Saturday, 29 March 2014

On the abolition of the Local Welfare Provision Grant

Research from Oxfam states one in five people in Britain are living in poverty. Falling incomes due to the slow economic recovery and rising costs for basic essentials such as food and energy mean that even people in work and not claiming benefit are struggling to get by. Indeed, more working households are living in poverty than non-working ones for the first time. Oxfam go on to suggest that by 2020 austerity could push an additional 800,000 children and nearly 2 million adults into poverty. As a consequence it is arguable that, if a crisis or emergency were to occur, their ability to cope and avoid destitution is weakened.

Coalition Government policies such as the Bedroom Tax already cause considerable pain and distress for those on low incomes and it is worth saying that many millions more who are in part-time work do not benefit from the increase in the personal allowance if they never paid tax prior to 2010.

The decisions by the government on welfare over the course of this Parliament will ensure that people on very low incomes, and who rely on social security, will continue to drift away from those who are doing fine, meaning entrenchment between the bottom quintile of society – and the rest.

The strings of the safety net are already loosening – and the risks of people slipping through it are ever increasing.

In 2012 the Economic and Social Research Council found that 26 percent of households would be unable to cope with an emergency situation of needing to replace or repair broken electrical goods, up from 12% in 1999; 32% in 2012 could not afford to regularly save, up five percent on 1999, and 12 percent in 2012 couldn’t afford to take out home contents insurance, up two percent on 1999.

In the past, individuals and families who suffered emergency hardship and financial difficulties could make an appeal to the Discretionary Social Fund, overseen centrally by the DWP. In 2012, as part of the Welfare Reform Act, the government decided to scrap the centrally-administered Discretionary Social Fund, and instead gave money from the fund direct to councils to enable them to deliver targeted and flexible support to individuals and families in their local communities. Steve Webb, Minister for Pensions said this would be done “to avoid a gap in support for vulnerable people”, and directed councils to ensure “funding… be concentrated on those facing greatest difficulty in managing their income”. In Cambridgeshire, the County Council were responsible for this localised provision, and set up a ‘Local Assistance Fund’ in 2013.

The continuation of this fund – albeit now reflecting the ‘localism’ agenda of the Coalition Government – in 2012 was, perhaps, an admission of recognising the heightened level of financial insecurity felt by the poorest millions – including many thousands in Cambridge.

It is therefore baffling, but not at all surprising, that, just two years on, the present government decided this discretionary spending is now unwarranted. Osborne, Alexander, Pickles and Duncan Smith want to mete out even more punishment to the poor and vulnerable through the total abolition of the Local Welfare Assistance Fund, cutting the amount it gives to local authorities by 100%, as specified in the Local Government Finance Settlement for 2015-2016.

There was no consultation or discussion with councils about this move. In Cambridgeshire this amounts to a loss of just over £1m per year.

Individuals and families in Cambridge who find themselves in extreme hardship and destitution because of events beyond their control will now have no final safety net from either the state or from the County Council. That is unless there is a decision to continue the scheme set up and fund it out of its core budget. But when judged in the context of continuing swingeing cuts to overall local government budgets, it is probably very unlikely the County Council will want to keep its fund because of the need to keep funding ring-fenced and statutory services going – and the Cambridgeshire Local Assistance scheme isn't one of those.

The Tory Chair of the LGA, Sir Merrick Cockrell said in response to the news in January: "For some councils, providing crisis payments to those in need from local service budgets is likely to be a stretch too far.”

So, where will those in desperate circumstances and who need help go to now? Likely down the desperate road of food banks and charity; those same charities that are also seeing reduced resources and spending for projects and essentials due to cuts to government grants. As austerity continues, and the poor get poorer, charities will be in a weakened position to cope.

It is also likely people will seek help from loan sharks and payday lenders. And we are only too acutely aware of the grotesque damage these gutless companies are doing in making huge profits on the back of the penniless and desperate.

The payday loan market was worth £2.0 to £2.2 billion in 2011/12, this is up from an estimated £900 million in 2008/09. The Office for Fair Trading found that a third of loans are either repaid late (18 per cent) or not repaid at all (14 per cent).

So, to avoid the intolerable risk of causing more misery and pain to the vulnerable and poor at risk of needing emergency assistance in our city, we are city councillors must do our bit to urgently see what this authority can do to stem the flood by building the dam. We must work proactively with key partners, such as the Citizens Advice Bureau, the County Council, food banks, and charities and prepare as best as possible ahead of the date of April 2015 when the Local Welfare Discretionary Fund is no more.

