Fri 27 Mar, 2015 3:29 am
ephemerid wrote:There were a few posts yesterday about claims from the Tories that they have saved money on social security.
I've had a little think, and this is what I've worked out so far - bear in mind this is only what I know and there are so many different stats and budgets etc. it's difficult to keep track of it all, plus we have to account for spending too.
Also, what Osborne calls "welfare" and we think of as social security are two very different things. He includes things like social care (LA funded) and various NHS provisions in his definition (see the breakdown of how he defines it at the IFS website)
There has been no saving on JSA or ESA - because what's saved on one gets moved elsewhere.
In 2010, JSA cost £5BN PA. It's now down to £3.5BN PA.
In 2010, ESA/IB cost £12BN PA. It's now up to £13BN.
This looks like a saving of £0.5BN - but the Work Programme has cost £5BN.
There has been no saving on Housing Benefit - in fact it has increased by £5BN this Parliament.
Working people claiming HB are now more than a million (600,000 in 2010)
DWP claimed that spare rooms cost the taxpayer a million a day - £365M PA. DWP issued £345M in Discretionary Housing Payment funding to LAs in the first year. In theory, the saving in the first year would have been £20M once DHP was taken into account. But that would have been more than offset by increased rents in the private sector, so there is probably no real saving at all.
We are now spending more on in-work benefits for the low-paid than we spend on the main out-of-work benefits if HB is included.
There have been no savings in terms of what is actually paid out to claimants - the spend has increased overall.
What we don't know - because LAs funding is devolved for some things - is how much has been saved by cutting the block grants for local "welfare". Places vary, but most have cut social care and emergency provision for homelessness/domestic violence/care leavers etc.
NHS cuts have removed many community services for elderly and disabled people too; plus the changes to DLA have removed some people's access to services through the passporting system.
Osborne is quick to define "welfare" as all these disparate things when he is preparing his nasty little pie charts for taxpayers.
But he cannot claim - and neither can IDS - that any savings have been made on social security because they haven't.
Between them, they have shuffled people around on to schemes and programmes, pretending all those people aren't claiming JSA any more, when in fact they are but the payments they get are called something else.
The numbers claiming ESA haven't changed a jot - people are getting sick at the same sort of rate they always were; the bill is increasing because more people are being (correctly) allocated to the Support Group.
There are some savings on Income Support, but that's mainly because lone parents are being shunted on to JSA much sooner than before and are more likely to be encouraged to work part-time and claim tax credits and childcare - which saves very little if anything overall.
There are small savings on DLA - not because of PIP but because of DLA rule changes; the PIP claimant count is too small to register the effects yet, but the planned savings of 20% on an annual spend of £12.5BN will only net about £2BN IF it works as anticipated.
Osborne reckons he has saved £20BN. Not on benefits, he hasn't. He might have done on all the other things he includes in "welfare".
IDS reckons he's saved various hundreds of millions from various schemes and changes - but he's spent billions on "reforms".
My verdict is - they have failed to save any money whatsoever and have increased the overall benefit spend, despite removing income and other vital support from the claimants.
ephemerid wrote:Osborne will not tell the electorate how he plans to achieve the £12 Billion he says he will cut from "welfare".
If he cuts social security (and as we know his definition of welfare is very flexible) this is what I think he would do.....
The Tories have already announced no HB for 18-21's - I think this might be extended to 25-year-olds. They'll keep the bedroom tax.
They will freeze all benefits except pensions, claiming zero inflation as the guide for uprating.
They will keep sanctions; as time goes on, more people will reach the "3-strikes" rule and be out of benefit for 3 years.
They will remove the WRAG component of ESA - those claimants already have some time-limiting and jobsearch conditionality, and I think on those grounds he will bring all but the most seriously ill into line with JSA. That will reduce the conts-based ESA from 12 months to 6 months.
I think he will probably cut Support Group rate by about £5 to bring it down to what WRAG is now.
2 years ago, he insisted that the above-inflation uprating of sickness benefits applied to all of them. In fact, for ESA, that uprating did not apply to the whole of the various payments - it applied only to components, and the basic rate was uprated at the same level as other benefits.
I would expect more of this sort of sleight-of-hand from him if he gets back into office.
If he does these things, he could probably save about £4BN - so where would the rest come from? I suspect that Universal Credit will account for some more - there will be many more people subject to sanction; and in time Housing Benefit will be sanctioned when UC is disallowed.
There are also hundreds of thousands of people in self-employment now who will not have sufficient earnings to reach the UC income floor - they will have to give up their business if they cannot continue without the UC elements of tax credits and HB, and some of them may get sanctioned anyway for stopping work depending on the circumstances.
There is no question in my mind that he'll find a way to make these savings, and it will cause immense social hardship if not unrest.
We have to get these bastards out.