Call for more asset-based welfare

20 Apr 06
Ministers should explore new ways of using individuals' assets, such as housing and other inheritances, to help fund future welfare reforms, a leading think-tank has claimed.

21 April 2006

Ministers should explore new ways of using individuals' assets, such as housing and other inheritances, to help fund future welfare reforms, a leading think-tank has claimed.

The Centre for Asset-Based Welfare, part of the Institute for Public Policy Research, this week launched a campaign to influence politicians and civil servants seeking solutions to Britain's widening wealth inequalities.

It wants ministers to build on the early success of Labour's child trust funds – which use state payments to kick-start regular savings programmes for children – to deliver policies that could reduce wealth inequalities.

It called on the likes of the Treasury and the Department for Work and Pensions to research ways of using other universal capital grants to complement future welfare spending.

The Institute for Fiscal Studies recently claimed that individuals could use housing assets to part-fund their retirement, while the IPPR has called for more research into other 'matched funding' arrangements that could improve savings rates among lower-income households.

Such ideas are explored in a book on universal asset policies, The citizen's stake, launched by the IPPR on April 18, which also explores more radical ideas for reform.

Co-author Stuart White, an Oxford academic, said that while inheritance tax reform remained a 'politically controversial' issue, it should not deter ministers from considering amendments that would free resources to benefit whole communities and not just individuals.

But Sue Regan, chief executive of the Resolution Foundation and adviser to former work and pensions secretary David Blunkett, warned that Whitehall still had a long way to go before it was up-to-speed on the potential use of asset-based welfare.

Speaking at the launch, she said: 'When I worked at the DWP, I was taken aback by how little it was mentioned across government. [Its use in] public policy lags far behind sectors such as the financial services industry.'

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