A joined-up approach and proactively thinking of solutions to mitigate the impact of the fund’s demise will help to avoid such a doomsday scenario from happening.

Sunday, 23 February 2014

Why Cambridge needs a 'Sharing Prosperity Fund.'

I haven't blogged here for a few years... So let me dust off my keyboard, and blow away the cobwebs on this Blogspot account, and post this missive, most of which I plan to say in the debate on our budget amendment this Thursday.


Labour councillors have, for a very long time, said the City Council must do more to tackle the inequality experienced within Cambridge, to promote equality and social inclusion wherever possible. We continue to believe this, and we also believe that in straightened times, our efforts must not be curtailed, to the contrary. Our efforts must be redoubled. The £500,000 budgeted in setting up this fund is only the start. We believe the creation of a Sharing Prosperity Fund is a serious commitment on our part, in recognising the duty of this council to promote the interests of all its citizens, and ensure that all have a decent standard of living.

Whilst the continued success of our city’s biomedical and tech sectors in delivering solutions to everyday needs here and abroad is unquestionably welcome – nearly everyone has in their pocket a mobile phone with chips designed by ARM, for example – it is a fallacy and a dangerous assumption to state that Cambridge is a place where this success has trickled down to all who live in our city. There are many people who work hard and contribute to the city’s economic success, but are often on low wages and have little promotional prospects. I think of college bedders, cleaning and catering staff at Microsoft Research, shop assistants in the service sector, and university assistant staff. Not to forget our own public servants such as street cleaners, city rangers, parks and open spaces staff. For without all of them our city could not function.

Professor Alan Barrell from the Cambridge Judge Business School was quoted recently in the Independent as saying:

“Cambridge is ­booming because we have a real community of ­enterprise and social inclusion. Everyone shares with each other...”

I would be very happy for Professor Barrell to come with me to visit Ditton Fields in my ward, show him around and for him to meet residents there to ask if they agree with his statement. For the truth is that, even though some areas of Cambridge are really prospering, many other parts of Cambridge do not feel included in this so-called ‘booming’ community of enterprise. Many indeed are those very people I referred to, the cleaners and shop assistants, junior university assistant staff: the cogs in the machine that keeps the Cambridge motor going.

Whilst Lib Dems trumpeted the recent Centre for Cities report which stated Cambridge had the lowest levels of JSA dependency in the country, and had a high employment rate, suggesting Cambridge was - quote, unquote - ‘ the most equal city in Britain’, they failed to mention the report also specified that the gap between average house prices and average wages increased, with Cambridge seeing the largest increase in house prices in the country, beating London, and also experienced one of the largest falls in real term wages in 2012/13.

The cost of living crisis experienced in our city - one measure being the huge percentage increase in numbers using the Trussell Trust’s Food Bank over the last two-to-three years - has not made any better the structural and intergenerational poverty that already existed in Cambridge.

Cuts to government budgets across the board – especially in local government, including this council – does nothing to help matters, quite obviously.

Even though yes, indeed, the economic situation is improving, albeit extremely slowly, this isn’t enough to address the deep division in respect of opportunities and outcomes experienced in our city.

For example, from the latest data available, Abbey Ward, King’s Hedges, and East Chesterton were in the top quartile for measuring the 2010 Index of Multiple Deprivation, (i.e. most deprived) compared to Newnham Ward, and parts of Castle, and Queen Edith’s, which were in the bottom quartile (i.e. least deprived). This was the case before the great recession.

Parts of Abbey Ward were in the top quartile for education skills and training deprivation, compared to the vast majority of the city which was placed in the bottom quartile.

There is a clear and marked east-west divide in health deprivation and disability.

Life expectancy is seven years less in the most deprived areas of Cambridge compared to the least deprived.

Rates of youth offending, overall crime, domestic violence, and isolation of the elderly is also marked depending on which part of the city you live in.

The City Council’s Poverty Mapping Survey in 2009 (the last year where this survey was produced) said that Abbey Ward had a benefit population of 1,900. One in five households received Housing Benefit and/or Council Tax Benefit. In contrast there were only 118 benefit claimants in Newnham, and 275 in Market and 250 in Castle. In 2009 there were 635 households receiving Child Benefit in Abbey, compared to just 33 in Market and 34 in Newnham and Castle Wards. The gap between these wards in respect of benefits claimed existed before the crash.

