My interests in questions of social inequality, and personal experience of the benefits system has led to me acquiring several jobs working for charities in some of the poorest areas of London providing support to those living on the breadline. As a result of my day to day activities, I have often pondered how those living off solely the welfare state make ends meet.
Over two years ago, the looming changes in the benefit system led to my colleagues and I attending extensive team meetings with directors and managers, asking where do we go from here? How do we effectively support our service users? Will the company/charity/organisation feel the repercussions of the benefit cuts and harsh sanctions? In those instances it appeared that the security of employment for vulnerable people was the only answer to the newly arisen problem of a changing welfare state.
‘WELFARE REFORM ACT WILL IMPOVERISH HUNDREDS OF THOUSANDS’
The ins and outs of welfare changes temporally as well as geographically, its evolution depends on choices made within their functioning regions. The current British welfare state is attributed to the development of a state insurance plan shortly after the Second World War, characterised by individual means tested social insurance, which included providing educational and healthcare assistance as well as welfare benefit payments.
Although the newly implemented Welfare Reform Act of 2012 has been branded negatively, DWP have stated that the changes to the current benefits system aims to make things “simpler and clearer”, by encouraging people to get back into work and ensuring that a fairer system exists for both the benefit claimant and the taxpayer. The changes include the introduction of Universal Credit, a single monthly payment aimed at creating a smooth transition from benefit payments into full-time employment (similar to a monthly wage). A stronger approach to reducing fraud and error, including harsher penalties and benefit sanctions for those caught. The introduction of the Bedroom Tax, in which a home owner’s housing benefit payment is deducted if they do not make sufficient use of all the rooms in their homes, 14% deduction for one spare bedroom and 25% deduction for two or more. The introduction of the Personal Independence Payment (PIP), replacing the Disability Living Allowance (DLA), where payment is based on a complex assessment of the individual’s disability, ultimately PIP will depend on how your condition affects you, not what your condition is. Greater power is also being given to local authorities (LA’s) in order to tackle any abuse of the Social Funds system (government based fund from which loans and grants are given). A reform of the Employment and Support Allowance (ESA) benefit is currently taking place, where those deemed as not seriously disabled will have a time limit on their benefit claim. There will also be changes to the child support system, parents currently claiming Income Support will have their claim changed to Universal Credit or an equivalent means tested benefit once their youngest child is over the age of five.
These changes are more likely to be felt in areas with a high population of benefit claimants of job seeking age, such as the London Borough of Barking and Dagenham. The area is home to a large youth population in comparison to
its surrounding boroughs, in November 2012 there were 5.6 million benefit claimants of working age, compared to 2.5 million claimants of the pension credit. According to government poverty markers, it was viewed as the fourth most deprived borough in London, with a high number of its residents either being in low paid employment or claiming benefits, this coupled with low educational attainment has affected the social climate of Barking and Dagenham (Bressy and Dwyer, 2012)9-in particular the number of homeless households has risen dramatically, placing the borough second place in the run for the most homeless households in London. The government is already acting in order to change these statistics by including the borough in a large-scale social, economic and housing investment initiative spanning the eastern quadrant of London. These developments were initially called the Growth Boroughs Scheme until December 2013 however it is now functioning under many different guises (Local Enterprise Growth Initiative, London Sustainable Industries Park, London’s Newest Opportunity). Benefit changes coupled with shifts in society and community settings in turn may provide the perfect setting for alternative forms of employment to flourish.
“INFORMAL ECONOMIES OFFER NEW INSIGHTS INTO PROSPERITY”
The alternative forms of employment, mentioned previously, refers to labour exchanges not acknowledged by any form of government. Job security and personal gain are used to measure this, focusing on those with and without job security who involve themselves in unreported employment, hidden from the state for tax purposes but legal in all other aspects. Whilst the informal economy is widely viewed as a social ill, Sassen (1997) describes it as a product and driving force of advanced capitalism and the site of entrepreneurial activities within urban economies, making it a pivotal phenomenon to observe whilst researching the general scope of unemployment in the borough.
Ultimately in subsequent blog posts, what I would like to do is identify how the changes to the welfare reforms, current and future economic investment in the Barking and Dagenham area, and the government’s emphasis on benefit claimants gaining work have changed the meaning of employment, in both the noun (as a label) and the verb (as an activity) sense of the word.
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