Headlines: August 12th, 1997

Social Security Minister Frank Field welcomed a suggestion by benefits staff in Exeter that local offices should have more flexibility in the use of budgets. Mr Field said: “I’ve been listening to how the staff in the South west region think we can best achieve our manifesto commitment of moving from welfare to work. The proposal they have asked me to look at is to move funds from welfare to opportunities, including education.” He made it clear that the suggestion excludes regional variations in benefit rates.Developing an active welfare system that promotes work incentives and reduces poverty and welfare dependency is one of the aims of the Social Security Department’s Comprehensive Spending Review. Frank Field is playing a key role in the Review which will be completed in about one year. He has been given a “carte blanche” by Tony Blair to revolutionise the welfare system and prepare it to meet the challenges of the twenty first century.

The difficulty of changing the social security framework without disadvantaging groups of claimants was highlighted by the barrage of criticism which met this early thinking on how the system might be adjusted to deliver the desired results. Paul Connery of the Unemployment Unit said: “The budget is inflexible. They are spending £93b right now of which only £3b is running costs and administration.”

Delegation of running costs budgets across central departments has been in vogue for several years, but programme expenditure is a different matter, because of the need to preserve equity. The ‘Exeter suggestion’ would result in varying payments to claimants, but at the same time it could lead to increases in effectiveness. It is this trade off between equity and effectiveness which will form a key decision area for the Review.