It is a pleasure to be here in Bournemouth on the closing day of the Local Government Association conference.
When it comes to tackling Britain’s most challenging and entrenched social problems, I have long believed that answers are not to be found in Whitehall.
Despite good intentions, it is my belief that we achieve far less from sitting in ivory towers drawing scientific conclusions on social policy…
…and far more from listening to people on the ground, freeing up grassroots organisations to apply their insights, and working together with experts to deliver innovative solutions.
Across central and local government, we are currently in the midst of enormous cultural change…
… offering a real opportunity to seize the initiative, and push ahead with radical approaches.
Already, new ways of delivering services are coming to the fore – nowhere more so than in my area of responsibility: work, welfare and pensions.
In 2010, this government was faced with a pressing, even dire need for reform.
The Coalition inherited an economy at breaking point – £112 billion wiped off our GDP – burdened with the largest deficit in peacetime history.
Welfare bills out of control, having increased by 60%, rising even before the recession.
Yet worklessness and dependency were on the rise as well – in too many cases…
… a complex array of 30 different payments that meant too often, work simply did not pay.
For too many in our society…
…. for the 5 million on out of work benefits at its peak, a million for a decade or more…
… for the 1 in 5 households where no one worked…
… for the 2 million children living in workless households…
… the welfare safety net had become a trap.
Since 2010, across 44 programmes of change underway at the Department for Work and Pensions, our ambition has been a cultural transformation in Britain’s welfare state…
… restoring fairness and sustainability…
… but even more than that, renewing the incentive to get a job and helping people to overcome the barriers they face.
In short, every change has been designed to get Britain back to work.
I make no secret of the fact that change on this scale is not easy.
Far from it, for it involves both unpicking a benefits system of historic complexity, and a complete behavioural shift for those lost to its clutches for far too long.
Yet I believe this change is necessary if we are serious about securing a future in which everyone can share.
A stable economy matched by a strong society in which all can play their part.
Already, we are seeing the results of our efforts, with record successes in the labour market – better even than we might have hoped.
We now have record employment – up 1.7 million since the last election.
And we have more people working in the private sector than ever before, up over 2 million.
Less known – we also have falling numbers of people absent from the labour market… falling long-term unemployment…
… and, perhaps most importantly of all, the lowest rate of workless households on record, down 450,000 since 2010.
As the economy improves, this is where the real effect of our reforms is felt: British people reengaging with the workforce and regaining the opportunity to access the jobs being created…
… ensuring everyone who is able can play a part and realise their potential.
That is the context for welfare reform.
But I didn’t come here today to give a long lecture on the labour market, or to run through all of the programmes we are implementing.
Rather, there are just a few key points that I want to make – to my mind, the key messages for local government.
The first is about Universal Credit itself a significant change for local government…
… and an area where we are committed to working closely with local authorities… alongside local jobcentres, Housing Associations, community groups and many others…
I know, that the only way to ensure Universal Credit succeeds will be through genuine, integrated partnerships – working well at the local level, with local authorities as our clear delivery partners.
We’re absolutely committed to that delivery partnership operating model.
And as we deliver the programme, we will seek to innovate more. We want to enable DWP and LAs to:
- co-locate more as we share estate
- share data, more smartly, for better services
- build skills for sustainable partnerships
- share expertise to help more households back in to work
…as we enable exceptional local support services, built on evidence, experience and our collective leadership.
Together I believe local partnerships can be substantive, genuine, and integrated and that they can be resilient.
This is what will bring the essential public service transformation we need, to build a Welfare State fit for the 21st Century.
I would like to thank all our UC local authority delivery partners for the progress so far – and to encourage and welcome the innovation already happening.
This, I hope, makes clear just how fundamental local services are to Universal Credit…
… underpinned by the framework we are developing in collaboration with all of you, and the local government Association.
And it with this commitment to partnership that today, I am pleased to announce the next stage in developing support for Universal credit, delivered locally…
… that is, the 11 local partnerships that will be testing how best we deliver these life-changing outcomes.
