Bright Blue, the independent think tank for liberal conservatism, has today released a new report, entitled Building up: the future of social security, which examines the adequacy, accessibility and fairness of the social security system for working-aged adults before, during and at the end of the pandemic.
The report uses both subjective and objective measures to evaluate the adequacy, accessibility and fairness of the social security system for working-aged adults, drawing on original data analysis, public polling and focus groups. It concludes with three new policies that will strengthen the social security system in the future.
It is the final report of a multi-year project which was guided by a high-profile, cross-party, cross-sector commission of leading decision makers and thought leaders, including Stephen Crabb MP, Shaun Bailey MP, Baroness Lister, James Johnson, and more.
Anvar Sarygulov, Head of Research and lead author of the report, commented:
“With the economy in trouble in 2023, the government needs to be proactive about strengthening our social security system. Universal Credit provides a strong foundation, but more work is needed to make the UK’s social security system more adequate, more accessible and more fair, and the right reforms can achieve this without breaking the bank.”
The Rt Hon Stephen Crabb MP, former Secretary of State for Work and Pensions, commented:
“The United Kingdom is going through a period of profound economic challenges. Our social security system continues to do much of the heavy lifting when it comes to shielding families from extreme poverty. But it is clear significant gaps and weaknesses in provision remain.
Bright Blue’s recent report shines an important spotlight into the current system and points to a pathway of reform. The proposed social security digital platform will improve accessibility to the full range of benefits and a serious discussion about a positive contributory system could open the door to a fairer system overall.”
We propose 3 policies:
Adequacy
Establish a new ‘minimum living’ income, which will be proposed by a reformed and expanded Social Security Advisory Committee, which will also recommend the levels and uprating of different social security payments to help low-income households meet the ‘minimum living’ income.
We recommend that the Social Security Advisory Committee should have the following new remit. First, to develop and annually update the ‘minimum living’ income benchmark for different types of households, just as the Low Pay Commission recommends different rates for different age brackets. It should be developed as part of a wide-ranging evidence gathering exercise, including both quantitative and qualitative research commissioned by the Social Security Advisory Committee, gathered through a call for evidence and in-person meetings with a wide range of stakeholders, including those who have experience of the system.
Second, the Social Security Advisory Committee should annually evaluate the extent to which the social security system is allowing different types of households to meet the ‘minimum living’ income. It should then make recommendations on the minimum level of uprating needed across the social security system to meet the ‘minimum living’ income benchmark. It should also conduct periodic reviews of various thresholds and caps within the social security system and to examine whether they are affecting people’s ability to meet the cost of living, such as the benefit cap. A benchmark should also be set under which benefits cannot fall below even if a sanction was applied to their recipient.
Ultimately, the decision on the level and uprating of social security payments for working age adults must remain a democratic one, meaning the body’s role will continue to be advisory.
Accessibility
The DWP should create a centralised ‘Social Security Digital Platform’, for all UC claimants, which acts as a single referral, application and processing platform for all benefits and grants available to low-income working age adults and allows UC claimants to have greater control over the frequency and destination of their payments.
We recommend that following the completion of migration of all legacy benefit claimants to UC, the government utilises the baseline IT system created for UC and expands it into a one-stop Social Security Digital Platform for all UC claimants.
The Social Security Digital Platform will contain the following functions. First, it will act as a single referral, application and processing platform for all benefits and grants available to low-income working age adults at the national and local level. Second, it will notify claimants of benefits when they might be eligible for more social security support, using their Real Time Information (RTI) data. Third, it will provide a significantly greater level of control to UC claimants over their UC award, specifically the frequency and destination of it.
Fairness
Create a new, higher-level and time-limited Contribution Element in Universal Credit, which is paid out to those who have paid a new additional, voluntary, National Insurance (Unemployment Supplement).
We recommend that, once the managed migration of UC is complete, the Government introduces a new Contribution Element to Universal Credit. The Contribution Element will be funded through, and its receipt will be conditional on, a new category of National Insurance (Unemployment Supplement) Contributions, which will be a voluntary payment from which employees could opt-out. The Contribution Element will replace the current New Style Jobseeker’s Allowance and Employment and Support Allowance.
