Criticism of welfare report 'inaccurate'
Picking holes in the methodology of analysis detracts from its crucial economic message, says Seamus McAleavey, chief executive of Nicva
Published 29/04/2014 | 09:30
The Northern Ireland Council for Voluntary Action published a report last year on the impact of welfare reforms on Northern Ireland. A similar analysis had been commissioned by the Scottish Parliament and we felt it was important to produce data for Northern Ireland.
So, we commissioned professors Fothergill and Beatty from Sheffield Hallam University to carry out analysis to inform the debate over the reforms and highlight the need to mitigate its effects.
For example, the report shows that in-work benefits are deeply affected by the reforms, threatening to exacerbate the problem of working poverty.
Given that welfare reform has significant implications for the local economy, it is fitting that John Simpson discussed the report in Business Telegraph. However, rather than engaging with the economic issues raised by the report, Mr Simpson used his column to criticise its methodology.
He claimed that "careful analysis of the impact of welfare reform in Northern Ireland confirms that the Nicva publication is, at best, misleading but essentially, is flawed". More careful analysis of the report should have led to a very different conclusion.
The first criticism is that the figures in the Nicva report "contrast" with Treasury figures, showing "that spending on welfare ... will continue to increase in the immediate years ahead". In fact, there is no discrepancy between the figures – they are measuring different things. Our report does not look at total spending, which will indeed continue to rise due to factors such as population growth and ageing (pensions make up around half of social security spending). Rather, it estimates the spending foregone as a result of the proposed reforms. And it does so primarily on the basis of treasury and other official data.
The second criticism is that the Nicva report includes changes to welfare that have already been implemented. This is true and it is clearly stated in the report that welfare reforms introduced by the former Labour government have been included alongside those of the coalition government in order "to provide a comprehensive view of the impact of the reforms". Furthermore, the impact of each change is estimated individually, allowing readers to separate existing and proposed reforms.
The third criticism is that the NI Executive "has negotiated a possible compromise on ... housing benefit". It appears that Mr Simpson thinks that housing benefit should therefore be excluded from the analysis. However, in his own words, this remains a "possible" compromise only. The report rightly produced estimates for the proposals as they were at the time. And it provided a specific figure for housing benefit, so that any compromises reached in the future could be deducted from the analysis.
Finally, Mr Simpson claims that changes to Disability Living Allowance are "not expected to lead to significant cuts". However, the government's own impact assessment estimates "savings to the Exchequer of £2,240m". Perhaps there is some dispute here as to whether 'savings' for the treasury can accurately be described as 'cuts' for others. But from our perspective, it would be unhelpful if the debate over terminology is used to draw attention away from the more important matter of the consequences of the reforms.
Welfare reform is an important and complex subject which merits public debate. But the issue is better served by considered comment on its economic implications and how these might be addressed, rather than inaccurate criticisms of our report.
Nicva's economic research reports are available at www.nicva.org