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For ESPAnet stream 3: Social Insecurity and Welfare Institutions - Edinburgh, September, 2012
Preventing Social Insecurity
Adrian SinfieldSchool of Social and Political Science, University of Edinburgh
Working draft for paper to be submitted to International Social Security Review,so please do not cite or quote without permission
‘It is the guarantee of security that matters most of all’ (ILO, 1984, para. 39). This central objective of Into the 21st Century: The Development of Social Security, the report of the ILO study group led by Pierre Laroque, gives high priority to preventing economic and social insecurity in developing social security, not only rescuing and rehabilitating those already insecure. The structural context within which social security policies have to work, particularly the quality and quantity of employment, and their interaction with other public programmes clearly have a major effect on their ability to prevent.
This paper seeks to argue that there is still much that can be achieved by social security systems with closer attention to what is needed to prevent insecurity and promote personal and collective security. It examines the ways in which the specific contribution that social security and protection can make to preventing social and economic insecurity have become weakened. Reasons for the relative neglect of prevention and the low priority given to it on the policymaking agenda are considered together with the changes that have led to a weakening of the preventive elements in social security systems specifically. Proposals to strengthen the preventive contribution in social security programmes are offered to promote greater debate of these issues.
The benefit collectively as much as individually from more effective prevention deserves particular emphasis, given the shift in many countries towards ‘individualising the social’ (Ferge, 1997) to the neglect of structural policies that promote fuller and better employment. Failure to build prevention into policymaking and to maintain may be part of the reason for the persistence of EU poverty even in the years of improving employment before the recent crises.
THE PREVENTIVE IMPACT OF AUTOMATIC AND INBUILT STABILIZERS‘The prevention of unemployment by a whole variety of measures should be a high priority for social security policy in the widest sense’ argued the Laroque group a generation ago for it clearly threatens security in market-dominated societies (ILO, 1984, para. 120). This broad strategy clearly requires many policies outside conventional social security, but there is much that it can contribute.
A good benefits system ‘works as an irreplaceable economic, social and political stabilizer in such hard times – both for individual lives and the life of society as a whole’ (ILO, 2011, p. 121). It provides people with ‘the confidence that their level of
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living and quality of life will not, in so far as is possible, be greatly eroded’ (ILO, 1984, para. 39). The fear of insecurity was well expressed by William Beveridge nearly seventy years ago: ‘beyond the men and women actually unemployed at any moment, are the millions more in work at that moment but never knowing how long that work or any work for them may last’ (Beveridge, 1944, pp 247-8). The knowledge that involuntary loss of a job does not mean automatic loss of income is an important support to those dependent directly or indirectly upon paid work across society. Being insured affects those in work, increasing their willingness to risk changing jobs and reducing the immobility that can, for example, inhibit expansion of new industries because workers from declining industries are fearful of moving. Both trade union and employer responses to changes in companies and in the labour market more generally are likely to be influenced by the degree of protection that is seen to be available to workers.
Benefits for unemployment act as inbuilt and so automatic economic stabilizers that work to support the whole society but the limited amount of recent research has concentrated on their economic value. Debrun and Kapoor’s analysis of data from 49 industrial and developing economies over 40 years led them to their subtitle: ‘automatic stabilizers work, always and everywhere’, ‘strongly contributing to output stability regardless of the type of economy’ (Debrun and Kapoor, 2010, p. 5; ILO, 2011, p. 4). Their partial substitution for earnings helps limit unemployed households’ drop in income and maintain purchasing power in the wider economy so that demand for workers does not fall even further, helping to prevent longer and deeper recessions.
A simulation of experience within the US and across 19 European countries ‘suggest[s] that social transfers, in particular the rather generous systems of unemployment insurance in Europe, play a key role for the stabilization of disposable incomes and household demand and explain a large part of the difference in automatic stabilizers between Europe and the US … Benefits alone absorb 19% of the [unemployment] shock in Europe compared to just 7% in the US’ (Dolls et al., 2012, p. 290; EC, 2012, p. 32). This clear difference emerged particularly sharply when the unequal distribution of unemployment across the labour force was taken into account - a factor not included in past researech so the divergence has not appeared as great.
