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‘No claims bonuses’ for employers and a jobs guarantee scheme as part of drive for ‘liberation welfare’ says Demos.

A ‘no claims bonus’ for employers that keep staff in work and off benefits should be at the heart of an aggressive Government drive to get people into work, according to a study published by Demos . 

As the full impact of the recession on jobs becomes clear Liberation Welfare says that the aim of the welfare system should be tackling unemployment, not curing problems like family breakdown, child development and community cohesion.

The recession exposed crucial gaps in the welfare state that, if bridged, will drastically cut unemployment, poverty and the budget deficit, argue the pamphlet editors. With 1.66 million people unemployed at the last count, the collection calls for the biggest overhaul of the £158bn welfare system for 20 years, based on the idea of ‘liberation welfare’.

 A liberation welfare state is based on the principles of power, reciprocity, and job and income security, with people encouraged to plan and save for financial shocks like redundancy. It says government benefits should be higher, but harder to claim.

Key policy recommendations for a liberation welfare state include:

 ·      ‘No claims bonuses’ for employers who rarely have staff moving onto benefits through redundancy: Employers would be incentivised and rewarded for hiring, training and retaining staff.  Similarly, the national minimum wage would continue to increase and a ‘fair wage’ clause would be reintroduced in public sector contracts, so the state only does business with companies paying a decent wage.

·      A lifetime savings account: Individuals must be encouraged to save money which they can draw upon in the event of unemployment. Tax relief on savings would be targeted at low- and middle-income families, rather than the very wealthy, and government would match contributions to the savings account, with the proportion matched decreasing as contributions rise.

 ·      A work guarantee for the long-term unemployed: People who have been out of work for two years would be guaranteed a job from the state.  They would be unable to chose to refuse this job and stay on benefits. There would also be increased expectations on disabled jobseekers.

·      Simplify the state pension system: The basic state pension and the state second pension would be merged to create a single tier, non-means-tested, basic state pension of £130 to £140 per week.  This basic state pension would be available to anyone who had made 30 years of contributions.

·      Scrap arbitrary benefit categories: There would be one benefit for people out of work and eligibility would judged by a person’s distance from the labour market, rather than arbitrary categories like ‘disabled’, ‘lone parent’ or ‘job seeker’.

 Co-editor of the collection, Graeme Cooke said: “Talk about ‘rights and responsibilities’ has passed its sell-by date.  Liberation welfare is about giving people power to control their lives and increasing their security in a more risky and uncertain world.

“As the general election approaches, the £160bn question is, do the political parties have the vision and courage to reform welfare so that it liberates people from poverty and unemployment rather than traps them in dependency?”

Liberation Welfare contains contributions from 19 experts.  Further recommendations include:

•  Housing benefits should be placed more firmly in claimant’s control and aligned more closely with other benefits
•  Employment and skills should be integrated into a single system to help people build careers, not just get jobs
• People with mental health problems should be given individual placement support to help them into appropriate work
• Disabled people should be in control of their support and resources
• Homeless people should be given the opportunity to help others as a way to encourage them to improve their own situations
• People with drug and alcohol addictions should receive highly personalised support
•  Benefit claimants and frontline advisors should have greater control over the money spent supporting people back to work

 James Purnell writes in the introduction to Liberation Welfare:  “This couldn’t all be done overnight - but all overnight reforms are regretted a few mornings later. As we come out of recession, we should take the opportunity to reduce the deficit and undertake fundamental reform, rather than indulge in tinkering that would increase costs in the end.”

Rob Murdoch, executive director of employment contractor, A4e, commented: “Building a welfare system that puts the customer at the heart of the process and also delivers better returns for the taxpayer are the two critical challenges for the UK. To achieve this we need to simplify the process, join up services around personal barriers not government departments, and instead of ‘doing things to people’ emphasise personal responsibility.  Making welfare personal is the key to reform.”

 Chris Melvin, Chief Executive of Reed in Partnership said: “As the economy recovers, we need a new approach to help the unemployed move into sustainable employment. This isn't just about personalisation and choice, it is about developing a welfare state which empowers people to take responsibility for their own future.”

 Notes to editors

Liberation Welfare is edited by Paul Gregg and Graeme Cooke, and contains a foreword by James Purnell MP.

 The collection contains essays from:

Eddie Bartnik is director of Metropolitan Community Support with the Disability Services Commission in Western Australia.

Dalia Ben-Galim is acting head of social policy at ippr.

Graeme Cooke is head of the Open Left project at Demos and was expert advisor to the secretary of state for work and pensions between 2008 and 2009.

Paul Dornan is senior policy officer at the Young Lives project based in the Department of International Development, University of Oxford.

Simon Duffy is director of the Centre for Welfare Reform and an associate of Demos.

Paul Gregg is professor of economics at the Centre for Market and Public Organisation at the University of Bristol.

Rob Harvey is research manager at A4e.

Mary MacLeod is a family policy advisor and former chief executive of the Family and Parenting Institute.

Clare McNeil is a research fellow at ippr.

Chris Melvin is chief executive of Reed in Partnership.

Rob Murdoch executive director of A4e and chair of the Employment Related Services Association.

Rachel Perkins is director of quality assurance and user experience at South West London and St George’s Mental Health NHS Trust.

Maff Potts is director of homelessness at the Salvation Army.

Miles Rinaldi is head of recovery and social inclusion at South West London and St George’s Mental Health Trust.

Michael Sherraden is director of the Centre for Social Development at Washington University in St Louis.

Jason Strelitz is a speciality trainee in public health with Southwark Primary Care Trust and was previously a senior research fellow on the Marmot Review of Health Inequalities.

Rhodri Thomas is head of communications and marketing at Reed in Partnership.

Demos ran a competition for members of the public who wished to contribute essays. Sarah Biggerstaff and Ian Forde won the competition and their essays are included in the collection.  Sarah Biggerstaff is deputy operations manager at Ingeus (formerly Work Directions) and Ian Forde is a public health doctor practicing in London.

About A4e

A4e is a private company on the front line of public services. A4e is the largest supplier of Department for Work and Pensions contracted employment services, community legal advice, generic financial guidance for the Financial Services Authority and telephone legal advice on behalf of the Legal Services Commission. Employing over 3,500 people and headquartered in Sheffield, A4e delivers front line public services from over 200 local, community based delivery locations including UK, Australia, France, Germany, India, Israel, Poland and South Africa. Over the last 22 years A4e has helped over 1 million people in their journey back into sustainable employment.

About Reed in Partnership 
Reed in Partnership is part of the Reed family of companies, the UK’s leading recruitment, HR services and training provider with 50 years' experience in this market place. 

Reed in Partnership Limited specialises in programmes designed to break down the barriers to employment. Since its launch the company has delivered services to support 150,000 of the hardest to help unemployed people, placed over 100,000 people into employment and worked with more than 20,000 employers, ranging from SMEs to large corporations. 

Media Inquiries

The authors are available for comment and analysis.  To request an interview contact:

 Beatrice Karol Burks, Press Officer

Beatrice.burks@demos.co.uk

020 7367 6325

079 2947 4938

Peter Harrington, Head of Communications

Peter.harrington@demos.co.uk

020 7367 6338

079 3966 413

This collection was supported by A4e and Reed in Partnership