People have ‘lost faith’ in benefits system

Many people in Britain have lost faith in the benefit system, according to a new think-tank report charting the major pressures facing families today.

The interim report of the Condition of Britain project, being conducted by the Institute for Public Policy Research, says many families fear for the future of their children. Most people want to work hard and contribute, it says – but they need to know that, in return, they will get support to find work, avoid hardship if they lose their job, and not fall into a spiral of debt if they need to borrow.

Key points

  • Too many people are excluded from the benefits of a decent job, which is one of the principal ways people achieve social integration, as well as earning a living. Long periods of worklessness can leave people feeling isolated, demoralised and unclear about their role at home or in wider society. The financial and emotional burden of long-term unemployment can raise the risk of family breakdown.
  • The social and financial benefits of work are diminished when jobs are poorly paid, insecure or lack status. Most people on low and middle incomes have not had a decent pay rise in the last decade, while the cost of essentials continues to rise sharply. Across society, families are facing levels of financial insecurity that can leave working people unable to adequately support their family.
  • Most people think the benefits system no longer offers enough protection for people who have paid into the system. Four out of five people believe the system doesn’t do enough to reward people who have worked and contributed; and half think it provides too little financial protection when people fall on hard times.
  • A majority remain broadly sympathetic to people receiving benefits, especially those who are victims of economic change and rising unemployment. But there remains a deep sense of unease that the benefits system itself disincentivises people from working or trying to improve their situation, even if they want to do so. And when people have to claim benefits, they often find the system excessively complex and unresponsive to their particular circumstances.
  • A lack of affordable credit is pushing people into expensive and unsustainable borrowing. As family incomes rise more slowly than the price of basic essentials, many people find themselves needing to borrow to make ends meet. However, there are few sources of affordable credit offered on the terms that many people need, especially after the abolition of parts of the discretionary Social Fund and their replacement by localised systems of help for the poorest.
  • Key questions highlighted in the report include: how to revive the national insurance ideal, of protection at times of need in return for contributions into the system; whether the distinction between ‘social insurance’ and ‘social assistance’ should be drawn more clearly in the benefits system, to distinguish between the need for temporary and longer-term support; and what the priorities are for shifting expenditure, over time, away from cash benefits and towards services and institutions.

Source: Kayte Lawton (ed.), The Condition of Britain: Interim Report, Institute for Public Policy Research
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Publication date: 
Dec 12 2013