday Cake Picture The London Borough of Newham Overview & Scrutiny Commission on tackling child poverty recently launched their final report. We at linksUK were commissioned to provide further evidence by interviewing local families living in poverty. 

We presented the findings as case studies. The image here is from a poignant diary entry of one young person, aged nine, imagining what her birthday cake might look like.

 

Notable findings from the case studies show that:

All of the families struggle to pay for the basics including food and energy bills; some are living through periods of absolute poverty, for example, not having enough to eat.

All of the families interviewed have multiple, complex and interconnected issues each of which impacts on their immediate and future circumstances, contributing to a life lived in poverty. Poverty is not a simple issue. Some of the participants are working but remain in poverty; and some are working outside of the mainstream for cash-in-hand to provide for their families. (see our work on the informal economy) 

Housing is an important issue for participants, who reported poor quality, cramped and damp accomodation, as well as  poor service from the housing department. These issues are affecting residents health, employment and ability to move into work. (see linksUK’s ‘Housing Benefit in 2008’ evidence paper No.11)

All of the case studies point towards inconsistent and at times poor experiences of dealing with local and national statutory support services. (see linksUK’s report ‘Interact: benefits, tax credits and moving into work’)

Participants had good ideas and solutions about how to improve their own situation and local services. (see: linksUK’s Everyday Innovators programme)

All the people described in these case studies are likely to continue to live in poverty for years to come. 

Later this year we will be publishing our own report on child poverty, as part of our forthcoming ‘Social Change Pamphlets’ series, subscribe to regular updates to be kept in touch.

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Posted in Child Poverty | 5 Comments »