Rethinking Benefits

This is roughly what I said at Benefits Camp this morning. Thanks to Dom at FutureGov for giving me the excuse to think about it a bit.

I want to open up your thinking a little bit, but first it’s worth just reiterating why we’re talking about this now and why this can feel like such a frustrating area of policy.

Firstly, the demographics are only going in one direction. The number of people who will be entitled to benefits as they’re currently structured is going up. This terrifies Government because historically it has been such a difficult area to reform.

The economy is also — in the minds of people who make decisions about benefits — only going in one direction. GDP in real terms is going down and despite the rhetoric about a ‘growth agenda’, politicians and civil servants are preparing for a long slow period of stagnation.

This leaves us with a problem — there are less ingredients but the diners are all getting hungrier. It’s pretty depressing place to start but I just want to offer three ways to think differently. I think the only way that big systems like this change is by demonstrating that an alternative way of thinking about the problem can have better outcomes for everybody. Arguing inside the current system can be incredibly frustrating.

Think about different financial models

Some people talk about in terms of handouts, scrounging, allowances. But the aim of most benefits is to change things. Could benefits payments be investments where everybody has an incentive to make things work because their interests are aligned?

Or rather than looking at the benefits themselves, look at the costs of administering them and see if you could do it better. Just one example I’ve found is that the cost to Local Authorities of administering housing and council tax benefits in 2005 was about 5% of the total spent. That sounds quite good until you realise that cost was £880m.

Think about how this could work without Government

Think radically and without the constraints of the state having a monopoly on decisions about benefits. Look at what happens with foreign remittances for example. Developing countries receive $325 billion in payments from their relatives in other countries. That’s three times the amount that they receive in aid payments from Western Governments and some evidence suggests that it’s much better spent.

Think practically

My hunch is that nothing in this world moves because of evidence or logic. It’s a world of half-baked ideologies that barely mask some pretty hateful prejudices — on the part of almost everybody concerned. This means you constantly risk logjam if you follow the usual channels of protest or lobbying. I think the way to argue your case is to show how things can be better practically — creating new schemes where everybody benefits.

Leave a Reply

Your email address will not be published. Required fields are marked *