Marked variations across the states of the USA and within Europe, with clearly lower effects in countries to the south and east, mean the stabilizing impact is by no means uniform or inevitable. ‘The more highly developed the social protection in a system and the more generous the social benefits provided, the greater the effects of automatic stabilizers on the economy are likely to be’ (Euzéby, 2010, p. 74). The preventive support of short-time working benefits, eg the Kürzarbeit programme (Hijzen and Venn, 2011), provides additional stability in some countries (although not included in stabiliser comparisons).
The extent that insecurity is avoided also varies within countries. Some schemes offer better protection to higher-paid occupations and little to groups more marginal to the labour market and generally lower-paid, thus reinforcing core and peripheral polarisation and the social exclusion of certain minorities. Others provide stronger – higher and longer - support for older redundant workers but higher contributory conditions and even age barriers for younger labour market entrants. While the general effect may help to stabilize the economy and prevent worse unemployment, the differential impact across groups can have wider implications politically and socially.
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The value and importance of social security in reducing the impact of increased unemployment and preventing further effects both on the individual and the wider society were little discussed in the years leading up to the credit crunch. ‘All in all, our results suggest that policymakers did not take into account the forces of automatic stabilizers when designing active fiscal policy measures to tackle the current economic crisis’ (Dolls et al, 2012, p. 290). ‘At least in the United States and some other countries, one of the sad facts of the so-called reforms in recent decades is that we have been weakening these important automatic astabilizers’ (Stiglitz, 2009, p. 4). The widespread failure to anticipate recent crises amid general governmental and expert euphoria only underlines the value of automatic elements already built in and acting instantly to prevent further problems.
The automatic destabilizing effect of the failure to prevent Rather than protect against insecurity, the inbuilt effect of systems with low benefits and increased conditionality automatically add to the unsettling, destabilizing effects of increased unemployment. Curiously, poorer benefits and greater concern for work incentives seem to foster a public and political discourse that ‘blames the victim’ out of work (Ryan, 1971). Detailed comparison of 18 ‘rich democracies’ led the US author to find in his own country ‘an unbalanced infatuation with trying to detect welfare disincentives and dependency’ instead of preventing poverty and economic insecurity (Brady, 2009, p. 142). In such countries the fear and shame of being out of work among those worried about losing their jobs is likely to add to general insecurity. With those out of work blamed for high and prolonged unemployment, the divisions and tensions in society grow and preventive strategies become diverted to preventing people remaining on benefits which has reinforced stigma. Yet research is clear that long-term unemployment is much more closely related to the lack of sustained labour demand than to the behaviour of individuals out of work (Webster, 2005).
In fact, poverty out of work is part of ‘a vicious cycle of disadvantage whereby people can be progressively marginalised from the employment structure’. This finding of one major cross-national study of unemployment drawing on European Community Household Panel surveys over time concluded: ‘the central factor underlying this process is poverty. Unemployment heightens the risk of people falling into poverty, and poverty in turn makes it more difficult for people to return to work. This process appears to operate in a similar way across the different countries of the EU’ (Duncan Gallie, Serge Paugam and Sheila Jacobs, 2002, p. ??).
This downward trend is not inevitable and can be prevented by a good benefits system with strong stabilizers. ‘Welfare generosity always has a larger effect on poverty than unemployment’ (Brady, 2009, p. 143; see also Martinez, 2001, p. 446). A comparative study of European Union countries also found: ‘the higher the level of expenditure, the lower the level of poverty’ among those out of work, irrespective of a country’s unemployment level (Cantillon, 2009, p. 232). ‘Rich, high employment countries where social spending is low end up with high poverty. This leads to the conclusion that, if it is possible to attain a low risk of poverty without substantial spending, it has not yet been demonstrated’ (Cantillon, 2009, p. 240; see also Bambra, 2011). So the preventive effectiveness of the automatic stabilizers of social protection is further confirmed by the evidence that low unemployment by itself does not ensure low poverty and so prevent the spread of insecurity.
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MAINTAINING EFFECTIVE PREVENTIONPrevention has not been sufficiently incorporated into basic and routine processes of most benefit systems even in the wealthy EU with its long tradition of social security. Minimum Income Systems by the core team of the EU Network of Independent Experts on Social Inclusion (EUNIE, 2009), shows how far many long-established benefit systems can fail to maintain security. It helps to explain why poverty persisted high in many countries in the better labour market years before the crises as noted by Cantillon (2011).
