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TRAPPED BY BENEFITS

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Regeneration failing as rules keep local residents off career ladder ...
Regeneration failing as rules keep local residents off career ladder

By Jennifer Sprinks

The government is facing pressure to allow the chronically unemployed to earn a working wage while claiming housing and council tax benefits, to boost employment.

Councils are struggling to get local people into jobs through regeneration and development plans, because when residents declare earnings through the schemes, the government claws back housing and council tax benefits - often leaving them worse off than before. This is escalating the problem of 'worklessness', whereby people can remain out of work for many years.

As a result bodies such as the British Urban Regeneration Association (BURA) and the National Community Forum (a ministerial advisory board) are keen for the Department for Work & Pensions to exempt local people from declaring earnings from seasonal or part-time work, so they can continue to receive benefits while they get a foot on the career ladder. This would lead to long-term economic benefits and speed regeneration.

BURA director and deputy chief executive Jess Steele said: 'We are saying to the DWP that allowing a disregard for earnings [for short term or part-time work] would be a positive thing because it would give a real boost to community based regeneration.'

Under current legislation, there are Permitted Work Rules which allow minimal earnings to go undeclared for receipt of incapacity benefit, but the rules do not cover housing and council tax.

Worklessness affects regions that have populations with poor qualifications, low aspirations, poor health or significant care responsibilities - issues that affect deprived areas such as some London boroughs, Wales and the north of England. It can affect whole neighbourhoods and is seen as a more ingrained problem than unemployment, largely because residents are often used to receiving benefits.

BURA's Jess Steele said: 'There are many jobs in local areas around health and safety, youth groups, school crossing patrols, environmental improvements, childcare and working with the elderly, that would be best done by local people. But it's difficult getting this to happen under the current rules.

'The money is often there, through councils' regeneration schemes, to pay for this type of seasonal or part-time work, but it doesn't get done because of the benefits trap.'

Local Government Association benefits consultant Frank Newton said: 'The [benefits trap] is something we're deeply concerned about.

'We want to extend the income disregard for working but it would have to apply to all existing and new benefits applications, which is not a cheap option.'

Newham is one such area suffering worklessness. The borough's business and employment manager Jane Sherwood said: 'Benefits is an area where councils have less influence because it's a national issue.

'We're looking at lobbying vociferously to get quite significant changes and [get the DWP] to recognise there is a benefit reduction that is acting as a barrier [to employment].'

A DWP spokeswoman said: 'There are no plans to change the earnings disregard because it is prohibitively expensive.

'But there are recently introduced government initiatives that have made it simpler for councils to administer

benefits.'

Workless hotspots

Incapacity

Easington's long-term unemployment problems largely stem from incapacity. 181 per 1000

of the working age population claims incapacity benefit, compared to the national average of 65 (2004). Its worklessness is largely linked to the demise of heavy industry.

Data: Local Futures,IPPR North

Low skills

48.2% of the population of Merthyr Tydfil is 'economically inactive' compared with the GB average of 37.6% (2004). One reason is limited work for lower skilled people in the Valley areas.

Data: Welsh Economic Research Advisory Panel

Lone parents

Tower Hamlets and Newham have International Labour Organisation (2004) unemployment rates of 12.14% and 8.93% compared to the national average of 4.56%. This is due to low skills among ethnic groups and high numbers of lone parents who struggle to find work that fits in with childcare.

Data: Local Futures

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