THINK TANK - The Ideas Zone....!!!, Welfare to Work

The Treasury is more evangelical about welfare reform than IDS

On Welfare reform the Treasury is even more evangelical than Iain Duncan Smith: but there is just one snag!

The need for welfare reform is understood and indeed welcomed by many. We are on the verge of a paradigm shift in the relationship between the state and the citizen. This shift is occurring in the place and at the point where the citizen requires most help from the state.

The emergence of a simpler, Universal Work – or indeed a Universal Life Credit – to replace the myriad of current benefits and to present stronger incentives to work will also require a root and branch change in the relationship between government departments, (DOH, DWP, DBIS, and Treasury).

Concern has been raised over the lack of detailed costs: will this cost £3bn or £9bn to implement?

There are no figures or costs to support the plans….. well that was true until the weekend when the Prime Minister announced that the huge amount of Error and Fraud in the system could be used to fund this wholesale reform. We know that The Department for Work and Pensions has carried out detailed work on the costs. However, it would be useful if the costs were apparent during the consultation process rather than after.

As some of you – older folks – will remember, the flaw in Frank Field’s 1988 plans was that whilst it was morally right, operationally it would cost the Treasury much more.

The Treasury is naturaly cautious when a department or a Minister says they can save money in the future if they get an increase now. The Treasury is even more repulsed when it is told that it should take the risk now in the hope of future gain…… isn’t this what providers are being asked to do but with much less certainty? ….. lets leave this alone for now!!

The task set for Iain Duncan Smith is made doubly difficult becasue the priority of the Treasury is to reduce the deficit.  In the words of David Laws ” I was born for this moment” : in this regard the Treasury is even more evangelical than IDS to cut dependency on the state and to reduce the deficit.

The mantra is “Reduce the Deficit, Reduce welfare dependency”; however the contradiction at the heart of the homogeneous mass is the realisation of the Invest to Save principle.

Inevitably, you have to spend more to save a bit.

Iain Duncan Smith could however still achieve a significant reduction in the welfare bill and it needn’t cost a penny more…..

…the answer is..


  1. haven’t we been here before with the Child Support Agency?

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