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Welfare reform and the regeneration challenge.

In recent weeks it has been almost impossible to hold a conversation without the issue of welfare reform cropping up within a few moments. This is as true of personal conversations as it is in the workplace. As the deadline for the ‘bedroom tax’ and Universal Credit approaches, the enormous ramifications of the proposed changes are finally entering our collective consciousness. I am from a generation where the provision of welfare has steadily advanced and the security net offered by the state has been extended to cover all sections of the population. This does not mean it has been taken for granted but the contract between the citizen and the state has been predicated on the protection of those whose circumstances prevent them providing fully for themselves and their families.

This ‘social contract’ has provided stability and social cohesion for over 60 years and has informed public policy in health, housing and education. The New Right critique of the 1980s failed to reverse the development of welfarism and the latest reforms are a more dangerous assault on the very principles of the democratic welfare state. The premise advanced is that we can no longer afford the welfare bill and that it has grown to overwhelm the contributions of the citizen. There is some truth in this claim but it is not the result of massive idleness on the part of the population. It is rather the consequence of a growth in inequality that now suggests that Britain is a more unequal society than since the times of Dickens. As the largest number of people have seen comparative incomes fall, the metropolitan and financial elite have seen unprecedented rises in income and wealth. For the greatest number of hard-working people wages no longer cover costs and the last twenty years has seen expenditure subsidised by household debt and an unsustainable tax credit system.

The malaise in Britain is not lazy, workless families but poor wages and the existence of large swathes of the country where there is unemployment and under-employment. The transformations in the labour force have seen the disappearance of traditional well-paid working class jobs and their replacement with precarious temporary and part-time work patterns. The consequence is a low wage economy, a low income tax yield and a requirement for the state to top up income through a complex tax credit system. The latter is effectively a system of subsidy for the private sector in the UK. The emergence of a political view that suggests the poor are solely identified as workshy, dysfunctional families and individuals is socially corrosive. Spurious arguments about ‘fairness’ are used to delegitimise the very concept of welfare.

So what are the consequences for the regeneration of communities in Wales? The first challenge will be the aggregate affect of loss of family income. The health of the local economy is largely dependent on household expenditure and we can see the difference that disposable income creates by comparing e.g. Cowbridge with Pontypridd or Chester with Rhyl. In a recent conversation, one director of a local housing association has modelled that the bedroom tax alone will hit a small housing estate with a £27,500 annual reduction in income. Concerns emerging from the pilot Universal Credit localities suggest soaring debt as families struggle to contend with direct payment of housing benefit. Housing associations are already identifying risk to financial plans and a potential reduction in the regeneration related and social development actions they provide for tenants.

Risks more difficult to estimate derive from the threat to social cohesion that the reforms represent. The holy grail of housing policy for 100 years has been the creation and maintenance of settled communities. The welfare reforms create a scenario of residents of social housing moving repeatedly as their life stages advance. Caps to benefits threaten to deliver a social cleansing of the poor from areas of high rent values. Already London councils are looking across the UK for opportunities to rehouse their tenants. The response from Ministers is a dismissal of the concerns of housing professionals and exhortations to move home or take lodgers.

Growing up in the post war housing crisis, I recall too well the stress of living in ‘rooms’, until my family found refuge with a kind primary school teacher. The child protection implications of families taking lodgers once again is alarming and the scenario of a housing sector of pre Kathy Come Home insecurity, exploitation and family separation is truly alarming. In such a context, regeneration becomes impossible.

Hayley McNamaraNevertheless, here at CREW we remain determined to continue to support regeneration in Wales. We have been strengthened in our capacity by the addition of a new team member. Hayley McNamara has been appointed to a joint role as the Housing Led Regeneration Officer for CREW and Community Housing Cymru and commenced in January 2013. She previously worked as a Housing Project Officer at Torfaen County Borough Council working on a variety of initiatives including bringing empty properties back into use, reducing fuel poverty through developing retrofit schemes and improving customer engagement. Hayley graduated from her Masters degree in Town Planning in 2010. We will be revitalising the CHC Community Regeneration Network as a Housing Led Regeneration Network and Hayley is planning events relevant for the sector. Keep an eye on the CREW website at www.regenwales.org for further details of these and other events in the CREW programme. Forthcoming events include seminars on welfare reform, sport and regeneration, BIDS, financial resilience and shared space. We are also planning a rural regeneration conference for July.

Dave Adamson, Dave.adamson@regenwales.org


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