Cambridge as a city that is big on social inclusion? A city that is successful in sharing prosperity, and creating opportunity? I’m not so sure Professor Barrell.

We are not scaremongering when we say that Cambridge is a city divided; a ‘tale of two cities’ as referred to earlier. I detect complacency from the ruling group that everything is rosy; there is no need for a sharing prosperity fund as Cambridge is ‘the most equal city in Britain’. By stating that, they are also saying by implication that there is no need to address the structural reasons why poverty and inequality continue to exist in our city. Hear no evil, see no evil, do no evil.

Well, I’m sorry. The evidence is clear and stark. Cambridge is NOT equal. And it has not improved under fourteen years of Lib Dem rule in Cambridge, and certainly not made any better by four years of Lib Dem and Tory rule at Westminster.

The City Council can’t solve the inequality experienced in our city by itself, and a sharing prosperity fund as specified in our amendment won’t be a silver bullet, but it will be a first step. The £500,000 proposed in setting up this fund is a serious investment in mitigating the cost of living crisis and in loosening the chains of intergenerational poverty, and it complements other proposals in the Labour budget amendment, for it is our goal that we want to see One Cambridge: One City where power, prosperity and opportunity are in the hands of the many, not the few. 

Thursday, 29 July 2010

Why I am backing Ed Miliband for Labour leader

Why am I backing Ed Miliband for Labour leader? Ed understands how we can use our values to inform our direction. With New Labour, the direction the party was travelling in informed our values - which meant being all things to all people, too much focus on triangulation and the Third Way and not doing enough to break down the old Conservative orthodoxies about the relationship between the state and citizen. This is not saying Labour needs to vacate the centre ground - far from it. What Ed believes in, and I agree with, is that we need to use our values, our core values, and project them in a way that attempts to reshape the political argument instead of kowtowing to the status-quo.

Indeed, what is striking is that values drives Ed. This seems an obvious point to make of any politician, but more so with Ed Miliband. Values have been articulated through many of the ideas and policy statements that run through his leadership campaign. These include: the call for a living wage and a High Pay Commission that looks into the pay gap not just in the public sector but, more importantly, in the private sector. The need for a better life/work balance. Reclaiming the civil liberties agenda as our own and moving away from New Labour's authoritarian tendencies. Fair markets and fair financial regulation not a return to the risk-taking indulgences of the past with light touch regulation. A clearer focus on green issues as a way of informing policy. A graduate tax, and unapologetically calling for the 50 pence tax band to be made permanent.

Unlike any of the other major contenders in the leadership campaign, you get a sense that there is a mission behind Ed Miliband that drives him to make the Labour Party again the vehicle for social progress and solidarity. You can picture how a Labour Party would be under Ed Miliband. No, not a return to the socialist comfort blanket of the early 1980s, but a realistic, refreshed, redefined and modern social democratic party which understands that Labour needs to move on from Blairism and create a realistic, credible alternative progressive vision for this country.

Ed also, I believe, is the best leader in the sense that he has the right skills to strike the delicate balance between being a party of opposition and a government in waiting. We need to be a constructive opposition - agree with things the Conservatives and Liberal Democrats get right, and disagree when they get things wrong. Ed, I believe, will strike the right balance as leader by positioning himself and the party as being pragmatic and principled. Past history shows that Ed was not at the forefront of the tensions between Brown and Blair, and Blair staff remarked that Ed was the easiest to work with in a very pressurized environment in Numbers 10 and 11 Downing Street. His unflappable nature suggests he can self-assured leader that would build a party with a clear, principled focus that stands up for everyone and is ready for government - but in a way that does not smack of shrillness or trying to outflank the coalition say, on crime, for the sake of cheap newspaper headlines.

He can also, in the words of Neil Kinnock, ‘lift’ people. He can connect, inspire, listen and communicate effectively. He is believable. He has integrity - as shown from the expenses scandal, where he was praised by the Telegraph for being squeaky-clean. He can unite the party, transcend the Blairite/Brownite tribes that caused the disagreements and splits within Labour. We need someone who can convey effectively the new vision and direction that can reach out to those who were of the five million that deserted Labour since 1997, but also those who have never voted Labour.

