Welfare Reform: Contextual Information

Summary

The impact of welfare reform is significant in the Glasgow context. Its impacts are seen in a variety of different ways. This includes the expanding network of food banks and the increase in those seeking homeless accommodation.

Evidence demonstrates clear linkages between growing deprivation and welfare reform throughout Glasgow, Scotland and the United Kingdom. This section will explore these relationships in more depth.

This information should also be viewed with specific consideration to the characteristics covered within welfare reform:

Due to the overlapping issues which contribute to poverty, this section should also be viewed in conjunction with the following:

 

Key facts and Figures: Glasgow

In Glasgow, estimates suggest a 20% reduction in payments from the Department for Work and Pensions (DWP). This is equivalent to £43.6 million.

In October 2008, Employment & Support Allowance (ESA) replaced Incapacity Benefit for new claims. Since February 2011 existing Incapacity claimants have been migrated to ESA.

The process assumes that 23% of claimants that previously received Incapacity Benefit would no longer qualify for ESA. Additionally, it assumes that at migration, 30% of people who no longer qualify for ESA would come off benefits altogether.

The potential loss of income to Glasgow as result of this process is estimated to be £259m a year, equivalent to £620 a year for every adult of working age in the city.

Source: Welfare Reform Committee, 5th Report, 2014 (Session 4) Report on Local Impact of Welfare Reform, Scottish Parliament, June 2014

 

Key facts and Figures: Scotland

Research by Sheffield Hallam University (commissioned by the Scottish Government) estimates that due to welfare reform, as much as £1.6 billion will leave the Scottish economy this year. This is the equivalent of £460 per year per adult of working age in Scotland.

Source: Sheffield Hallam University. 2013. The Impact of Welfare Reform on Scotland.

 

Geographic Disparity

Research demonstrates the role an individual’s geographic location has upon their experience of welfare reform.

For example, Calton (in Glasgow) will lose up to £880 per person of working age, whilst St Andrews (in Fife) will lose £180 in comparison.

It should also be noted that Scotland accounts for 10% of sanctions within the United Kingdom, despite only comprising 8% of the total population.

Source: Sheffield Hallam University. 2013. The Impact of Welfare Reform on Scotland.

 

The Claimant Commitment

From the 14 October 2013 the DWP began the rollout of the Claimant Commitment. This initiative demands that claimants provide evidence demonstrating they have met certain work-related criteria. The commitment must be signed by new JSA claimants, Work Programme returners and recipients of Universal Credit.

There are four work-related requirements:

  • The work-focused interview requirement
  • The work preparation requirement
  • The work search requirement
  • The work availability requirement

Should an individual not meet any of their agreed upon requirements, they may face sanctions and subsequently, a reduction in the amount of benefits they receive.

Source: Citizens Advice Bureau. 2014. Universal Credit – The Claimant Commitment.

 

Sanctions

The Improvement Service produced a briefing note in March 2014 examining JSA sanctions. Among the key findings:

  • Across Scotland, 42% of JSA sanction decisions resulted in adverse decisions, rising to 50% in the West of Scotland DWP district.
  • Across Scotland, only 2% of all adverse decisions were appealed against.
  • Across Scotland the majority of JSA adverse decisions concerned low level failures.
  • Across Scotland young males were disproportionately subject to JSA adverse decisions (also noted in section on Age).
  • The revised sanctions systems for JSA claimants, has seen a rise in the rate of sanction decisions which have resulted in cancelled decisions. By this, Webster (2013:6) suggests people are potentially being driven off JSA. Insofar as they may cancel their JSA claim once a sanction has been applied, regardless of whether they are in employment or not.
  • Across Scotland, 27% of ESA sanction decisions resulted in adverse decisions, rising to 30% in the East and South East DWP district.
  • In regards to ESA, across Scotland 1166 separate individuals were subject to adverse decisions; of these, 75% were receiving their first sanction.
  • The Improvement Service estimated that across Scotland, JSA sanctions from 22 October 2012 – 30 September 2013 may have resulted in a financial loss of £26,547,736.
  • The Improvement Service also estimate that across Scotland, ESA sanctions from 3 December 2012– 30 September 2013 may have resulted in a loss of £170,956. Both figures represent the maximum potential financial loss and are subject to caveats.
  • Consequential local impacts may include increased demand for council services, placing increased pressure on the local authorities throughout the country.
  • However, it is widely recognised that supporting affected claimants is not the sole responsibility of local authorities. Examples of good practice include cross-partner working with Community Planning Partnerships and other stakeholders to help support those impacted by sanctions.

Source: House of Commons Work and Pensions Committee, The DWP’s updated statistics on JSA Sanctions: What Do They Show? Webster, November 2013.

Research by GCPH details the adverse impact of JSA sanctions in Glasgow, Lanarkshire and East Dumbartonshire, in comparison to the UK average.

Source: Department for Work and Pensions, 2013c, in GCPH Impacts of Welfare Reform on Lone Parents moving into work.

 

Mental health

Broader research highlights linkages between the economic downturn in 2008 and the rise of suicides across Europe. Although not necessarily related to welfare reform, it demonstrates the impact financial pressures have upon people throughout the world.

The research, recently published in the British Journal of Psychiatry, suggests the financial crisis has been linked to more than 10,000 people taking their lives across Europe and North America between 2008 and 2010. As an overview:

  • Data was derived from the World Health Organisation, focusing upon suicide rates in 24 EU countries, America and Canada.
  • Suicide rates "rose significantly" after the 2007 crash. With the increase four times higher among men.
  • Between 2007, when the economic crisis began, and 2009, suicide rates in Europe rose 6.5 per cent. The rates remained at this elevated level until 2011.
  • This corresponds to an additional 7950 suicides than would have been expected across these EU countries.
  • Co-author Professor David Stuckler, of Oxford University, said: "In these hard economic times, this research suggests it is critical to look for ways of protecting those likely to be hardest hit."

Source: Economic suicides in the Great Recession in Europe and North America, Stuckler et al, in British Journal of Psychiatry, June 2014