Time to tackle tough issue of welfare reform

Mar 18 2008 by Staff Reporter, Western Mail

HE Westminster housing minister, Caroline Flint, was widely condemned last month for suggesting that those on benefit who make no effort to find work should lose their council houses.

But while her solution was a little too draconian, Ms Flint had put her finger on one of the major challenges facing society – the culture that “no-one works around here” which acts as a barrier to aspiration and depresses economic growth.

Yesterday a government adviser, Dame Carol Black, put a figure on that cost – £100bn, the same as the annual running costs of the entire NHS. About £12bn of that comes in direct pay-outs from the Treasury to those on incapacity benefit; the rest is made up of the cost of treatment and from lost earning power.

The Office for National Statistics has now provided a snapshot of the kind of culture to which Ms Flint was referring. It has examined communities, breaking down the population into blocs of 1,500. In some, seven adults out of every 10 are out of work, either claiming incapacity benefit or JobSeekers’ allowance. Streets and estates in Rhyl, in Swansea, in Wrexham and in Caerphilly are among those with the highest levels in Britain.

It is already well known that Wales, with its post-industrial legacy, suffers badly from high levels of economic inactivity. Getting to grips with the problem is difficult, and successive Governments, including this one, have talked tough but failed to make much of a dent in the numbers.

The consequences of inaction are obvious; there are tens of thousands of jobs in the Welsh economy, but matching those out of work with those vacancies is proving challenging. There is a skills deficit, which will not be bridged overnight, and taking on the “no-one works” culture isn’t easy either.

But if it is not tackled head-on, then the jobs will eventually dry up and re-appear in eastern Europe, India and China. Thousands will continue to squander their potential and spend a lifetime on benefits – at a social and economic cost we cannot afford.

The stick being wielded by ministers at the moment is the threat of a new assessment of claimants’ abilities to work. It may prompt some people to show a little more application in their search for jobs, and it may provide a better picture of the size of the problem (ensuring too that the genuinely ill continue to receive the appropriate payments).

The carrot that should come with it is greater investment in training and skills, always easier said than done, but absolutely vital if the strategy is to succeed.

The ONS figures we report today, together with Dame Carol’s report, show the scale of the challenge.

But it’s a challenge that must be met as a priority – sweeping welfare reform under the carpet again won’t be good enough.