Allied to this is that Ed has a sense of honesty in saying where Labour went wrong, as much as where we got it right. Iraq. Not doing enough to close the gap between the rich and poor. Neglecting civil liberties, being too authoritarian and too close to the right on law and order. Contrary to what others have said during this campaign, the honesty to say that we got things wrong is not a dumping of Labour’s legacy, or rubbishing the progress that we had made in government. It is a sign of the humility that the next Labour leader should have in their attempt to reconnect with the electorate. Only by saying that we need to face up to the facts as to why and how we lost, and do something actively and conclusively about it, will we get the trust of the British people once more. Ed Miliband is the person who can guide the party successfully through this mission.

Tuesday, 15 June 2010

Can mutualism be Labour's new big idea?

A new approach could be needed in relation to how Labour sees the concept of social democracy and promoting equality if it found itself back in government in 2015. The Conservatives and Liberal Democrats in government are using the problem of Britain’s deficit as a way to promote a systematic rollback of the State and public services. By 2015 public services could be a shadow of its own self after the expected cuts and job losses. Any incoming new Labour government would find it exceptionally hard to rebuild the decimated public sector in a way that is sustainable and economically prudent.

For local and central government to rebuild trust with the citizen and promote social democracy and higher public spending would be an exceptionally hard task for a new Labour government within the next five years, especially if tax receipts are still weak, economic growth weak, and the deficit still the albatross slung around the collective neck of the cabinet.

In this context, if the above was correct in 2015, how can Labour rebuild confidence in the promotion of social democracy in a new era of fiscal restraint during a time when resources could be bare and money extremely tight even by the time it could return to government?

In Labour's 2010 manifesto it expressed support for the idea of mutualism. It said: “We want to see more local organisations run on co-operative principles with an expansion of Community Interest Companies and third-sector mutual organisations that reinvest profits for the public good.” The manifesto went on the commit to the mutualisation of British Waterways.

‘Mutualism’ can be defined in this case as a partnership between citizens that leads to a valued outcome. It encourages people to work together for the common good. It encourages cooperation, solidarity and the flowering of shared values and beliefs to lead to an end that benefits all. A Cabinet Office paper in 2009 explained that mutualism, or “co-production”, was a way of
“establishing a partnership between citizens and government... Citizens contribute more resources to achieving an outcome, share more responsibility and manage more risk in return for much greater control over resources and decisions.”

Social democrats could nod with approval the line “establishing a partnership between citizens and government”. The State provides the resources and the tools to enable citizens. This is different to the Conservatives’ ideas of a “Big Society”, in which the State is meant to withdraw from the provision of services and let individuals and get on with the job of providing them.


So, can Labour use mutualism as its new big idea? The ideals that mutualism and co-operatives espouse could be embraced by Labour in the post-credit crunch age. Indeed the Labour Party already enjoys a very significant historical partnership with the Co-operative movement, and shared ideas and ideals have contributed to the promotion of co-operatives and mutuals in our society.

But can mutualism promote a good society? Through mutualism and co-operatives, everyone is a stakeholder. Everyone has a voice and everyone has the ability to be part of an prosperous and decent society where power, resources and wealth can be shared more equitably. How? Local (and central) government can influence and encourage the growth of the non-profit sector in some public services. However, it must continue to oversee, monitor, support and regulate the non-profit sector in the provision of services to the public.

A good society could bloom in the public and private sectors through partnership of the State, co-operatives, as well as the voluntary and non-profit sectors to empower the citizen and give them a true voice in the way in which not only their services are run, but what they get out of them.

sure start

One can look at the success of SureStart. This is an example whereby government can provide the means for people to contribute for the common good - a classic example of the enabling State. Government funded SureStart centres, which in turn were provided by local authorities, as well as the voluntary, private and independent sectors.

Could this be the future of social democracy in the modern age where resources are scarce and the means to achieve them are also likely to be scarce? Sweden and other Nordic countries have experimented with housing co-operatives and in other areas. Indeed, the Labour-controlled Lambeth Council has decided to promote the mutualism and co-production by attempting to become the first ‘Co-operative Council’ in Britain. In its White Paper, Lambeth Council outlined that:
“It is vital that services adopt a ‘mixed market’ approach to service delivery. Numerous models already exist, which local areas can draw upon, such as neighbourhood management, contracted services, third sector provided services, public sector provided services, mutuals/co-operatives, arms length management organisations (ALMOs), Tenant Management Organisations (TMOs), foundation hospital trusts...”
Yet social democrats are also entitled to ask the question: what is the difference between co-production and voluntarism? Isn’t both about passing the buck, shifting the role from government to people as a way of washing their hands from responsibility to public services and the vulnerable? Certainly that has been some of the criticisms of foundation hospitals. If Labour was to embrace co-production as its ‘big idea” then how can it gather support for this venture? And, more importantly, can the ideology behind mutualism and co-production translate into viable policy? What areas of the public services can mutualism thrive? And which should be left alone? What is clear, however, that Labour must think anew how it can make the case for a good society.