From inner city London:
- Lambeth, Lewisham and Southwark
- Westminster, Kensington and Chelsea
To other urban areas:
- Derby City
- Dundee City
- Northumberland and south Tyneside
The rural areas of England: south Staffordshire and West Lindsey.
Argyll and Bute in Scotland.
And Carmarthenshire and Blaenau Gwent in Wales.
All 11 will be trialling innovative new approaches… be it:
Different types of co-location – multi-agency sites… one-stop shops… outreach in the community.
Different ways of tackling multiple problems – new digital data-sharing… one-to-one keyworkers… peer mentoring.
Or different types of intervention – referrals to credit unions… wifi in schools and libraries… using social media to keep in touch with individuals.
All of this, and more, is about developing a breadth and depth of evidence that simply has not existed before…
… measuring the effectiveness of different solutions, knowing what works, and sharing best practice…
… in time, making a real, and lasting difference to some of the most vulnerable people in our communities.
We’re not making the mistakes of previous administrations.
Because creating a benefit system for the 21st century needs to be done with care, not through a ‘big bang’.
And we are taking the time to work with LAs to make improvements as we go.
Thanks to the support of our delivery partners, we are making progress with a careful and controlled roll-out.
Expansion across the north west is underway. In little over 2 weeks, we have more than doubled the number of jobcentres taking claims to Universal Credit… and we are extending to 90 – that’s to 1 in every 8 Jobcentres – through this summer and into the autumn.
We have also started taking new claims for couples, with families set to follow later this year – delivering the full Universal Credit service in the north west.
Yet already, Universal Credit is working – delivering the major benefits that we always intended.
90% of claims are online.
Two thirds of claimants agree Universal Credit offers a better work incentive.
And with the vast majority of workers now used to being paid monthly, it comes as no surprise that 78% of claimants are confident about their ability to budget.
With time on benefits now resembling life in work, making that positive move back to work is no longer the huge upheaval it once was.
Yet we haven’t lost sight of the fact that there will be some individuals who do need more support.
And that we need to continue to listen carefully and work with social landlords, as we don’t want them to go into debt.
That’s why we’ve run projects to test what happens when claimants pay their own rent.
With the average successful rent collection rate at 95%, we found, of course, that a huge number of people are capable of managing their money.
Yet where people did have difficulty, direct payments opened the door not just to help with managing rent – but also to wider social problems that were previously out of sight…
Now under Universal Credit, decisions about whether tenants should receive direct payments are being made in collaboration with social landlords…
… meaning we retain flexibility for exemptions and exceptions, to make sure the system works for councils and housing associations…
… but also that we take the opportunity, for the first time, to tackle the entrenched problems causing difficulty in the first place.
For the vulnerable minority who cannot budget, cannot pay their bills, or are struggling to manage, having been left to languish in dependency for too long… the difference Universal Credit will make is transformative.
We will continue to work with you, to make sure there is flexibility for direct funding.
And so through targeted interventions, we are giving individuals the tools and the support to regain control over their own lives…
… regain security for their families…
… and hope for their children’s futures.
Yet already, even beyond the formal testing, local areas up and down the country are pioneering new ways of funding and delivering social change.
This brings me to my second point, for I believe one of the very best illustrations is the Troubled Families Programme…
… a complete overhaul in how we deliver services for the most disadvantaged families of all.
These are some of the hardest families to work with, the ones known to all local services – police, children’s services, housing associations and so on – but who have never before received the intensive, tailored support that can bring lasting change.
By putting the family first – looking at them as a whole and addressing their problems in the round – now the lives of over nearly 40,000 troubled families have been changed for the better…
… seeing children back in school where they were previously playing truant or committing crime; adults off benefits and into work.
For that, I want to thank all of you here today – for it is your efforts in landing this programme with frontline staff that have made it such a success.
The Troubled Families Employment Advisers have, I believe, played a crucial role…
… embedded as part of how Local Authorities approach the problem, and therefore making certain that work is seen as part of the solution and employment as an ambition for all.
