A local welfare state?

Something interesting from Reform, the think tank. The more hawkish think tanks on the centre right aren’t always the biggest friends of local government. There’s been a lot about the propensity of councils for waste and “non-jobs”. Last week’s missive from the TPA was a case in point. Most, however, are also ardent champions of localism. Reform’s not as closely associated with localism as, say, Policy Exchange but its new paper, The Money Go-Round, has some localist gold.

The headline finding, that middle class benefits cost the middle classes as much in taxation as they receive back, leads the think tank to argue that these benefits should be scrapped. I agree with the thrust of this, as it is an extremely inefficient and costly way of doing things, but there’s also the argument that support for the welfare state will only survive if taxpayers see the benefit. That may make it a neccessary evil.

Far more interesting is their point that the government’s welfare reform is remarkably state-centered and bureaucratic. Patrick Nolan, Reform’s economist, has argued on the US website Politics Daily that a single benefit “calculated by a computer in Whitehall” simply won’t work. He points out that the system is necessarily complex because it is ” designed to deal with people who have complicated lives . . . parents who are separated . . kids moving between houses . . . people in and out of work.”

The report therefore argues that we should retain some of the complexity of the present system but put local government, with its more detailed local knowledge of labour markets and community need, in charge of benefits. It’s a beguiling idea, which Steven Greenhalgh reckons could save the taxpayer £4.5 billion.

It’ll be a lonely job making the case for this reform, however. It’s clear that Eric Pickles radical commitment to localism isn’t shared by all his colleagues. David Cameron, in particular, isn’t prepared even to entrust the administration of his Big Society to it. As the LGiU has argued, his government will have to be bolder if it wants to save money.