Sunday, 13 June 2010

Why New Labour failed in forging the case for social democracy

Labour needs to return to a mature, respectful, modern social democratic agenda. New Labour tried to do this - it tried to marry the ‘traditional values’ and place it in the ‘modern setting’ that John Prescott alluded to. But New Labour did not succeed in marrying the timeless traditions of the party and placing it in a pragmatic setting. Of course the increased investment in public services, 600,000 children out of poverty, giving dignity to old-aged pensioners once more, the minimum wage, the Human Rights Act, civil partnerships and the equalization of the age of consent, aid to Africa and much more were wonderful successes of the last government. We should not forget these brilliant things.

Yet New Labour did not do enough to challenge the conservative orthodoxy with relation to the relationship between the individual and the state. It did not give clear credence to reminding people - especially high earners - of their responsibilities to society. Bankers earned huge bonuses whilst playing casino capitalism through the lax regulation of financial markets that hit ordinary people with repossessions and job losses when the chickens came home to roost during the recession. Tax rates were left unchanged at the top for the majority of the time Labour was in government. Any increases in indirect taxation, National Insurance, and other ‘stealth taxes’ only undermined the progressive taxation cause with which Labour should have shouted from the rooftops until it was red in the face. It also undermined the trust that citizens had with government, and as a result, trust in the State.

When citizens feel that the State is not listening, they do not feel empowered, and when they do not feel empowered then they feel that the government is on their back and turn to attack its very being. The whole purpose of social democracy is to empower those people who feel shut out of society. Solidarity with others. A collectivi st society. Promoting fairness and equality. That New Labour was aware of the feeling people still felt the State was not listening to them it is probably safe to say, but during the years of plenty - in respect of high tax revenue, economic growth and electoral success - it chose not to break a good thing and challenge and confront directly what Tony Blair promised to: the “forces of Conservatism”.

That New Labour did not attempt to radically re-alter the relationship between the citizen and State only undermined its cause. Using the State to make people feel fearful, concerned and worried when instead it should have been reassuring, respectful and tolerant by the promotion of ID Cards, the DNA database as well as numerous anti-terror laws and control orders only weakened the ability in peoples eyes of the state to be a force for good. It played into the hands of right-wing and conservative critiques of the ‘overbearing state’ and ‘big government’.

New Labour should have been more confident of its own mission and more confident of the ability of social democratic ideology to challenge conservative dogma about the State. If it did, it could have made the case confidently for being more progressive in dealing with the recession by rebalancing tax rates further so that indeed ‘those with the broadest shoulders’ did bear the biggest burden by making the new 50% rate permanent. It could have introduced the Future Jobs’ Fund earlier, therefore embedding the importance of using the State for positive ends and using government to help people when the private sector couldn’t. Financial regulation should have been tightened earlier. VAT could have fallen earlier together with increasing tax allowances for those on the smallest sums, thus making the tax system fairer on the worst off and balancing it with higher taxes in other areas (such as corporation and capital gains tax, which fell under Labour). It could have made the case more strongly for using the minimum wage to secure the basis for a living wage and eliminating low pay altogether.

While repeating the mistakes and disasters of the early 1980s must be avoided, Labour should use the current situation at Westminster to reinforce the ideological differences between the ‘ConDems’ and us. This means being more upfront and honest about that fact that Labour is the only party of progress that exists in the mainstream of British politics now. We should seize the moment. The Conservatives and LIberal Democrats are going to use the current situation with regards to the deficit as a way of solidifying the concept of the role of government as “bad” and will use public sector cuts, in the name of economic prudence, as a way of rolling back the State and reducing the importance of the public sector to a level that could bypass the damage done of the Thatcher years.

Whoever is the new leader of the party should remember the triumphs but also the mistakes of the New Labour years and attempt not just to rebuild the internal structure and morale of the party, but also look at the wider picture and be more brash and confident at forging a social democratic agenda for change together with making the case for the State as a force for good.

God Bless Dennis Skinner

This is the YouTube video I published a few weeks ago showing the Beast of Bolsover at his best, just before David Laws resigned. Over 6,000 views so far. Not bad for someone of pensionable age, as Gideon reminded us...

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