A prevention-focussed policy agenda requires close attention to changes in key elements as they can become substantial over time. For example, the average UK worker contributed 6.5 per cent of their earnings in the 1970s, today 12 per cent, nearly twice as much (Barber in TUC, 2012, p. 4). Then contributory-based benefits were received by three-quarters of those drawing any benefits while unemployed, now fewer than one-fifth. Maximum insurance benefit duration was cut from twelve to six months, and its value relative to wages fell by one-half to some ten per cent of average earnings. Insurance benefits against sickness and disability have been cut to a maximum of one year. Earnings-related supplements to short-term benefits, additions for dependents, short-time working and reduced benefits for an incomplete contribution record have all been removed. Public support has fallen with opinion polls reporting strong support for reducing benefit levels while the preventive capacity and stabilizing effect of the basic social insurance scheme have been considerably reduced.
The need for adequate benefits and their maintenanceAdequacy to protect against and prevent insecurity needs to be routinely checked, but it has slipped down the priority list in many countries and international agencies with little regular assessment of what benefits are adequate for (Veit-Wilson, 1998 and 1999). On most occasions adequacy is conceived in terms of reducing poverty or averting deprivation, not the more comprehensive and ambitious goal of achieving social and economic security and so preventing poverty in the first place.
Even in tackling poverty there are great differences across similar countries: many ‘socialise the responsibility of preventing citizens from being poor’ much more successfully than others (Brady, 2009, p. 8). ‘The clear conclusion to be drawn from most experts’ reports is that the level of minimum income falls short and often very far short of an adequate income’ (EUNIE, 2009, p. 30). Italy had no nationwide assistance scheme and, even then, Greece had very low payments, and only for families with children (EUNIE, 2009, p. 36). Social insurance benefits have traditionally been more generous than assistance schemes, but have also not been sufficiently maintained.
Preventive effectiveness is very likely to have worsened since, despite some countries’ benefit improvements in response to the credit crunch. First, ‘many member countries prioritise the incentive to work over ensuring an adequate level of income’ (EUNIE, 2009, p. ??), and increasing conditionality means even less attention to adequacy. Second, deficit reduction priorities cut public spending, weakening the automatic stabilizers, particularly in some of the poorest and most indebted countries. Even for the EU as a whole ‘the share of social protection expenditure in GDP is projected to decline slightly in 2011-13’ (EC 2012, p. 32). Benefit cuts are particularly counterproductive, weakening the preventive effect of demand stabilization and increasing the disadvantages of those already most vulnerable to poverty and insecurity.
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Routine monitoring and reporting of preventive effectiveness would reveal increased vulnerability to insecurity of certain groups and make clear how far minimum rates fall short of standards needed to protect against poverty for most in most countries. It could help to raise questions about the implications for the long-term costs to the individuals, the state and society. Comparative reviews in particular could lead to greater consideration of the wider context and, for example, the extent to which very low wages hold down minimum benefits.
Preserving the adequacy of benefits over time is vital to sustain their preventive effect. Yet many countries fail to do this, reducing the stabilising effect (EUNIE, 2009, p. 35). The effects of poor uprating barely visible from year to year can be significant over time. ‘Continuing with [current] uprating policies for 20 years, other things staying the same, would result in a near doubling of the child poverty rate’ in the UK. It would also ‘improve public finances by an amount equivalent to 3.6 per cent of national income. … While all groups will be affected, those with the lowest incomes will be hit hardest, causing widening economic inequality’ (Sutherland et al., 2008, pp. ???). Uprating should not be left uninvestigated as a minor technical issue but recognised as one of the most important decisions taken by ministers of finance. (Since then the uprating index for all benefits has been made weaker and child benefits have been frozen, both reducing protection further.)
Across countries ‘no single principle seems to govern uprating procedure. Instead, uprating involves compromise between a number of objectives and policy can fluctuate year-to-year as conditions and political priorities change’ (Sutherland et al., 2008). Long-term insurance benefits, and particularly pensions, are more likely to be adjusted in line with earnings, but other benefits only in line with price inflation, and some fail to get even that protection.
