Ed Miliband’s welfare speech: three talking points

Ed Miliband has given a high-profile speech on welfare. The BBC’s headline is that Labour would cap social security spending. But underneath the soundbite the speech covered a lot of ground. The Scope policy team considers what it might mean for disabled people:

1. Investing in better employment support will bring down benefit expenditure

Successive Governments have recognised that supporting more disabled people into work can bring down social security spending. But too many programmes have had the wrong focus. Scope has long been clear that the Work Capability Assessment doesn’t work; our figures show that only 1,000 disabled people have got a job through the Work Programme. Ed Miliband is right to make this a big issue when it comes to welfare. But he needs to be clear that the reason unemployment is high for disabled people is because there are barriers to the labour market and a lack of appropriate jobs – not because disabled people don’t want to work.

We need to assess what the barriers disabled people face actually are rather than focusing on whether someone is medically able to stand up in the shower.

And we need to make sure those barriers are met through a programme of support that works for disabled people and finds jobs that they actually want, rather than pushing them into low-pay, low-skill jobs that only work in the short term.

Here’s Scope’s thinking on improving employment support for disabled people.

2. Spending money on social care can reduce broader public spending

Ed Miliband wants to cap something called Annually Managed Expenditure (AME), public spending that fluctuates with the economy. Welfare spending is the main chunk of this, and this is the basis for the ‘cap welfare’ headlines.

Social care doesn’t come from this budget. But there’s a crucial link here. If disabled people don’t have the right support to get up, dressed and out of the house in the morning, they won’t be able to play a part in their community and the wider economy.

With the right support, disabled people will be able to to contribute more to the economy, creating savings in social security expenditure and generating tax revenues.

Rather than capping Annually Managed Expenditure (AME), Labour should invest in areas like social care that could make real savings across the whole of public services – not just welfare.

Scope’s research shows that for every £1 spent on support, £1.30 comes back into society – and 28p of this saving is directly reduces AME.

3. Some disabled people will always need benefits.

Miliband said: “We should also support disabled people. Those who cannot work. And those who want to work and need help finding it.”

This is really important, because disabled people will be concerned about the impact on their support of combining a shift to a ‘contributory welfare’ system and a cap on AME. Hopefully this means that when it comes to disabled people, Labour’s starting point won’t be “How much money do we have?”, but rather “What kind of support we need to provide?”

And hopefully the result will be plans for making this a better place for disabled people.

Seven things you need to know about social investment

David Cameron has today called for a major growth in social investment. Here are seven things you need to know about social investment…

  1. Big Society Capital defines social investment as  “the provision and use of capital to generate social as well as financial returns”.
  2. David Cameron thinks it’s a great idea and is throwing his weight behind it ahead of the G8 meeting of world leaders at the end of June. He recently told the Telegraph: “Britain and other developed nations face a shared challenge – sorting out our debt problems and achieving economic growth. We need to do this at the same time as improving public services and tackling our deepest social problems. That’s why this Government has placed such an emphasis on social innovation from charities, social enterprises and other businesses”
  3. Investors are increasingly looking to make ‘social investments’. According to JP Morgan the global market for social impact investment is estimated to be worth $9 billion and expected to grow to between $200 and $650 billion in the next decade.
  4. How is Scope involved? We were the first traditional charity to venture into the social investment bond space, blowing open the space for other charities. We launched our Bond in 2011, which offered investors a return of 2% and the opportunity to support our work making this a better place for disabled people. We raised £2m; and used it to fund new charity shops and seek new regular donors, which in turns provides us with a sustainable income for our network of parents befriending groups and info and advice service. Check out this blog from Tom Hall. The first tranche of the Bond is closed, but Richard Hawkes hopes Scope’s work will inspire others. “Charities can’t just rely on traditional donations. Investors are looking for ways to invest their money that has a social as well as financial return. We need to bring them together.”
  5. Why does a charity do it, it sounds risky?  Charities need a mix of income streams. The social investment bond creates an alternative way for people to support our work alongside the philanthropic loans and traditional donations. Donations are important; they support vital work on the ground. But charities also need to invest in activities that generate long term, sustainable income – such as fundraising or charity shops. Not every donor can fund these activities. But – as they generate income – it is perfect for a social investor, who wants to support a charity, but also wants to see a return on investment.
  6. How is a charity able to pay a loan back with interest? We are investing the money we raise in activities that generate long-term, predictable and sustainable income, such as our fundraising programme and our retail network. That means we can be confident that we can return the investment and also fund our work to make this country a better place for disabled people. Find out more about the impact Scope’s Bond had in this Investing for Good case study.
  7. So, what can be done to grow the market? Scope is also backing the launch of the Social Stock Exchange (SSE), a portal for social enterprises and social purpose businesses seeking to raise capital and for social impact investors wishing to find businesses that reflect their values.  The Government also has a chance to send a strong message with its proposed consultation on tax relief for social