When is welfare really welfare?

There seems to have been a fair bit of argument in recent weeks about welfare, those who claim it and so on. The coalition is claiming that it is cracking down on the skivers. Some thing this is a good thing, others think it is all a smokescreen.

So what is the truth?

I think the pie chart (sorry I do not have the source, but it looks mostly credible) tells a rather interesting story. There is also a website devoted to covering this issue - http://www.neweconomics.org/mythbusters. It is a pity actual monetary figures are not used to support the pie charts, but they do tell an interesting story which runs counter to the current political narrative. No doubt a decent bit of research, which I do not propose to do at this point, would unearth the proper figures.

From a cynical civil servant perspective, all the political narrative about welfare is a complete farce and hot air. Unfortunately I do not just mean the coalition's figures either, the opposition are also being very disingenuous.

The truth is that almost every single government and opposition policy for reforming the welfare state is either pointless or will make the problems worse. They will either achieve little or cause counter-productive effects. The whole debate is about political ideology and has almost no grasp of the realities on the ground.

Let's be clear, the benefits system can be abused. A family containing 6 or more children, some of whom are disabled, with adults out of work will be able to generate a significant income from benefits. Distasteful and unfair as this may be, this type of claimant represents a rather small amount from the total benefits bill. However, it is far easier to try and implement policies that target these and other relatively small groups than it is to get to grips with the welfare system as a whole.

Fundamentally, you have to ask what is the government's total welfare bill going on and how much disposal income does it actually give people? For example, housing benefit in the pie chart above represents a significant chunk yet this is hardly likely to result in disposable income for the claimants as they are likely to pass it directly onto private landlords. In fact, if the bill really is this high, does it make the case to bring back council housing? Not only would government and local councils actually get a return from such housing (the old paying rent versus paying a mortgage argument) such a policy would assist in depressing rents and house prices. Not perhaps a popular outcome, but necessary if you want to reduce living costs and create a sustainable economic environment where people can live within their means and spend money in the wider economy.

I would also seriously question as to how much money is going into 'enablers' as part of the overall welfare budget. The government is currently paying hundreds of millions of pounds to companies dealing with job seekers, disability claimants etc. By any recognised measure, including from the government's own reporting, these companies are significantly under-performing to a degree that is a political scandal. Sadly, these companies and their management heavily influence and donate to the political parties so this sort of expenditure will not be reigned in which is a shame as a huge amount of money could be saved.

Whatever the 'facts' it seems to be a ridiculous state of affairs that the state is supposedly shrinking, with so much being privatised and yet the government is spending far more each year than it did when it had several national industries to manage. Where is all the money going? Apart from to the banks of course! Welfare is just part of a much broader problem. It is all politics, with spin and untruths flying everywhere and no coherent and credible plan with cross-party support for getting to grips with it. Sadly it serves a political purpose of providing a smokescreen that hides the enormous political failure of various government to be able to implement good policies.