Uprating of earnings-related benefits may also be constrained by maximum ceilings originally set at a sum representing a high or adequate percentage of previous earnings but not since adjusted fully in line with earnings inflation. Once limiting only the highest-paid beneficiaries, the ceiling restricts many more, reducing more general preventive and stabilizing effects. In Sweden the 80 per cent of earnings ceiling for unemployment benefit has not been maintained since 1993 (Sjoberg, 2011, p. 221); in Denmark most unemployed are caught by the ceiling (Goul Andersen, 2011, p. 203). In the United States unemployment insurance ceilings were usually set at a sum equal to half previous earnings but have generally fallen in value over time.
Disregards (other income subject to a ceiling in calculating benefit) deserve special note since most countries spare little, if any, attention for maintaining their value (EUNIE, 2009, p. 12). They may remain unchanged for many years with a further, even if small, reduction in protection for many.
Take-up and administration Prevention of insecurity and poverty may be weakened if the benefits available are not received, however adequate their level. Even in the EU ‘non-take-up is a very widespread phenomenon that needs to be addressed much more systematically’ (EUNIE, 2009, p. 11): take-up failure renders the claimed ‘quasi-universal coverage … a rather biased perception of reality’ noted the Belgian expert (EUNIE, Belgium, p. 17). A significant shortfall of older people’s take-up of basic benefits in Spain, and even greater in Greece, indicates that ‘greater attention to non-take-up is more urgently
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needed than ever’ (Matsaganis et al, 2010, p. 23).
Take-up is more of a problem with means-tested benefits, although by no means confined to them. Governments’ greater reliance on means-testing increases take-up significance, especially given official and political pre-occupation with overpayment rather than non-take-up. Regular official statistics of take-up are scarce and usually only for individual benefits so that the total impact across benefits is not clear. However, the poverty of one in seven UK children in poverty in 2008 would have been prevented if they had received all the benefits and tax credits to which they were entitled (Child Poverty Unit, 2009, p. 1). Yet the UK government is now proposing to cease publishing take-up statistics.
‘The largest part of the responsibility’ for non-take-up lies with ‘the level of administration’ and not only lack of knowledge was the conclusion of a major Dutch study (van Oorschot, 2002, p. 185). ‘Well-targeted and intensive information campaigns by the bodies responsible working with local groups’ improved take-up in Nijmegen in sharp contrast to other areas similar groups of beneficiary but without these efforts.
The failure to inform and to assist in application may be made worse by discrimination and obstruction. Some countries reward staff for identifying welfare fraud and abuse but not for improving take-up. Assessment of effective delivery does not always include effectiveness in take-up. With continuing staff and training cutbacks to reduce deficits, fewer staff with less training deal with more applicants with less time to ensure full take-up. Higher priority to prevention requires closer concern with take-up in scheme design including publicity, application design and staff training that develops sensitivity to factors that lead to non-take-up.
The predictability and security of benefit support ‘Guaranteeing social security’, as the ILO goal puts it, requires a certain security and predictability of payments and services. Recipients need to be confident that benefits will arrive regularly and to be aware of the circumstances under which they might change or cease – points rarely acknowledged officially but well recognised by those working in welfare rights and advice and researchers in direct contact with recipients. Taking jobs and many other decisions that help to reduce insecurity and prevent it recurring are made easier and less stressful if recipients know how particular actions actually affect their benefits.
This discussion has revealed the many ways that shortcomings in routine policy procedures can almost invisibly undermine preventive effectiveness. These destabilising effects may play a major part in explaining the failure, persisting across most EU countries for nearly 40 years, to reduce poverty, even before the crisis and despite increased employment and incomes (Cantillon, 2011).
One final aspect of routine analysis deserves mention – the neglect of preventive effectiveness in evaluating programmes. For example, UK child poverty fell by 900,000 over twelve years, causing much debate over whether tax credits had achieved enough. As many again had been prevented from falling into poverty (Brewer, 2010), but this was virtually unmentioned. Other factors than policy changes may affect such numbers, but this applies to rescuing from poverty as much as preventing. It indicates the lack of a prevention focus that needs to be tackled if prevention is to be mainstreamed.
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Other changes have also served to both divert attention from prevention and further reduce its preventive effect. In many EU countries the shift to a ‘social investment state’ from a ‘welfare state’ has emphasised ‘work first’, ‘work as the best form of welfare’ and reducing ‘dependency’, with greater reliance on ‘sticks’ restricting benefits out of work rather than ‘carrots’ making work pay (MWP) with minimum wages and working tax credits. ‘Much of the thrust of labour market reform has been by reducing the level and coverage of social protection and tightening the conditions under which benefits are paid’ (Atkinson 2010 in Cantillon, 2011, p. 444). In these changes little attention has been given to the reduction in prevention.
