Community allowance crosses another hurdle

Speech at DTA National Policy Symposium
Naomi Alexander

Hello Everyone. My name is Naomi Alexander and I’m here to talk to you about the CREATE Consortium’s campaign to establish the Community Allowance as part of the UK benefits system.

Our work focuses on the intersection between the benefits system and community regeneration.

The story of the Community Allowance started back in 2001 at the first meeting of the National Community Forum, when all 24 community activists from across the country unanimously agreed that the benefits trap was one of the biggest barriers to achieving neighbourhood renewal.

The benefits trap is an unintended result of the benefits system as it is currently structured. The cost to the nation goes far beyond the impact on individual benefits claimants and their families. Whole communities are caught in this trap and so too are our attempts at neighbourhood and civil renewal.

We spend £92 billion a year on benefits payments.

Not in administration, not in employment support, but the actual weekly payments.

This £92 billion is the national bill for the most elaborate and complex poverty trap imaginable. It provides few stepping stones to avoid or escape the trap.

At the heart of the trap is the ‘earnings disregard’, which is the amount you are allowed to keep on top of benefits if you do part time work – literally, the earnings disregarded by the benefits system.

Shockingly, for people on Job Seekers Allowance, the ‘earnings disregard’ still remains at the same level it was in 1988: £5 a week – less than an hours work on today’s minimum wage.

I’m sure I’m not the only one in this room to see a cruel injustice in a country that has allowed MPs to freely dip into the public purse to fund lavish lifestyles, spending £600 on pot plants. While someone receiving Job Seekers Allowance of £60.48 a week will have penny for penny taken back by the state for anything they earn over £5.

Not only that, but people who declare paid work that is less than 16 hours a week can have their payments thrown into chaos for months, often leaving them with nothing to live on and facing threats of eviction.

Where is the incentive to get try and back into work? And what does this system say about the way we view benefits claimants?

I’d like to show you a short film we made last year about how these issues are played out on one estate in Milton Keynes.

Through the Community Allowance campaign we have been asking whether there is a way of seeing the benefits spend differently. Is it possible to see benefits as an investment in some of our most deprived communities, rather than as a drain on tax-payer’s money? Could we see it as a hand up and not a hand out?

The Community Allowance is a proposal to enable community organisations to pay local unemployed people to do part time or sessional work that strengthens their local community and for those people to be able to keep their benefits and keep what they earn on top of their benefits, up to a maximum of £86 a week, which is the equivalent of 15 hours a week on the minimum wage.

If implemented, the Community Allowance would provide small, manageable and supported stepping-stones for people to begin the journey off benefits and into work.

At the heart of the Community Allowance is part time and sessional work of the kind Lisa wanted to get going on her estate. As we all know, such work plays a major role in the community sector, with so many potential jobs that can help deliver positive change. Many of these jobs come in at under 16 hours a week, which if you’re on benefits, is the magical but somewhat random ‘safe’ number of hours you can work and have your benefits protected as tax credits kick in at this point.

What could be achieved if on every estate there were jobs for 2 hours running a lunch club for older people, 4 hours doing detached youth work, 3 hours doing community health work or 2 hours running arts or sports classes. We’ve all seen how this work can really change people’s lives!

However, policy makers attach a low value to this kind of community activity. It certainly seems that the DWP don’t always view it as ‘real work’ as it doesn’t fit their model of a 16 – 40 hour working week. Yet this kind of work can have a transformative affect both on the confidence and skills of the individual doing it and the community benefiting from the activity.

Since we started the campaign we have achieved a great deal through the work of all our supporters.

Over 3000 people have visited the Community Allowance website and we have attracted over 100 organisations to back our call for a Community Allowance pilot, most of who have written directly to James Purnell and Hazel Blears calling for a pilot programme.

Last summer, our intensive lobbying was rewarded with a commitment to pilot the Community Allowance in the Community Empowerment White Paper produced by DCLG – they have been fantastic advocates for the Community Allowance across Government.

In the autumn, the Department for Work and Pensions included a commitment to pilot the Community Allowance in the Welfare Reform White Paper for people on Employment and Support Allowance. This is a significant step forward in being able to realize our goal, but we still have a long way to go.

We are trying to achieve our ultimate goal of the Community Allowance for anyone on any benefit. Earlier this year we submitted a proposal to DWP’s innovative Right to Bid scheme, for £2.2 million to run a pilot programme with 15 community anchor organisations across the UK.

We’ve got through to the last stage of assessment and civil servants from across DWP are meeting next week to make a decision. We know that the Directors across DWP have been discussing the Community Allowance.

While its good to know we’re having an impact on DWP thinking, it’s important to keep in mind the wider context of the recession and the impact this is having on the lives of millions of people across the UK.

Yesterday I spoke to a manager of a Citizens Advice Bureau in Cornwall. He told me that since last year he has seen a 103% increase in enquiries related to mortgage repayments and repossessions and a 336% increase in enquiries concerning redundancy. Earlier this year Save the Children took the unprecedented step of giving cash handouts to families in the UK, something it usually reserves for disaster affected communities in developing countries. These are sure signs of a society under stress. The Community Allowance is needed now more than ever.

Despite this, both Labour and the Tories are still talking about bringing in ‘work for your benefits’ schemes.  Mandatory, full-time, unpaid community work for those who have been on JSA for more than two years. In the interests of state choice and procurement rules, this could be delivered by public, private or voluntary sector, ‘depending on who does it best’. I’m sure this audience would agree that using community work as a punishment for being out of work during a recession is a disastrous mistake. We need to make absolutely clear that we as a sector will not endorse it.

Community work can be a carrot not a stick. 15% of the population, or 8 million people, live in ‘deprived areas’, and changing those areas is not just about squeezing people into a job at Tesco. The costs of ongoing deprivation to society and the state go way beyond the welfare cheque – eating into our taxes across health, drugs, crime, prisons, housing, social work, policing, and the enormous burden to the future caused by poor educational outcomes.

The community sector has been saying for a long time that we need to show government just how much is saved by sustained, deep-rooted community work.

How much better would it be, how much more would we save, if the people doing the community work were those most at risk of the benefits trap?

This week we are pleased to announce that one of the UK’s leading think tanks, the the New Economics Foundation, will be conducting a Social Return on Investment study on the Community Allowance, thanks to the support of our funder, The Hadley Trust.

We’re going to incorporate the NEF findings with think pieces from leading lights on the left and right of the policy spectrum, including Julia Unwin who spoke earlier and Phillip Blond, senior advisor to the Conservatives. We will be taking this evidence to the three main political party conferences in the Autumn, challenging politicians to see how the Community Allowance can ‘lift’ a whole community, increase confidence and pride, bring out the best in people and stimulate local economic activity.

To sum up:

We believe we need to change our approach to worklessness in order to achieve neighbourhood renewal, community empowerment and social justice

We need to integrate welfare with regeneration, creating jobs for people who live in the area being regenerated.

We need to fight the old ideologies, not by saying ‘it’s not fair!’ but by creating a positive vision of how different things could be

We need to challenge Britain, the 4th richest country in the world to live up to its ideals and to use the Community Allowance to see the potential of benefits spend as an investment in our most deprived communities.

If you agree, we would love to involve you more in the work of the CREATE Consortium, especially during our work this conference season. Please get in touch and together lets work to make the Community Allowance a reality.

Thank you for listening.