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. 
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