By contrast, a more effective social investment strategy based on a strong structural perspective would support prevention upstream, building a social protection floor across Europe. ‘Adequate social security and efficient social redistribution are part and parcel of any effective investment strategy’ (Cantillon, 2011, p. 445). ‘Social investment can be a friend of inclusion rather than an enemy, but this friendship requires a deliberate and well-conceived effort in order for it to flourish … policies for employment and social inclusion must be mutually consistent and comprehensive to be successful’ (Vandenbroucke et al, 2011, p. 464).
MORE PRIVATISED PROVISION, MORE SELECTIVE PREVENTION AND ERODED TAX AND CONTRIBUTION BASES The increasing development of social protection through the private market is facilitated and even encouraged by many governments because it is seen as reducing demands on the state. However, 'privatization means a diminution of protection: a dismantling of the social security shelter’ (Berghman, 1997, p. 63) with reduced preventive effectiveness across society on major loss that rarely seems to be discussed in privatisation debates. Those who can already afford to protect themselves gain more generous benefits and protection through the market while those in greater need of the preventive and protective support of social security tend to lose out.
This loss of more universal prevention is further reinforced by governments’ use of tax reliefs and other subsidies to promote privatisation. For example, countries such as the US, UK, Ireland, Australia and Canada have long made use of considerable tax reliefs to encourage and promote private saving for retirement, thus contributing to the erosion of the tax base and reducing funds available for public spending. Others, including France, Italy, Spain and Portugal, have explored similar ways to the Anglo-American model to strengthen private provision with little acknowledgement of the public revenue losses of extending tax reliefs (Hughes & Sinfield, 2004, p. 165). Evidence on revenue foregone is extremely limited, but it appears to have been increasing, exceeding 1 per cent of GDP in 5 countries in the latest OECD analysis (Adema, Fron and Ladaique, 2011, p. 33, Table 1.4), in great contrast to ‘the strict limits’ recommended by the Laroque report (ILO, 1984, para. 261).
These revenue losses enable better prevention for some, generally better-off, through tax-assisted private provision at the expense of others, generally less well-off. This widens inequalities because these tax reliefs usually have an ‘upside-down’ effect (Surrey, 1973, p. 37) with relief given at the marginal tax rate. The extent of ‘reverse targeting’ through these tax subsidies is usually considerable but little known. A rare official statistic from the UK revealed that ‘the top 2 per cent of pension savers … receive around a quarter of all pensions tax relief on contributions’ alone, 20 times more per person than basic-rate private pension savers (UK Treasury, 2009, para. 2.14).
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Directors and senior executives, especially in the financial sector, are able to take particular advantage of the tax reductions (TUC, 2011).
By contrast, women in most countries tend to draw less benefit from private provision and its upside-down, regressive tax subsidies because of their weaker labour force position with lower wages, less security and more part-time work (Ginn et al, 2001). Preventing/avoiding prolonged poverty in their longer old age becomes all the greater without the protection of tax-assisted pensions.
The fact that there is so little evidence of the scale of revenue losses and their reverse distribution results in a lack of visibility and accountability. Separated from the public spending agenda, these reliefs protecting some at the expense of the rest are much neglected by public review bodies, parliamentary committees and others scrutinising public spending. They are a part of ‘“subterranean" politics - far less visible to the broad public, far more favourable to the privileged, far less constrained by the features of American politics that routinely stymie major social reforms, and far more dominated by conservative political actors than the making of public social programs’ (Hacker, 2002, p. xiii: see also Faricy, 2011).
Losses to social security can be more direct where social insurance contributions themselves are reduced to promote alternative market provision. Under the ‘contracting-out’ system UK workers who are members of their company’s occupational pension do not have to pay full social security contributions as they only receive the basic state pension. Although claimed to be cost-neutral, it is still a transfer from public to private. In addition, and much less known, employers do not make National Insurance employers’ contributions on what they pay into employees’ occupational pension schemes although they are required to make these contributions on pay and employee benefits of all other types including for example company cars. Only reported in recent years, the cost was £8.2 billion in 2011-12 (UK HMRC, 2012, Table 1.5).
