Author: Dr Hannah Absalom
A recent report by Grand Union Housing Group (GUHG) highlighted how changes under the Welfare Act 2012 have impacted GUHG’s tenants and the organisation’s priorities. Some of the key points in the report, which can be found here bring to light the impossible circumstances many tenants are finding themselves in, which cause severe psychological and emotional distress. Furthermore, regulated landlords are spending significant sums administrating the gaps and flaws caused by the social security system reforms. GUHG is hosting a workshop in June to discuss collective case-making and a campaign; information can be found here.
This response piece draws out the hidden behavioural influence that informed the Welfare Reform Act 2012. We do this to complement GUHG’s report and to make visible the ideas that, in part, justified a punitive system of welfare. We conclude by highlighting that there are useful perspectives from insights into human behaviour and that these may inform a review of the social security system in the UK and how we undertake work in regulated housing.
From citizen social security to a focus on individual behaviours
The British social security system is informed by a long governmental interest in personal responsibilities and behaviours. Following World War II, a comprehensive system of “social security” was established based on the principle that citizens contribute to a shared safety net that can be accessed in times of need. This shaded into an explicitly conditional social security system under New Labour, where citizens’ rights to social security were balanced with an individual citizen’s responsibility to meet certain conditions of claiming social security (Dwyer and Wright 2014). The Welfare Reform Act 2012 intensifies conditionality, justified in part by assumptions that claimants have character flaws that are enabled by the ‘welfare system’. This is evidenced in a speech given by David Cameron (2011) to justify social security reform:
“We talk about moral hazard in our financial system – where banks think they can act recklessly because the state will always bail them out…
…well this is moral hazard in our welfare system – people thinking they can be as irresponsible as they like because the state will always bail them out.”
While conditionality and assumptions of irresponsibility enabled by social security were not new, a coordinated effort to bring new behavioural knowledge and an experimental approach into the process of policymaking was. In 2010, Cameron gave the green light to set up the Behavioural Insights Team (BIT), who, at this time, reported directly to the Cabinet Office (Halpern 2015). The BIT claimed to design policy based on how individuals actually think and behave, rather than how policymakers might want people to think and behave. Policy changes were to be evaluated through experimental means to find out ‘what works’ and save money on rolling out ineffective policies. The following section explores what went wrong with the intention to design and evaluate social security policy.
An overfocus on individuals and a lack of commitment to evaluation
The fields of research that provide insights into how humans actually think and behave are diverse (Whitehead, Jones et al. 2018). Insights can be applied at different scales, for example, at a systemic level, to inform regulation and taxation (Chater and Loewenstein 2022), to change institution and organisation processes (Einfield and Blomkamp 2021) and with an emphasis on individual behaviour change (Thaler and Sunstein 2009). What went wrong with social security reform was a disregard for understanding complex life circumstances and structural factors, such as the Economic Crisis of 2008 that contributed to the difficulties faced by many claimants (Dwyer and Wright 2014). This may have produced a tendency in the Welfare Reform Act 2012 to correct the behaviours of the ‘irresponsible’ welfare claimant.
This focus on individual ‘irresponsible’ behaviours is seen in elements of Universal Credit, such as the delay in being able to claim (a responsible citizen should have savings) and an emphasis on sanctions (a responsible citizen should prioritise and fulfil the conditions of claiming social security). GUHG’s report draws attention to the Act’s failure to consider the messy realities of lives lived on low incomes. We see this in Geoff’s story, who has no room left to cut back other than to save on the travel expenses to attend the job centre. Not attending would result in a sanction, so he is faced with the choice of a sanction or a gradual drip drip drip of debt. We are now in a situation where people in full-time employment are reliant on food banks (Baines 2023), so the idea of saving for the future seems absurd. Systemic problems are producing irresponsible environments where there are no good choices, with social security reforms a significant contributor to this.
Turning to look at the claim that behaviourally informed policies are carefully designed and tested so that implementation problems are identified and corrected. In a guide to developing public policy with randomised controlled trials called Test, Learn, Adapt (Haynes, Service et al. 2012), the iterative design of DWP IT systems is described:
“DWP legislation specifically allows the IT systems which deliver Universal Credit to include the facility to provide variations, to ensure that the department is capable of testing to find out what works, and adapting their services to reflect this.” (p28).
