The poverty policy trap

As the government's new Social Exclusion Unit starts work, academics are split over how to deal with The poor. David Walker reports

There were two versions of the government's agenda on poverty and social exclusion around this week. The official one saw Tony Blair launching the Social Exclusion Unit, a new Whitehall initiative designed to coordinate government departments in the fight to bring people, especially poor children, back into society's mainstream.

The unofficial version - audible on the Labour backbenches - was that the government made a major contribution this week to increasing social exclusion by cutting benefits to lone parents and starting to bear down hard on payments to people with disabilities.

That political conflict is mirrored within academe. Since the summer sharp words have been exchanged between those who say cash payments to the poor matter most and those who say cash is less important than a long-term strategy for the poor. Is the way to decrease "social deprivation" to maintain levels of social security benefits, or is it to cut benefits and encourage the disadvantaged to work for their living?

The argument surfaced during the Labour party conference a couple of months ago when 54 professors of social policy wrote a letter to the Financial Times, taking Tony Blair to task for having failed to increase benefit payments. Signatories included many of the discipline's famous names, such as Birmingham's Nick Deakin, the Open University's Stuart Hall and Ruth Lister, former Child Poverty Action Group director turned social science academic. A hint of old Labour was signalled by the inclusion of David Donnison, chairman of the Supplementary Benefits Commission when Jim Callaghan was premier. Labour, argued the letter, had its priorities wrong - the government should first put money in the pockets of the poor and only after that start long-term programmes such as Welfare to Work, the "New Deal" for the unemployed and the Social Exclusion Unit.

But we do not need professors of social policy to tell us that the poor would be better off if they had more money, says a sarcastic Howard Glennerster of the London School of Economics. His view is - as Peter Mandelson might put it - much more on message. It is that ways of encouraging the poor to work for a living must now be found and tried. It is a view shared by the social policy specialists coalescing at the LSE around the newly-created Centre for Analysis of Social Exclusion, directed by John Hills.

It is to Hills's group that the future of social policy in the new Labour age probably belongs. Professor Hills and Anne Power, his partner and fellow member of CASE, hobnob with health minister Tessa Jowell, architect Richard Rogers and other members of the inner circle. Hills provides seminars for Treasury officials and will certainly be consulted by the government's new unit.

But even that phrase, "social exclusion", supplanting the word "poverty", is a big bone of contention among these academics. The phrase is "cosmetic", says Jonathan Bradshaw of York University, dreamt up when the Tories were in power because they could not stomach the "p" word. Yet Hills says that "'social exclusion' is a more useful term than 'poverty' because it refers to dynamic processes". At CASE researchers "are going to be looking at what determines which people escape quickly from periods of low income - and which people slip back under the breadline again." He adds: "Just being given a lump of cash does not by itself make someone part of the mainstream of society."

Hills compares the government's approach - approvingly - with delivering small amounts of water to exactly the right place beside a plant's roots. "By analogy, delivering help to someone at just the right moment to ensure that they bounce back into work may be a great deal cheaper to government in the long run than cash benefits dribbled out year after year."

But it would be wrong to over-emphasise divisions between the academic camps. Julian Le Grand, an associate of the LSE centre and another, like Glennerster, who did not sign the FTletter, says "the thing that outrages all social policy academics is the injustice associated with social exclusion or povertyI Where we are beginning to diverge from one another is on the means of eliminating it. It is what the means are - other than raising benefits - that the centre will address.

"We have thrown money at this problem for 50 years, yet the system set up to deal with it is as bad as ever. At the same time social security has become the largest area of government spending. We've just got to rethink it."

One of the brains who will mull over all the options and was behind the creation of the Social Exclusion Unit is Geoff Mulgan in the prime minister's office, and lately director of the think-tank Demos. He will listen to ideas from Professor Hills and colleagues on how better to focus existing government education, housing, police and training spending on neighbourhoods in which deprivation thrives.

"Neighbourhood" is a key word for CASE, where associate researchers such as Kath Kiernan are already working on the emerging flood of data from longitudinal studies such as the British Household Panel Study which shows what happens to people, in and out of work, across time. Kiernan recently produced a paper showing that while divorce is linked with poverty and lack of opportunity for children, the causal mechanisms are far more complicated than right-wing moralists might like, having as much to do with families' economic condition preceding divorce as with the breakup itself.

The challenge for CASE is to link this kind of study to in-depth analysis of the places where exclusion and poverty are concentrated.