SCVO publishes first in a series of reports on welfare reform

Scottish Council for Voluntary Organisations (SCVO) has published today the first in a series of three reports on welfare ‘reform’ by Dr Jim McCormick, one of Scotland’s leading public policy experts.

The report identifies ways to help mitigate the devastating effects of the welfare cuts and the UK Government’s Universal Credit policy.

Martin Sime, chief executive, SCVO said: “It’s critically important that we find ways to mitigate the impact of these draconian cuts. This report offers solutions to some of the problems surrounding Universal Credit. If the UK Government is serious about helping people and reducing the pain caused by their plans then it must pay attention to these proposals and take action quickly.

“As well as offering potential solutions, the report will help to open up debate about how we can mitigate the effects of the cuts and what shape a Scottish welfare system might take.

“Welfare cuts, high unemployment and a flat economy mean that more people than ever will be turning to third sector organisations for help, advice and practical support this year. Unless the UK Government addresses major concerns with their Universal Credit due to be introduced in October, there will be even more pressure on already stretched third sector services and more hardship in our poorest communities.”

Key concerns and potential solutions:

With the Westminster agreement that Universal Credit and most working-age benefits will be pegged at below inflation increases (1%) , poverty levels for working-age people and for families with children are likely to considerably surpass previous projections

Universal Credit is an all-or-nothing reform. Getting it wrong means people will face delays, errors or cuts to their sole source of income without support from other benefits. Serious design flaws must be addressed (see table below of issues and potential solutions)

A single payment into households rather than individual benefits raises questions about resource-sharing and risks for vulnerable women in particular

Investing more in advice and support services, as well as income maximisation programmes, can show a return on investment of at least 10:1. Expanding work in this area should be considered as a minimum mitigation response

A new Financial Security Change Fund could help to maximise available resources and extend effective approaches more widely. It should be established with matching contributions from the financial services sector in Scotland, for example to support the take-up of simple bank accounts and from domestic energy suppliers to ensure customers who currently pay the most are switched over to the cheapest tariffs.

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