“Everyday insecurity: Life at the end of the welfare state” - new NEF report

For the past 18 months the new economics foundation has been working with people in some of the most deprived communities in Birmingham and Haringey to explore their experiences of the government’s austerity measures and its ambitions for building a ‘Big Society’. The combined impact of welfare reform and public sector cuts are adding significant pressure to a system that was already buckling under the strain of growing demand and underfunding. As a result, in the short-term, charities and communities are under growing pressure to step in where the state has withdrawn. In the long term social crises are likely to build up leading to unsustainable human, social and economic costs.

This report presents some of the unfolding stories, testimonies and case studies of the people and groups living and working in an age of uncertainty and austerity. They speak of mounting challenges, growing social and economic costs, and the sober acknowledgement that the worst is yet to come. In Birmingham and Haringey demand for CAB services has risen dramatically over the past two years. In Haringey they estimate that demand has risen three-fold. In Birmingham, speaking just of the demand for help with reforms to disability benefits, a case worker noted: “in 2009, for the whole of the year, we had 472 appeals. In the first quarter of 2012 we are looking at 436”.

Unsurprisingly changes to benefits have become the main driver of demand at CABx. New rules and rates for Disability and Housing Benefits are of greatest current concern to people and the imminent benefit cap is a source of growing anxiety. These changes will affect disabled people disproportionately with 60 per cent of families set to lose part of their income. The DWP has listed Haringey and Birmingham as two of the hardest hit areas, affecting more than 1,000 families in each place.

At the same time as the demand for services at CAB offices in Birmingham and Haringey is rising, funds are dwindling. Most CAB offices are funded through a variety of sources, the two main areas of financial support are the local authority and legal aid. In Birmingham, local authority cuts have reduced the CAB’s budget for general, open access support from £600,000 in 2010/11 to just £285,000 from September 2011. This inevitably affects the quality of support that can be provided in the city.

“Reduction in funding has hit us, no doubt. We have had to reduce the hours that we are open… we are struggling. We have a £100,000 deficit going into 2012/13. Birmingham City Council don’t have any more money… it’s a limited service, capacity is reduced for generalist support. It’s not that we don’t do it, it’s just that we don’t do it as fully as we would like, or have done in the past.”

Cutting money to open access support also risks jeopardizing more tailored support for specific groups. This is because specialist advice given to people with mental health conditions, long term illnesses and impairments, or for people who have been in the forces, for example, are partly supported by the open access funding. From April 2013, when legal aid reforms come into force, Birmingham CAB will lose its 30-strong Legal Services Commission (LSC) team. As a result, specialist face-to-face support for some 4,000 people in Birmingham will be lost. Research by the LSE suggests that reducing eligibility for legal aid support will force growing numbers of people either to give up their legal cases, with obvious consequences for the equality of justice, or to look for other sources of advice, such as local authorities, trade unions and Jobcentre Plus.

However, the LSE notes that in the past where advice has been sought from these organisations, cases were more likely to end up in complex and costly litigation courts than if they had been dealt with by specialist organisations such as CAB: “The implication is that if legal aid is cut, poorer people who currently consult expert services will need to turn to alternate services whose track record in avoiding court or tribunal is worse than that of the independent professional legal services”.

Cuts to legal aid also risk undermining the more general support provided through independent legal advice centres. This is because the LSC teams, which have been working in places such as CABx, helped volunteers support people with less complex legal issues by providing training and ad hoc advice. The CAB manager in Birmingham fears that the loss of their 30-strong LSC team will result in a lower quality service overall, leading to fewer cases being dealt with efficiently and satisfactorily.

In Haringey the situation is not much better. Although the CAB is yet to have its core grant reviewed by the local authority, the fact that it has not been increased means that, with inflation, there is a financial shortfall each year in real terms. Over four years this represents a reduction of between eight and ten per cent. In addition, a lot of the smaller project based funding has been cut, which means that much innovative and preventative work has been stopped.

They conclude by noting three high-level issues facing public services:

• the offer of social security is being eroded, leaving people with less support at a time when it is most clearly needed.
• services have been reduced, but the demand for these services hasn’t gone away. In fact, changes across multiple services and benefits are intensifying needs and making demand more widespread and urgent.
• responsibility for social welfare is moving away from the state to individuals, small groups and charities. For many, this means increased financial demands and greater informal caring activity. In the long term it is likely to widen social inequalities.

For the whole report, see Everyday insecurity: Life at the end of the welfare state