The resources for social security and its ability to prevent and reduce social and economic insecurity can be reduced in other unreported ways. One instance, ‘standard practice in the international shipping’ industry (Roy, 2010), supports merchant shipping fleets at the expense of the social security system. Some governments exempt employers from having to pay social security contributions for their crew members while these staff still pay employed contributions and receive full protection: others allow crews to be re-employed offshore to the same effect. Exploration of other uses of social security contributions could reveal further leakages that may support industrial or other objectives but reduce the resources specifically available for protecting social security.
The ‘erosion of the economic base’ from ‘tax resistance’ was identified as a problem for social security funding a generation ago (ILO, 1984, paras 209, 263-4), but it has grown greatly since then – and this may help to explain why its implications for social security are no longer taken into account. The growing erosion tends to be treated as if it were entirely external to changes in social security, but that ignores the indirect, knock-on effects of using tax reliefs to encourage private alternatives to social security.
Lessons from the credit crunch and subsequent lossesThe need for governments to have sound preventive strategies has been reinforced by the recent financial crises. The ‘credit crunch’ became a greater threat to social security
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in many countries because it hit as they were radically reforming their pension systems, part or fully privatising and also shifting from defined benefit to defined contribution with a greater risk for the individual. With pension funds losing value, by 30% of their assets worldwide by late 2009 (Bütler, 2009; ILO, 2011, p. 117), those with individual schemes were particularly exposed, but the effects were also felt more widely. ‘The crisis also reminds us that the government cannot remove itself from its involvement in social security as many had thought’ (Bütler, 2009). The importance of state-provided basic pensions as a minimum to prevent greater insecurity becomes more evident as the failure to prepare for the risks of investment collapse and consequent decline in protection against insecurity and poverty in retirement is recognised (ILO, 2011, p. 118).The Chilean pension reforms of 2006 acknowledged this point, with the state coming “back in” to support the poor and marginalised, even in conditions of economic growth.
In one country at least, the United States, the financial and economic crises combined with more privatisation mean that not only has public social security been allowed to fail but the private alternatives promised to be so strong that state provision was unnecessary have also been failing. In consequence prevention of social and economic insecurity by state or market has become even more reduced for large groups of people. ‘America’s job-based framework of economic security has gone from basic to broken. Defined, secure pensions – once the hallmark of a good job – are vanishing, and tax-deferred savings accounts like the 401(k)s are not filling the gap. As medical costs continue to outstrip inflation, employment-based health insurance benefits are becoming rarer and less protective’ (Hacker, 2011).
‘The creeping spread of insecurity up the class pyramid’, as risks not only become greater but government and business ‘offload’ risks (Hacker, 2008), is not confined to the United States. Claims of American exceptionalism ignore the growing evidence elsewhere. For Europe this has been succinctly pulled together by Mary Daly who concludes: ‘Just at a time when the market is being promoted more and more as a source of welfare, it is delivering less’ (2011, p. 133). Changes have polarised the labour force with an increase in high-paid security at the top and in poorly-paid insecurity at the bottom. This is the context for Chantal Euzéby’s analysis with its emphasis on the need for structural change to bring about greater protection against insecurity.
CONCLUSION Prevention needs to be re-established as one of the basic goals for social security policymaking at national and international level. Rarely a topic to gain high priority, the slippage of prevention off the social security agenda has been facilitated and reinforced by policy trends individualising the social. With many ‘advanced’ states’ withdrawal from direct involvement in social protection, goals concerned with broader objectives of solidarity, inclusion and prevention of risks have tended to become overwhelmed by concerns with public spending and disincentives to work. In poorer countries the continuing drive to extend coverage risks less time and resources devoted to ensuring that those programmes that are established have adequate resilience to prevent insecurity and poverty.
Mainstreaming prevention in social security policymaking and so restoring the balance between rescuing, rehabilitating and preventing is a tough challenge, especially when the costs of social security attract more attention than its effectiveness. The risk of reducing or even losing preventive effectiveness is greater if prevention is not clearly
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designated as a central function of the system. ISSA is working to establish a ‘culture of prevention’. In criticising ‘the relative neglect of preventive action in its widest sense’, the Laroque group stressed that that culture ‘needs to permeate virtually all departments of government, the actions of employers and employees, the activities of voluntary bodies and, most important of all, the actions of individuals and families’ (ILO, 1984, paras 118 and 240).