GUHG’s report describes through Ian’s story how a cycle of getting paid every four weeks, instead of monthly, throws a family’s income into disarray, causing both mental distress and financial hardship. This flaw in the system to account for alternative payment cycles seems a straightforward fix, yet it has not been corrected. Ten years on, it seems that the claim to test and improve the DWP IT systems is, at best, questionable.
There are complex arguments as to the failures of the Welfare Reform Act 2012 more broadly and the lack of commitment to make at least simple changes to claims processes. Bogue (2019) suggests that welfare reforms are, in one sense, working, if the intention is to introduce instability and make a life living on social security untenable. We take an optimistic view that insights into human behaviour can reveal flaws in current social security reforms and contribute to a case for a different type of system.
The behavioural critique of the Welfare Reform Act and an argument for behaviourally informed welfare reform
When researching my thesis that examined the use of behavioural insights in English-regulated housing, I developed a ‘Psychology of Poverty’ (PoP) insights framework. When these insights are used to examine the 2012 reforms, some key flaws become apparent.
First, PoP emphasises that people living in circumstances of poverty are not irresponsible. They tend to make more astute financial decisions about how to spend their limited income than the affluent would in the same circumstances (Mullainathan and Shafir 2013). Second, contexts of poverty produce situations where there are no good choices to make (Hickman 2021). This means that compromised choices must be made, such as choosing to pay rent or heating. Third, is that affluent people falsely assume that poverty is somehow character-building and that one becomes ‘thick-skinned’ and better able to cope. The opposite is true, and the longer someone is in poverty, the more harm it causes to their well-being, and capacity to escape poverty for good (Cheek and Shafir 2020). A final point is that institutions charged with alleviating poverty often unintentionally contribute to making poverty and the harm it causes worse. This may be due to a tendency to be ideologically led rather than making decisions based on the reality of people’s circumstances (Banerjee and Duflo 2012). An institutional tendency to focus on success may encourage distance and disconnection from understanding the messy realities of lives lived in constrained financial circumstances (Absalom 2023).
A PoP framework highlights that the Welfare Reform Act 2012 was based on a false assumption of irresponsibility enabled by welfare. Arguably by increasing financial insecurity, which is what the Act does, more impossible financial choices are created, and poverty becomes entrenched, causing deep psychological distress and producing dire situations that are hard to escape. Second, the focus on how institutions tend to make ideological decisions combined with a distancing success narrative may explain the lack of appetite to evaluate the effects of the Act and reform it. Ideologically, social security reforms were (temporarily) successful in reducing state expenditure, so there is no perceived need to evaluate and highlight discomfiting failures. This perspective suggests that both government and regulated landlords who are less reflective about the influence of ideology and the toxicity of the success narrative may be resistant to GUHG’s call for welfare reform.
Finally, attention is drawn to a small body of academic literature that makes the case for reforming social security through psychological insights. Curchin (2017) argues that PoP insights can make a case for strengthening the social security safety net. Essentially the stability provided by a security system that works enables people to move out of poverty. Room (2016) uses insights to make a case for kinder institutions that unlock the creative potential of people. At TAROE Trust (Absalom 2023b), we developed and adopted an emotionally informed understanding of the home. This perspective emphasises the quality of the built environment, the value of stability and how our sense of selves is shaped by our relationship with our homes. We advocate for collective working with insights into human behaviour and outline a rigorous approach to this in our Home as an Emotional Place report.
To conclude, it is possible to build housing and social security systems that reduce poverty and insecurity. Psychological and emotional insights can underpin how we think about reforming these systems and how we do our day-to-day work. It may feel like such a position is a distant dream, as the competing pressures facing the regulated housing sector are diverse and very real. We suggest that ignoring psychological and emotional insights is no longer tenable, and the regulated sector would benefit in the long term by joining TAROE Trust’s campaign ‘to put the heart back into housing’ and GUHG in their campaign for welfare reform.
Absalom, H. (2023). An Investigation of Behavioural Public Policy in Social Housing in England. unpublished, University of Birmingham.
Absalom, H. (2023b). Rethinking Regulated Housing in England: Home as an emotional place. University of Birmingham, Centre for Urban Wellbeing, TAROE Trust.
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