Report summary

In this report SCVO presents third sector perspectives on the impact of welfare reform on the people and communities it supports in Scotland.

It is based on research carried out by SCVO during summer 2014. It builds on an earlier SCVO mapping study which reported in 2013, and uses a qualitative methodology: a literature review, interviews with charities and community groups across six key locations (covering a mix of urban, semi-urban, rural, and isolated communities in Scotland), and a Scotland-wide online survey.

Summary of findings

Impact of welfare reform on people and communities:

  • Confusion due to poor communication about changes to the benefits system
  • The reforms are aggravating existing problems facing people
  • Depression, fear & anxiety about the changes is commonplace amongst benefit claimants and their families
  • People are being punished unfairly within the current system
  • In-work poverty is a significant policy challenge
  • Welfare changes have a bigger knock on effect in rural areas where services are more dispersed

Impact on third sector:

  • Demand on the third sector from people seeking support continues to grow
  • Funding is not keeping up with demand
  • Helping people cope with welfare changes specifically distracts from core, preventative work
  • Frontline workers are struggling to keep up with changes
  • Errors and a lack of knowledge amongst DWP staff about benefit changes creates more work for third sector

Summary of recommendations

SCVO recommends:

  • Legislation, policies and strategies to ensure everyone has access to sustainable employment paying the living wage
  • A welfare support system that gives equal value to the range of ways in which people can contribute to society
  • Scotland moves to end the role of sanctions in our welfare system in its entirety
  • Clearer information to individuals and families to help them avoid sanctions or the loss of benefits within the current system
  • A specific rural strategy to support third sector and communities responding to welfare reform
  • Scottish Government to invest in capacity and sustainability of frontline, community-based organisations, through more open and responsive funding
  • A concerted effort to invest in building relationships and trust with an emphasis on smaller, community organisations
  • That the Christie Commission principles form the basis for any further powers over welfare that are devolved.

Introduction

This report presents evidence of the painfully detrimental impact our complex and failing welfare system is having on people’s lives. As vulnerable people increasingly find themselves reaching crisis point and trapped in an impenetrable maze of bureaucracy, they are turning to third sector organisations for help in record high numbers.

Inflexible assessment processes, poor understanding of families’ circumstances and the threat of continual reassessment is heaping stress and anxiety on to people, negatively affecting their health and leading families to destitution.

Sanctions are being applied more frequently, sometimes without any understanding of the real barriers to people finding employment. The threat of sanctions combined with benefit delays is pushing some people to extreme lengths, including reoffending and suicide attempts. The day-to-day struggle to survive is pushing people to breaking point.

A year or so on from the publication of SCVO’s first welfare mapping report, welfare reform is still the most talked-about policy issue affecting the third sector. It is having a particularly profound impact on key groups of people, including disabled people and women experiencing domestic violence. It affects their ability to connect to the labour market and to lead independent lives. It is also creating knock-on costs for public services and thwarting efforts to narrow the growing inequality gap in Scotland. Families and communities are in real crisis, many are already barely scraping by and some are left without any income. This must be addressed as a matter of urgency.

Findings

Impact of welfare reform on communities

  • Poor communication about changes to the benefits system

Many respondents cite lack of clarity and inconsistent communication about changes to the benefits system as causes of substantial stress, anxiety and confusion. Claimants are increasingly having sanctions imposed on them because of unwittingly failing to meet the complex requirements of the system.

 

  • The reforms are aggravating existing problems facing people

Lack of food is a primary concern and food banks are facing ever-increasing demand. The threat of sanctions is causing additional strain on some people and putting their relationships under serious, and sometimes irretrievable, pressure. For some ex-offenders, the threat of sanctions is also undermining their rehabilitation.

 

  • Depression, fear & anxiety about the changes

Some participants felt that the reforms prevent people from actively engaging in their communities owing to depression, fear and confusion. Frontline workers and agencies continue to report deterioration of people’s emotional and physical health and wellbeing owing to the reforms.

 

  • People are being punished unfairly within the current system

Many respondents stated that the current system is unfairly punishing people. The stigma attached to benefit claimants and people living in poverty strips confidence and fails to recognise the very real barriers to work being experienced by many claimants. These, coupled with a lack of basic skills or practical support, mean that many people cannot complete the tasks required by the Department for Work and Pensions (DWP).

 

  • In-work poverty is a significant policy challenge

Many interviewees mentioned that the majority of available unskilled work is on a temporary and zero-hour contract basis, with many people juggling numerous part-time jobs in an attempt to make ends meet. This excludes them from benefits, pensions and mortgages, and catches them in a poverty trap.

 

  • Welfare changes have a bigger knock on effect in rural areas where services are more dispersed

There were specific issues relating to rural areas with lack of jobs, distance to jobcentres and training opportunities. Small savings through cuts to local buses or closing down local public services have had significant knock on costs for people in rural areas.

Impact of welfare reform on the third sector

The report findings confirm that welfare reform continues to present a significant and continuing challenge for many third sector organisations, especially smaller organisations providing services directly to people.

 

  • Demand on the third sector from people seeking support continues to grow

The vast majority of respondents (91%) reported that demand for their services has increased, with 76% reporting a significant increase. The increased demand extends to a number of organisations not normally associated with providing welfare or benefits advice. This places pressure on organisations to deal with additional work to mitigate welfare reform which was not anticipated or resourced.

