'Loss of faith' in welfare system

The welfare system should be reformed to recognise those who have paid in, a major report on the state of British society has said.

Jobseeker's allowance seems 'a derisory sum' for those who have contributed for years, a study has said

The welfare system should be reformed to recognise those who have paid in, a major report on the state of British society has said.

The study found that public support for the welfare system was dwindling and called for a more generous system to recognise claimants who have contributed.

The centre-left Institute for Public Policy Research's report said the "loss of faith" in the system was due to a sense that "contribution is no longer expected or rewarded".

It said: " Many people in Britain have lost faith in the benefit system. If the worst happens and someone loses their job, the social security system should be there to protect them against hardship until they get back on their feet.

"But most people think the British benefit system no longer offers enough protection for people who have paid into the system."

The Condition of Britain interim report, a wide-ranging survey of social policy, said: " The scale and scope of the benefit system has expanded dramatically in Britain over the last 50 years.

"But the British public has fallen out of love with large parts of the welfare system - unlike institutions, like the NHS, that retain deep popular support despite the many challenges they face.

"One clear example of how the system no longer offers real protection at moments of need is jobseeker's allowance (JSA), which is currently worth just £71.50 for those aged 25 or older. To people who have contributed to the system for many years, this can seem like a derisory sum.

"This is compounded by the knowledge that people without a recent work record are entitled to the same amount of cash through benefits like JSA.

"The implication is that the system does not recognise years of hard work and contribution - only immediate needs. Concern about the ability of new migrants to claim such benefits is emblematic of a deeper unease about the breakdown of the basic relationship between putting in and getting out."

The report suggests: " Rebuilding the popular legitimacy of the working-age benefit system requires institutional reforms that revive the idea of social insurance within the British welfare state.

"Turning contributory JSA and Employment Support Allowance into a distinct entitlement for those who have a recent work record and which is paid at a higher rate for a temporary period would make it clear what people can expect in return for their contribution.

"This would mark an important step towards drawing a clearer distinction between 'social insurance' for those who have paid in and means-tested 'social assistance' for people without a contribution record (which is integral to the more politically secure welfare systems in continental Europe)."

The report will be studied by Jon Cruddas, who is leading Labour's policy review ahead of the 2015 election.

The IPPR study rejected the assertion that Britain is "broken" although "it is clear that parts of our society are under enormous strain".

It called for a shake-up of family policy, with increased investment in children's centres and social clubs for elderly people.

It argued that universal childcare should be a key priority and could help more than a quarter of a million parents back to work and potentially boosting the nation's balance sheet by £1.5 billion.

IPPR director Nick Pearce said: " In our research, we have consistently found the family to be the critical point at which people's hopes and fears intersect. The recession made it vital to share resources in families, while recovery has been accompanied by deep anxiety for the future, particularly for young family members starting out in life.

"As society ages, and care needs rise, questions of inter-generational support and risk sharing will dominate policy debate. A new politics of the family is taking shape. At its heart is the question of how to fund, expand and reform care of children and the elderly, neither of which is currently well served by public services or private market."

A Department for Work and Pensions spokesman said: "For too long the welfare state was allowed to fail claimants, which is why we're fixing it so people are helped to get back on their own two feet.

"We are restoring faith in benefits. Universal Credit will ensure work pays and the benefit cap makes sure handouts are limited to average household earnings, so claimants have a clear route into employment and independence.

"The introduction of Personal Independence Payments is making sure support for disabled people is targeted at those who need help most and reforms to Employment and Support Allowance are ensuring help is there for those too sick to work."