Cities to be given welfare powers

13 Jul 06
Ministers are poised to devolve new welfare powers to cities aimed at combating poverty, raising employment and improving conditions for people with disabilities.

14 July 2006

Ministers are poised to devolve new welfare powers to cities aimed at combating poverty, raising employment and improving conditions for people with disabilities.

In an interview with Public Finance this week, Jim Murphy, minister for employment and welfare reform at the Department for Work and Pensions, revealed that he would launch the DWP's 'cities strategy' this month.

The initiative, outlined in a welfare green paper in February, will hand responsibility for almost all major decisions over the design and operation of welfare support in the UK's cities to coalitions of councils, private sector partners and voluntary and charitable organisations.

Up to ten pilot schemes will be announced this month and ministers will seek to expand the initiative in line with city-led strategies for regeneration

co-ordinated by the Department for Communities and Local Government.

Murphy said it could help the government to meet its targets to get 1 million people off benefits and into work, eradicate child poverty and improve the quality of welfare provision while reducing costs.

'We can't achieve all of our national [welfare and employment] goals unless we achieve them within our cities,' Murphy told PF.

'In Europe, cities outperform their surrounding areas in terms of economic activity. But in the UK it's the opposite; cities drag behind by about 5% in terms of employment rates. Two-thirds of people on benefits live in our cities. In London, our most prosperous city, half of all children in the inner-city area live in relative poverty. So the scale of the challenge is massive.'

Murphy said the solution was to devolve responsibility to practitioners who understand how local economies and welfare systems work. 'We don't have all of the answers here in Whitehall. Cities know the nature and extent of their problems, therefore they should design the structure of the solutions.

'Mencap [the mental health charity], for example, knows more about delivering services for mental health patients than ministers. We'll help with funding but the idea is to support city-wide work with councils, government agencies, businesses, the voluntary sector and charities.'

Graham Allen, Labour MP for Nottingham North, confirmed that the area's local strategic partnership has applied to pilot the initiative. 'Nottingham has 30,000 people on incapacity benefit and we're keen to experiment with local support mechanisms to assist many of them back into work,' he said.

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