Here are the key findings from our polling of the UK public, focus groups with UC claimants, Labour and Conservative voters, and original data analysis of the Understanding Society COVID-19 Study:
Adequacy
- The majority of the UK public support the idea that social security should be “meeting the cost of living”. 72% of the public cited this. This includes a majority of Conservative (68%), Labour (83%) and Liberal Democrat voters (80%).
- The UK public is strongly in favour of almost all claimant groups receiving more financial support through the social security system. Notably, those with long-term health problems and their carers (77%), low-income working parents (69%) and low-income workers who start their own business (61%).
- A high proportion of the UK public thought a typical benefit claimant received insufficient support during the pandemic for a range of everyday costs. Utility bills are the cost which is most likely to be identified as one for which the typical benefit claimant received less than sufficient support (43%), followed by food costs (38%), costs of replacing broken down appliances (35%), childcare costs (34%), housing costs (24%) and transport costs (21%).
- A high proportion of the UK public were dissatisfied with the support government provided to particular types of claimants provided during the pandemic. This included those with long-term mental health problems (43%), those caring for someone with a long-term health problem (42%), those with long-term physical health problems (41%) and low-income families with children (37%).
- None of the UC claimants in our focus groups felt the level of benefit payments they had received was adequate. As one participant described the Government’s UC support: “It wasn’t cutting it.”
- The number of existing UC claimants finding it more difficult to manage financially is higher than the rest of the population, but this narrowed towards the end of the pandemic. In 2018-19, 34% existing UC claimants cited this compared to 7% of the rest of the population. In September 2021 – towards the end of the pandemic – 21% of UC claimants found it difficult to manage financially, as opposed to 5% of the rest of the population.
- A significant minority of existing UC claimants reported that their personal debt was increasing over the last four weeks, although this decreased towards the end of the pandemic. In July 2020, 30% of existing UC claimants cited this, compared to only 5% of the rest of the population. However, this gap narrowed significantly in later months of the pandemic, falling to 11 percentage points in September 2021.
- A sizable minority of new and existing UC claimants report not being up to date with housing payments, although this decreased towards the end of the pandemic. In 2018-19, 27% of existing UC claimants reported this, as opposed to 7% of the rest of the population. However, there is a significant fall in the number of both existing and new UC claimants who report not being up to date with housing payments towards the end of the pandemic: only 13% in both groups report not being up to date on housing payments in September 2021, while 7% of the rest of the population reported being in this position.
Accessibility
- A majority of the UK public believe people who are eligible for benefits are not receiving them. 57% of the UK public agree that “there is a large number of people who should receive benefits, but are not claiming them”.
- UC claimants in our focus groups noted they struggled to access social security, blaming the complexity of the system, poor signposting and a lack of information. One participant noted: “People don’t know how to claim benefits… because they don’t know where to get the help from and it’s not made obvious.”
- UC claimants in our focus groups noted an element of stigma in the burden of presenting proof as part of the application process different benefits. As one participant noted: “It feels like you’re committing a crime” and another stated the process could be “quite degrading.”
Fairness
- There is majority support for a positive contributory principle in the social security system among the UK public (54%). Conservative voters are more likely (66%) than Labour (49%) and Liberal Democrat (40%) voters to support a positive contributory principle – where those who contribute more to social security receive more support. Conservative voters are more likely (66%) than Labour (49%) and Liberal Democrat (40%) voters to support a positive contributory principle.
- Adequacy, albeit narrowly, matters more than fairness, through the concept of contribution, for the design of the social security system. More (37% vs 30%) of respondents choose “the benefits system should prioritise helping people who are in a difficult position, even if they did not previously pay tax contributions into the system” above “the benefits system should prioritise helping people who have paid into the system previously, even if that means providing less help for people in a difficult financial position”.
- The UK public is divided in their view on conditionality. A narrow plurality of 37% of say that “the benefits system should prioritise helping people who are in a difficult position, even if they did not previously pay tax contributions into the system” comes closest to their view, while 30% say that “the benefits system should prioritise helping people who have paid into the system previously, even if that means providing less help for people in a difficult financial position”
- The UK public is divided on whether there should be conditionality in the social security system for those on a low income but already in work. 35% agree with there being no conditionality for low-income workers, while 33% agree with there being conditionality.
ENDS