Giving higher priority to preventing social and economic insecurity underlines the contribution made by adequate and universal benefits that protect individuals and families from falling into poverty with all the many attendant problems and costs for them and the wider society identified in recent research (JRF. 20??). In fact, the success of prevention is one of the strongest arguments for maintaining a properly adequate and fully universal scheme (Rothstein, 1998). From this perspective the greater reliance on selective means-testing with tighter controls and inadquate upratings is revealed as a false economy that can leave greater problems and costs, social and financial, for the future.
Strengthening preventive effectiveness in social security requires a cross-department, cross-agency perspective supported by co-ordinated involvement with trade unions and associations, formal and informal, at all levels. As the Beveridge report argued two generations ago, ‘any Plan for Social Security … assumes a concerted social policy in many fields’ (Beveridge report, 1942, para 409; see also ILO, 1984, chapters 4 and 7).
Prevention as a routine issue to be monitored, assessed and debatedRoutine preventive measures need to be built in rather than allowing the adjustments to become periodic matters of political tactics. Regular monitoring, for example, of the efficacy of the automatic stabilising effect for both demand and income could have alerted and informed debates on how to respond to recent crises.
There needs to be regular scrutiny and appropriate action by national policymakers of the - adequacy of benefits to ensure that as much insecurity as possible can be prevented and more still significantly reduced in extent and time;- optimum coverage to ensure that as many as possible are eligible for protection;- maximum take-up of benefits to ensure that as many as possible of those covered are in fact protected when they are vulnerable;- regular uprating to ensure that benefits remain adequate to protect beneficiaries and any dependents from insecurity and poverty.Some elements of this refocussing to give equal weight to keeping people out of poverty and preventing economic insecurity will require significant changes in both management and training of staff at many levels. These need to:a) give attention to assessing broad indicators of social security; b) provide staff with a better understanding of the problems that social and economic insecurity and particularly poverty can create and reinforce for individuals, families, communities and the wider economy and society; c) enable them to recognise signs of insecurity and to help by, for example, maximising take-up and explaining the consequences of particular behaviour that could increase or reduce benefits;d) make them better aware of the harm that can be done by talk and action that can stigmatise and undermine the confidence of those on benefits and on low income.
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Governments at central, regional and local level need to encourage and support independent welfare rights and advice work that can support better take-up and increase awareness within administrations and communities of the gains to be obtained by achieving a higher and more sustainable level of social security.
International agencies need to give more attention to these issues and to monitor progress in reaching the necessary standards. The EU Independent Network of Experts on Social Inclusion is offered as an instance of best practice that deserves to be introduced more widely. Their reports should be made more easily available and considered in countries’ appropriate parliamentary committees. Explicit consideration should be given to how far prevention of insecurity and poverty can be attained and the implications in terms of personal, social and public costs and benefits.
Regular monitoring of the extent of tax reliefs foregone in promoting prevention through the market is needed for better budgeting and to ensure that the revenue lost does not lead to reduction in public support and protection.
‘The priority for prevention should be also carried through into priorities for research, particularly in the social sciences. … The more we understand causes, the more potential fields for preventive actions will be identified’ (ILO, 1984, paras 238 and 121). What, for example, are the conditions under which social security systems might more effectively achieve a better balance between easing insecurity and preventing it in the first place? More research is needed into the most appropriate packages of measures that can consolidate the impact in different situations with for example additional stabilizers.
Official statistics need to be reviewed to ensure that they pick up the preventive implications for policymaking decisions. Only independent research revealed, for example, the extent of limited uprating over time and the long-term effects or the fact that as many children had been prevented from falling into poverty as had been lifted out of it so the impact of a new policy could be twice as great as was being discussed (see above). Such failures to include prevention routinely limits policy assessment, discussion and understanding.
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Social security and insecurity, both subjectively and objectively defined, have become increasingly neglected concepts as systems of social security have developed and expanded: in consequence, their role in preventing insecurity and promoting security appears to have been weakened in many countries. This paper has argued that there is still much that can be achieved by social security systems with closer attention to what is needed to prevent insecurity and promote personal and collective security.
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