Money & Advice

Osborne indicates incapacity benefits 'to be cut'

4th Jul 2010

Ministers have signalled that incapacity benefits will be targeted in a summer spending review aimed at cutting the £155bn deficit. Chancellor George Osborne said he wanted to protect those in "genuine need" while encouraging those who could work, to do so. Over 2.5m people are on incapacity benefit or employment support allowance - costing about £12.5bn a year. Labour's Yvette Cooper said it was a "return to the Thatcherite 80s". The government has said that NHS and foreign aid spending would be protected as it seeks to tackle Britain's budget deficit, but other government departments face 25% real terms cuts.

'Trade off'

Mr Osborne has said that figure could be reduced, if more savings can be found in the welfare budget - on top of the £11bn cuts he has already outlined. Speaking at the G20 summit in Toronto, he said there would be a "trade-off" between cuts in benefits and cuts in public services such as the police, defence and schools. He identified incapacity benefit and its successor, employment and support allowance, as possible areas for savings. 

George Osborne Chancellor: 'We have got to look at all these things, make sure it protects those in genuine need, protects those with disabilities and protects those who can't work but also encourages those who can work into work.' The Conservatives pledged during the election campaign not to reduce benefits for the elderly, such as pension credit, free bus passes, television licences and the winter fuel payment.

Mr Osborne said: "We have given very specific commitments on some and we have not given specific commitments on others.  "That is what I want to be part of the spending review over the summer. It is a trade-off and some of these benefits are very much larger than most government departments. "We have got to look at all these things, make sure it protects those in genuine need, protects those with disabilities and protects those who can't work but also encourages those who can work into work. That is the purpose behind our welfare reform."

'Readiness for work'

Housing benefit, which costs £21bn a year, has already been targeted - with new caps on the amount people can claim. And in the Budget tax credits were reduced, child benefit was frozen for three years and medical tests introduced for the disability living allowance from 2013. In the coalition deal between the Conservatives and the Liberal Democrats, there was a plan to reassess all claimants of incapacity benefit and its successor, the employment and support allowance, for their "readiness to work".  

Lynne Featherstone Lib Dem MP: ' The previous Labour government tried to get people off such allowances and my experience as a local MP from surgery is that the 're-assessment' of people claiming has been variable at best.' Those deemed fit to get a job would be moved onto Jobseeker's Allowance instead - amounting to a cut in benefits and a requirement to seek work. The Conservatives have argued that one in five incapacity claimants is fit for work - about half a million people. Before the election they suggested that could save £200m a year. BBC political correspondent Norman Smith said that privately the government's view was that many more than half a million could be transferred to Jobseeker's Allowance.

'Ghettos of poverty'

For Labour, Ms Cooper told the BBC the government appeared to be going for "arbitrary targets to cut spending instead of actually a sensible process driven by the medical evidence to try to get as many people as possible back into work". She accused the government of cutting support for the disabled in the Budget and said its policies amounted to a "return to the Thatcherite 80s".

Equalities minister Lynne Featherstone has also expressed concern at the proposals. Writing on her blog, the Lib Dem MP said: "The previous Labour government tried to get people off such allowances and my experience as a local MP from surgery is that the 're-assessment' of people claiming has been variable at best. "We need to be sure that there is no perverse incentive to determine that someone can work when they cannot. We also need to be sure that those carrying out the assessment are good at it."

On Sunday, Work and Pensions Secretary Iain Duncan Smith said he wanted unemployed council tenants to be given incentives to move to areas where there are jobs. He argued that millions were trapped in "ghettos of poverty" unable to move for fear of losing their homes and people were "trapped" in areas with high unemployment. He said his plans were about assisting people, not forcing them to uproot. But Labour MP Louise Ellman, MP for Liverpool Riverside, told BBC Radio 4's Today programme the argument ignored the "need for regional investment in local areas". She said Liverpool had only just recovered from the "devastation" of the 1980s and investment was needed to build up industry and economies so people "have a job to go to and a stronger economy". "A policy that moves on moving people out just leaves devastation behind," she said. "What the government seems to be saying is abandon regional investment and encourage individuals to move out - if you can find the homes they can live in. That isn't a policy, it's going back to the 80s and we don't want that."

Source:  The British Psychological Society

Co-op deal opens up market to excluded

17th Jun 2010

People on low incomes will be offered affordable loans to help them pay for household electrical goods through a partnership between credit unions and The Co-operative Electrical.

The scheme announced today offers families an alternative to doorstep lenders and loan sharks, which over a year can cost 12 times more than money provided by a credit union according to figures by Association of British Credit Unions.

Through The Co-operative Electrical, part of The Co-operative Group, credit union customers will be able to access competitively priced products including washing machines, cookers, fridge-freezers, televisions, computers, digital cameras, sat navs and beds.

The scheme, which was initially piloted with Knowsley Mutual Credit Union, is now available through almost 100 credit unions with plans to extend availability to all credit unions in the UK mainland.

Once the credit union member has made their selection and had their loan approved, the credit union places the order and the item is delivered direct to the member’s home.

David Sanderson, commercial manager of The Co-operative Electrical, said: 'The impact of the recent recession has resulted in more and more people experiencing the restrictions of financial exclusion, paying the price for limited choice with interest rates and charges many times higher than those of mainstream personal loans.

'There is a need for an ethical and affordable alternative for purchasing those everyday goods that most take for granted. And, through our close relationship with credit unions we have developed a scheme that delivers greater choice and cost saving benefits to the financially excluded.'

Credit unions wanting further information about the scheme should email david.sanderson@coop.co.uk

Article by Rosie Niven, New Start Magazine

A fond farewell to Jan

12th Jun 2009

Bromley Mind had to recently bid a fond farewell to Jan Bereziuk, who was their Welfare Benefits adviser for over ten years, and has moved on to pastures new.

Jan worked incredibly hard to ensure that service users of Bromley were given a fair deal with their benefits, and will be sorely missed.

Taking his place will be David Feast, and we wish both David and Jan the very best of luck for the future.

Bromley Mind Welfare Benefits Advisory Service listing