Much of the talk about reducing Britain’s deficit will focus on cutting public spending over the next few years will be on departmental spending in Whitehall and Cardiff Bay, however the area that continues to create the most heated debate is cutting and reforming the large benefit bill that include Job Seekers Allowance and Disability Allowance.
With that in mind a report was published last month from the New Economics Foundation called
‘Benefits that Work’ and argues that the UK needs a new Community Allowance (to replace Job Seeker Allowance and Income Support), which proposes to channel benefits spending into the creation of jobs to help communities and support people to move into work.
At the launch they said
‘The Department for Work and Pensions spends nearly £3 billion on Jobseeker’s allowance and over £8 million on Income Support every year. For many deprived areas spending on benefits payments and welfare to work programmes is the largest public investment they receive. In reality this investment may fail to get to the root of the problems that exist in these neighbourhoods.
The benefits system often compounds the challenge of tackling long-term unemployment. It is complex and riddled with perverse incentives. It does not fit well with the flexibility of today’s UK labour market, where many of the jobs involve part-time, temporary or irregular hours. Complying with the requirements of benefits can create a burden instead of supporting people to find employment.
Low income neighbourhoods have the most pressing need for activities to improve them. They also have the most workless adults. This report sets out an analysis of a new policy proposal – The Community Allowance – which aims to make a constructive link between public spending on benefits and work for the development of local neighbourhoods.
The Community Allowance would allow community organisations to employ people out of work to develop the areas they live in. There is nothing particularly new about work schemes. What makes the Community Allowance original is that it secures the benefits and an additional income for people. It allows them to concentrate their efforts on moving towards employment instead of meeting the requirements of their benefits. By working through community organisations, the Community Allowance would ensure that the work and the support it provides would be tailored to the needs of the long-term unemployed.'