Now as we look to extend the Troubled Families Programme from 120,000 to another 400,000 families, those once at the hands of piecemeal and inefficient social services will receive the intensive, tailored support that can bring lasting change.
As we press ahead, I have no doubt that local government will step up to the mark, with renewed commitment meaning we continue to see success.
Yet at the same time as congratulating all of you on these achievements, finally today I also want to talk about an opportunity…
One which I believe is the single most exciting development in how we deliver social programmes…
… and currently the greatest untapped opportunity now facing local government.
Let me explain how.
The UK has become a world leader in social impact bonds, that is: in measuring a given social outcome, putting a financial value on it and underwriting the return…
… opening up new funding streams by saying to investors: ‘You can use your money to have a positive impact on society, and you can make a return.
We now have 17 social impact bonds now up and running, 10 of which are financed by my Department’s £30 million Innovation Fund…
… started 2 years ago to test cutting-edge projects to help our most disadvantaged young people, intervening as early as 14.
We have financed these projects and seen a positive return on our investment. And we have been able to use them to trial the way a Social Impact Bond could work.
As a result, we have developed an enormous amount of knowledge and expertise. And the government has decided to extend this process… including through tax relief for investors.
Today, I want to make an offer to you, that my Department’s door is open to anyone looking to learn from our experience… we have established the Centre for Social Impact Bonds offering dedicated help to structure new projects and get them off the ground.
Promisingly, social investment bonds are now emerging across government departments, through charities, and now in some local areas as well – with Essex, Peterborough and Nottingham, amongst others, leading the way.
Centrally, we have pooled some £70 million, together with the Big Lottery Fund, to catalyse new social impact bonds.
And with cross-party support – led in its first year by the Labour MP, Graham Allen – we have established the Early Intervention Foundation to accredit programmes of work and provide a rigorous assessment of likely social returns.
With all of this work now converging, we are set for the dawn of a new era…
… transforming how we fund and deliver social change, most of all at Local Authority level – be it in the area of early intervention, remedial education, rehabilitation and recovery, or many more.
As I say, it is my belief that we are on the brink of a historic shift – the challenge is to grasp this moment.
If we can get it right, I believe social investment has great potential, for local government especially…
…. harnessing your commissioning power… empowering local decision-making… ultimately, releasing you from the central Government straightjacket.
In the first instance, that comes from the opportunity to greatly increase the amount of funding available locally, freeing councils from uncertain or limited central funds, by bringing in new investment from private sector companies, high-net individuals, and venture capitalists and more…
… groups who might never before have seen themselves as part of the solution for change.
But what’s more, social investment brings a whole new level of discipline and rigour to how that money is spent.
Because every pound is only paid out when providers achieve a result, it requires that spending has a demonstrable purpose… saving money previously spent on ineffective remedial policies, and instead investing only in proven programmes that change lives.
With all of us working together to commission and deliver social impact bonds, I believe there is a game-changing opportunity to transform ‘big ticket’ areas of policy – health, early years education, and more…
… but also to unlock much more independence for Local Authorities.
As I have said, now is the time to seize those emerging opportunities.
In straightened times, and facing tight budgets, all of us need to find new ways of tackling social problems…
… but we must be committed to making a lasting difference and prevent spending from simply popping back up further down the line.
By intervening early and efficiently, we prevent costs from building up later on.
By tackling problems in the round, we save money otherwise spent dealing with the fall-out elsewhere.
And by focussing on meaningful outcomes, we ensure that every pound has a demonstrable purpose.
It is Social Impact Bonds that can drive and finance this.
With our economy now growing again, and employment at record highs, we must no longer allow ourselves to accept that some in our communities are left behind.
Our aim must be to improve the chances of the most disadvantaged.
A welfare system that will catch you when you fall, but lift you, when you can rise.
Local services that get to the heart of the problem…
… offering individuals and families help to take control of their lives… moving onwards and upwards.
United by a common purpose and as delivery partners, this should be our aim.
Let us work together in years to come, to make it a reality.