 

  • Funding is not keeping up with demand

Despite an increase in demand, all but a few organisations have experienced a drop in funding or funding has not increased in line with demand. A common worry is the inability to find funding and/or time to evaluate and develop services or collaborative partnerships which might better serve people’s changing needs.

A lot of anxiety exists about the end of Scottish Government welfare reform mitigation funding in 2015. The ever-increasing competition for available sources of funding, the difficulties presented by short-term funding contracts and cuts in local authority budgets are all key concerns for organisations.

 

  • Helping people cope with welfare changes distracts from core, preventative work

Dealing with sanctions, benefit changes and cuts, and helping people to survive from one day to the next, means many charities have not been able to focus on building up people’s confidence, offer therapeutic support or other efforts to help people get back into work. This prevents some organisations from fulfilling their original remit.

 

  • Frontline workers are struggling to keep up with changes

Many of the smaller and/or independent organisations surveyed highlighted their inability to keep abreast of welfare changes and to attend training due to lack of resource and ever-increasing demand. Lack of IT equipment and literacy support to help clients with their Claimant Commitment (an outline of the job-seeking actions a claimant must carry out while receiving Jobseeker’s Allowance) was often cited as another strain on capacity.

 

  • Errors and a lack of knowledge amongst DWP staff about benefit changes creates more work for third sector

Administrative errors by the DWP are having serious consequences for claimants and are also having a knock-on impact on third sector services. Several interviewees expressed concern that the DWP system itself was not accessible to several groups of people who depend on its services. Some respondents reported a lack of up-to-date knowledge about benefit changes amongst DWP staff which can lead to disastrous consequences for claimants.

Recommendations

  • Throughout this research, frontline third sector organisations have suggested that decent work with a living wage is an important way out of poverty. They have pointed out how this will help many people restore self-belief, ambition, security, dignity and respect. SCVO recommends that Scottish Government, Local Government and wider public sector, the business community and third sector work together to develop legislation, policies and strategies that will ensure everyone has access to sustainable employment paying the living wage.
  • The report also highlights many other ways in which people can contribute to society, as unpaid carers, volunteers, and as individuals in their own right. Indeed, for some people paid work may not be an option. On that basis we would also recommend a welfare support system that gives equal value to the range of ways in which people can contribute to society.
  • Our research clearly outlines that the current benefit sanctions system simply does not work. It marginalises people or punishes them, often for circumstances beyond their control. We would therefore recommend an end to the role of sanctions in our welfare system. Politicians, governments, and institutions at various levels should work with third sector organisations to move to a more positive, supportive approach for helping people out of poverty.
  • In the short term, our research indicates an urgent need for the DWP at national and local level to address maladministration and delay within the current benefits system. We recommend that the DWP works with the third sector to provide clearer information to individuals and families to help them avoid sanctions or the loss of benefits that are simply due to problems with the system.
  • The research highlights the barriers people in remote and rural areas are facing: the lack of permanent jobs, a poorly structured labour market and the lack of effective access to employability support, exacerbated by the cost of living, as well as inadequate and expensive transport links. SCVO recommends a specific rural strategy to support people and the third sector organisations that help them in rural and remote areas.
  • The research demonstrates the pivotal role played by many smaller community-based organisations in meeting rising demand as a result of the welfare changes. They continue to face challenges in accessing funding, training and information to help them support their client base. Up until now, most support for third sector in tackling welfare demand has favoured a relatively narrow set of mainly larger organisations. SCVO recommends that the Scottish Government should specifically invest in the capacity and sustainability of frontline, community-based organisations, through a series of more open, responsive and less bureaucratic funding streams. The role of local government and the NHS in working with and supporting these organisations in their own response to welfare reform is also critical.
  • A clear finding from this research is the positive impact that comes from strong relationships and trust between statutory agencies and third sector organisations. These include relationships between community-based organisations, third sector networks, local authorities, the NHS and Scottish Government agencies. SCVO recommends a concerted effort to invest in building relationships and trust from both statutory and third sector partners, including with smaller, community organisations to recognise their part in both welfare mitigation and tackling poverty.
  • Finally, our report adds further evidence to the third sector’s view on the principles that should underpin welfare powers that may be devolved. By and large these principles reflect the Christie Commission’s proposals for a shift to prevention, community-based support and giving people greater control over the support offered to them. People’s ability to thrive, to progress and to be a respected part of their communities and the economy is undermined by a punitive system. SCVO therefore recommends that the Christie Commission principles form the basis for any further powers over welfare that are devolved to Scotland and sit at the heart of how they are implemented.

Conclusion

Government funding to tackle welfare mitigation should focus on ensuring people are prepared for and understand the current (and future) welfare support system. We need to ensure a greater emphasis on preventative approaches to welfare support. The third sector in particular, has shown that it plays a unique role here.

There are also clear messages here for the Scottish Government’s “fair work” portfolio, and what constitutes a good, meaningful job. This includes urgent action on delivering a living wage, and more sustainable employment opportunities, including people’s ability to connect to work, to their communities and to the wider economy. Concerted and collective action is needed and the third sector has much experience to bring to this table.

Finally, there must be opportunities with any further devolution of power to the Scottish Parliament to ensure that people who are dependent on social security are enabled to live a full and fulfilling life and not consigned to abject poverty, through no fault of their own. There is an opportunity here to build on the findings and work of the Christie Commission and the Expert Working Group on Welfare in particular. New powers must be used to do something quite different, taking a positive approach that helps people build their dignity, self-respect and confidence.