Republican Rep. Todd Young said on Tuesday that he is envious of the U.K.’s successful welfare reform initiatives.
“I wish the House of Representatives could direct Health and Human Services to change their welfare policies, but we have a somewhat different form of government,” said Young at the American Enterprise Institute Tuesday.
Young commented on the welfare initiatives, known as social impact bonds/partnerships, implemented by the United Kingdom. Also present at AEI was Iain Duncan Smith, the U.K.’s longest-serving secretary of state for Work and Pensions.
Smith explained that under his leadership, social impact bonds have made a significant positive impact on the issues of poverty, welfare and homelessness in some of the poorest parts of the U.K.
In the U.K.’s system, the social impact bonds work as a pay for success system. Smith stressed that work should always pay more than being on governmental benefits.
“Welfare, should be, I believe a journey that people are on, not a destination where they stay,” said Smith.
The secretary said that under the newly established system, they have stressed not only putting people back to work, but sustaining them in the workforce. He said that since the program was started in 2010, there are 270,000 fewer families living in public housing without work, and that British Parliament has done this while saving $75 billion over the 5-year period.
This kind of reform is done through philanthropic financing from private foundations or other investors that are willing to cover the upfront costs and assume the performance risk to expand programs of promise. Taxpayers are thus assured to be outside the equation and do not pay unless the program can demonstrate success in achieving the desired outcomes — the outcomes being a sustained workforce.
Young has taken an acute interest in the reform taking place in the U.K. and the work of Smith. During the last congressional session in the House, Young introduced new legislation to the floor, garnering some of the key principles of the U.K.’s system into U.S. domestic policy.
In his bipartisan draft of the Social Impact Bond Act with Democratic Rep. John Delaney, Young proposed similar legislation to the U.K., seeking to “harness private sector investment to expand evidenced-based policies.”
“We need to make sure that joblessness never pays more than employment,” Young said on Tuesday.
According to the congressman’s communications director, Young will be reintroducing his bill to Congress this week. It went to a hearing in the last congressional session, but has not yet been approved.
Smith said that the issue of welfare policy reform has been conceded to the liberal parties of both America and the U.K., and said that this should not be the case. He urged that conservatives should be vocal and active in the quest for welfare reform and positively impacting poverty.
Young said that we need to start this process by “viewing each person as an asset and not a liability. Freedom requires us to view people as wanting the opportunity to earn their success.”