Anvar Sarygulov is the Head of Research at Bright Blue.
With the public struggling financially, reports that Cabinet ministers are looking to find new ‘non-fiscal’ ways to combat the cost of living crisis were met with a significant degree of derision.
But it is good for Conservative ministers, and the departments they lead, to take a long, hard look at how to better use existing schemes which are already in place to support those on low incomes.
A particular area for improvement is the headache-inducing, byzantine quagmire of disparate state benefits, grants, and payments that support the most vulnerable in our society.
Currently, many government schemes which could be playing a key role in supporting families through this current crisis have low levels of take-up. Part of the challenge of increasing take-up is the significant administrative hoops low-income families need to jump through to access them.
First, they must be aware of their existence, and then also submit pages of personal information that the Government for the most part already holds. This creates an unnecessary administrative burden not only for the claimants, but also for the state.
For example, take Healthy Start vouchers. They provide weekly food vouchers worth between £4.25 and £8.50 to low-income mothers, from their tenth week of pregnancy to the fourth birthday of their child. In March 2022, this NHS-administered scheme had a take-up rate of 72 per cent in England and Wales.
That means that almost 150,000 households in need were not receiving a significant sum of money that could alleviate the need to visit a food bank – even though the Government holds most of the information needed to automate claims for the vouchers.
It is not only the state’s offer to help with costs of birth that are afflicted by low take-up, but also its offer to help with the costs of death.
The Funeral Expenses Payment, which provides help for costs of a funeral for those on low incomes, paid out on average £1,838 in 2020-21. But before the Covid-19 pandemic, the number of awards steadily decreased, from 40,000 in 2006-07 to 25,000 in 2019-20, despite the number of deaths increasing in the same period.
It is certain that there are low-income families out there who are missing out on thousands of pounds of support at a very difficult point in their lives, because of lack of awareness or the complex 25-page form.
There are also substantive concerns about the take-up of the support offered through the recently-introduced Household Support Fund, which provides low-income households with ad-hoc grants or vouchers through their local authority. Rishi Sunak committed a further £500 million to this Fund in the 2022 Spring Statement.
Each local authority, already greatly stretched in terms of resources, is responsible for the design and rollout of their own scheme. There are also barriers for low-income people to access it, who not only need to be aware that the Fund exists, but must also then submit information about their financial status.
The growth of the social security system over many decades has led to the accumulation of layers upon layers of complexity to address new and emerging needs. But the labyrinthine nature of our welfare system is now hurting both the government and those it is supposed to support.
In this context, the Conservatives need to be proud of the core achievement of Universal Credit: simplifying six disparate in-work and out-of-work payments scattered across three government departments into one streamlined benefit. Now they need to boldly continue their work in reducing complexity.
Rather than continuing to bolt-on new ways to support people, like the Household Support Fund, and growing the administrative behemoth that is our social security system, the Government needs to think much more about how it can use the existing benefit systems and information databases to provide simplified help to people who need it.
The changes to the Warm Home Discount scheme being introduced this year, which will use government-held property, benefit and tax data to automatically identify low-income households most in need of help with heating bills, is an example of what ministers should be doing across the social security system.
Getting more people to take-up existing schemes will not be sufficient to tackle the cost-of-living crisis given its scale: with inflation forecast to peak at ten per cent this year, but benefits only rising by 3.1 per cent this April, the outlook for low-income households is dire.
However, reducing complexity will still substantively benefit thousands of low-income households who are currently missing out on vital support, and it will be through simplifying bureaucratic demands and harnessing the power of technology that the Conservatives will make a difference and increase take-up.