In a major new report, the TaxPayers’ Alliance outlined the next stage for welfare reform in the UK, Work for the Dole. Despite the creation of over three million jobs between 1997 and 2012, the number of people in the UK out of work has remained stubbornly high, even in times of prosperity. Work for the Dole, a programme of mandatory participation in community work and training in return for the continued payment of benefits, is the next step in getting people off welfare and into work. Based on successful programmes across the world, it is estimated the scheme would lead to annual savings of £3.51 billion and help 345,000 people off benefits over time.
Work for the Dole proposes that, after a certain time, anyone claiming the Universal Credit should undertake compulsory activity or – if claiming Incapacity Benefit or Employment Support Allowance – activity that they are physically able to do. It would address the problem, as described recently by Lord Hutton of Furness, of those “who choose consciously not to work “.
Key recommendations:
- Participants in Work for the Dole would be required to undertake 30 hours per week of either mandatory community work, physical and meaningful attendance at a job search centre; work for a registered charity; recognised training; or work experience.
- For anyone already in work but claiming benefits, participation in Work for the Dole would top up their working time to at least 30 hours per week.
- Work search activity would continue alongside the mandatory activity. If placements are with a commercial organisation, then there must be genuine skills development – it cannot simply be free labour for the commercial company.
- The 30-hour benchmark may be adjusted downwards for people with childcare or similar obligations. For those with young children, pensioners or individuals with a severe disability there will be no requirement at all.
- Non-compliance with Work for the Dole activity requirements would automatically result in suspension of all Universal Credit payments. This is based on evidence from the U.S. that suggests this is required to make the scheme fully effective
Importantly, the length of time before someone is automatically referred onto the scheme would be dependent on their National Insurance (NI) contributions. Those with a history of paying National Insurance would be referred onto the scheme after up to two years of claiming Universal Credit while those with little or no history of NI contributions would be expected to participate after three months of claiming Universal Credit. This would give more latitude to those who have paid into the system and strengthen the contributory principle in out of work benefits.
The introduction of Work for the Dole would end the ability to subsist on benefits instead of seeking work:
- It is estimated that 575,000 people would be eligible for referral onto the programme on day one.
- The cost of initially administering the programme is estimated at £1.05 billion in the first year.
- The programme should rapidly lead to a gross saving of £3.51 billion per year on an on-going basis and a net saving of £2.46 billion in the first year.
- Based on similar programmes around the world, 345,000 will come off benefitsover time.
- Work for the Dole under the Universal Credit umbrella would remove the option of claiming benefits other than JSA and ESA (such as Housing Benefit and the Child Tax Credit) while not seeking work, which is currently possible
Polling has shown that the public overwhelmingly support the idea (net agreement of +75%) that those who can, should do full-time community service for their benefits. Even 59 per cent of benefit claimants themselves now think benefits are too high and discourage work. Current reforms as they stand are not enough to fix welfare dependence. Work for the Dole would eliminate a great deal of fraud and provide a powerful incentive to seek a proper job while at the same time helping participants with the experience and credentials needed to get them onto the job ladder.
Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:
“Welfare should be a safety net for people who fall on hard times, not an alternative to working. The Government is improving the incentive to work but they need to go further and remove the option of sitting at home and claiming benefits entirely. Taxpayers rightly expect something back for the enormous amount they pay for out-of-work benefits, at the very least a real commitment to find a job as soon as possible. You should have to work for the dole.”
Chris Philp, author of Work for the Dole, said:
“Despite the record number of jobs created in the UK economy in the last decade, welfare dependency remains a problem that costs taxpayers a fortune and ruins lives. Politicians of all sides acknowledge that that the current system encourages welfare dependency. Work for the Dole programmes in other countries have shown that this problem can be beaten and dependency dramatically cut. The public resoundingly back the idea that claimants should contribute for the benefits they receive and it’s time politicians caught up. Work for the Dole is an idea whose time has come.”
Frank Field, MP for Birkenhead, former Minister for Welfare Reform, responded to the publication by saying:
“Labour needs seriously to look again at Work for the Dole. The next Labour government must ensure that claimants are not simply left drawing benefit rather than having an offer of work. Benefit payments should help form the pool of resources to fund Labour’s future jobs fund Mark II.”
