At the Conservative Party Conference this week, Iain Duncan Smith, the Secretary of State for Work and Pensions, pledged to introduce pre-paid benefit ‘smart cards’ for social security claimants affected by ‘drug or alcohol addiction, even problem debt, or more’. The immediate activity will focus on extending and evaluating a relatively small-scale scheme currently operating in North Tyneside. While the emphasis in Duncan Smith’s speech was on parents and family, the scope of the current activity is more broadly around people perceived to have difficulty budgeting.
Several charities, usually in partnership with firms from the financial sector, are developing specialised accounts products to accompany the introduction of Universal Credit. These often involve ‘jam jar’ facilities that ring-fence pots of money for specific bills like rent and many involve voluntarily giving up a degree of financial autonomy, such as agreeing to a waiting period before being able to withdraw large sums of money. These specialised accounts are, or will be, entirely voluntary to take up and are fee-charging. A voluntary benefit card scheme could be seen as analogous to this and, in this sense, as offering what some individuals may want.
However, while the idea of a wider roll-out of benefit smart cards may be at least superficially attractive, the proposal raises a number of concerns.
Anyone with an interest in drug and alcohol misuse, treatment and recovery knows that one of the biggest barriers an individual can face is that of stigma. It can have a detrimental impact socially, economically and is often not just restricted to the individual themselves, but often extends to their family. There is persuasive evidence from places where similar cards have been introduced that presenting a recognised card, particularly at a local shop, possibly in front of friends and neighbours, increases stigma. The Government’s 2010 Drug Strategy places recovery capital and reintegration top and centre: introducing a measure that would instantly make someone stand out as being affected by addiction, problem debt ‘or even more’ seems unlikely to yield dividends in that regard.
Again looking at areas where similar schemes operate, the evidence for their efficacy is unclear. Studies looking at income management schemes in Australia, for example, have highlighted both the unclear evidence and the problem of attribution – that is, that in some cases it’s unclear whether a significant positive change has occurred, and that where a change has, it is difficult to attribute it to one cause among a suite of other interventions aimed at the same cohort. Work around similar schemes in the United States (e.g. the Supplemental Nutrition Assistance Program, often referred to as food stamps) have highlighted concerns around stigma and the frequent inability to purchase necessary but unapproved items.
In addition to concerns of increased stigmatisation and unclear evidence of efficacy, any proposal to roll benefit cards out more widely would need to address a number of questions. These include how to avoid unintended consequences. Any measure that would serve as a disincentive to access treatment for drug and/or alcohol use, or to disclose use or misuse as a barrier to employment at Jobcentre Plus would be highly unwelcome – and we already know that for sensitive subjects such as substance use and homelessness the disincentives (whether actual or perceived) are already so substantial that comparatively few people do disclose, or at least not immediately.
While this measure has so far been talked about as a means of protecting children and families from parents or carers who routinely make suboptimal decisions, there is the question of who would decide whether or not an individual would be eligible for (or potentially compelled to take part in) the scheme, and whether Jobcentre Plus staff (or staff in, say, a local authority) are equipped and trained to come to this decision, which could approach or at least rely on a clinical diagnosis in the case of substance misuse. Separate criteria would presumably be needed for problem debt, and the ‘more’ referred to in Duncan Smith’s speech.
While clearly some people (whether in receipt of welfare benefits or not) do struggle to budget and measures such as the Local Support Services Framework may turn out to be helpful in supporting people to meet the challenges of Universal Credit in particular, there seems to be a risk with benefit cards of moving from support to paternalism, against the direction of travel of reforms by this and previous governments which have tended to prioritise increasing autonomy and responsibility while focusing support on those most in need. Moving away from groups with particular needs to the wider claimant cohort, there is little evidence to suggest such measures are necessary.
Any government implementing this sort of scheme also has practical issues to consider. Such a scheme may come with a substantial cost, financially and in other resources, if rolled out nationwide. The implementation of the Azure card for asylum seekers was beset by problems on introduction and, some campaigners and stakeholders claim, the failings of the scheme are actually inherent to it rather than related solely to problems of implementation. Some of this may carry across to a wider benefit card scheme. For example, if a scheme is limited to a restricted pool of retailers, it may end up penalising those in remote or dispersed communities or some people with mobility problems. This is before one considers the potential for fraud and abuse.
Given that a genuinely voluntary smart card scheme could be seen as being broadly comparable to the commercial or social enterprise products being developed, what could government consider as an alternative? Positive steps to address the deep disadvantages that lie at the heart of poverty and social exclusion – a commitment given by the government in the Social Justice Strategy – might be a constructive way of doing this. For example, investing in health education, family support, support for young carers and so on might all bring rewards, as would improving the support people receive to help them into employment, thereby providing an exit strategy for people with histories of drug and alcohol use.