Monday, 25 March 2013

Cost Benefit Analysis

Yesterday morning the Politics Show for the North-West had an article on the introduction of universal credits because this area will become a pilot area in April with the rest of the country taking up the benefit reforms in October. The introduction was based on George Osborne telling us that it is wrong that someone should be better off on benefits than they would be if they were working. This sounds reasonable for a few moments but then consider the role of benefits. Could it be that benefits are there to supply basic needs? If so could there be employment which does not supply those needs? If this is the case then George needs to say that.

Universal credits will replace a number of benefits including income-based Jobseeker’s Allowance, Income Support, Child Tax Credits and Housing Benefit. So far so good. It is confusing to have so many benefits and it does seem reasonable to have a limit of £500 per week as a single monthly payment. The trouble is that I would go back to the reasons for having the benefits in the first place. If they are supplying basic needs then it is possible that under the new system basic needs may not be met.

The under-occupancy charge applies to those in social housing with spare bedrooms. It would be nice to think that we could make a more efficient use of our social housing. It would also be nice to think that as a consequence less people would be homeless. One of the criticisms by those who label this a bedroom tax is that there is not enough social housing with a smaller number of bedrooms. It seems so obvious to me that the charge should not apply to someone who is willing to downsize but is not able because of lack of availability. The trouble is that I have not read this anywhere.

There are also impending changes to disability living allowance which will be replaced by Personal Independence Payment. The stricter criteria for qualifying means, in effect that if they didn't change the name then this would be simply a cut in benefit. The Government interprets this as stopping nearly £600 million in overpayments. You are either fit for work or you aren't and cutting benefits isn't going to help those who can't work.

The spokesperson for the Citizens' Advice Bureau was not keen on the DWP having 'targets for sanctioning people' which basically means benefit cuts and it may well cost more to deal with the consequences of the cuts. The Tory MP confirmed that the changes would mean more savings. He also said that we have to protect the most vulnerable.

The trouble is that by changing the criteria for benefits you are telling people who have been designated unfit for work that they are now fit for work but their condition has not changed.

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