WellFair Budget

Affordability
To address concerns about the cost of WellFair, we have developed the following provisional budget to show that WellFair certainly is affordable, and will deliver much better value for money than the current welfare system.

Developing Provisional Wellfair Content
We have used the Joseph Roundtree Foundation (JRF) estimates of Minimum Income Standards (MIS) to develop the per head costs of delivering the WellFair services. These costs are based on definitions of “minimum” standards of living, proposed by current UK citizens, and include levels of detail that allow us to determine what would, and would not, be included in the definition of WellFair.

We have enhanced the JRF’s MIS by adding the following:

• Added current UK government spending for housing, NHS, disability care, transport, protection and general government to the MIS numbers.
• Added basic Internet and phone costs, as well integrating the TV License fee in to the Information WellFair service.
• Double the current UK Transport budget, to ensure that local public transport systems can provide free local transport for all.

Items in the JRF MIS that we expect to deliver via UCC are:

• Household items and insurance (£15.80/week)
• Personal items (£10.80/week)
• Clothing (£9.48/week)

Items in JRF MIS budgets that are not included in the WellFair budgets are:

• Culture & recreation (£32.44/week)
• Alcohol (£3.18/week)

These amount to an average weekly budget of £35.62. LIFE expects that local communities and charitable organisations (previously focussed on providing bare necessities) will be able to refocus their efforts on improving the joy of life, and assist with these expenses those without the capacity to earn anything.

The private transport budget (£22.39/week, which was only added to MIS in 2012 due to the chronic demise of the public transport system) will be replaced by LIFE’s plan to double expenditure on public transport, which will revive the energy-efficient, interconnected, public, mass transit infrastructure needed by any modern society.

Per Person WellFair Costs
Including LIFE’s service enhancements, the following table shows the full WellFair cost per person (including weightings for household size, and urban v. rural differences).

WellFair Costing

WellFair Service	Note	Weekly	Monthly	Annual
Shelter	Excl. personal household	£61	£264	£3,170
Food		£15	£65	£780
Personal & Household	UCC	£36	£156	£1,875
Health & Care	Incl. disability	£86	£373	£4,474
Education		£31	£136	£1,628
Transport	Double 2013-14 £s	£14	£61	£731
Information	Internet, phone & TV	£8	£34	£410
Legal Services	Govt, police & fire	£15	£65	£779
		£266	£1,153	£13,846

UK WellFair Budget

WellFair Service	Annual (£Bn)
Shelter	68
Food	17
Personal (UCC)	40
Health & Care	273
Education	99
Transport	45
Information	25
Legal Services	48
Initial WellFair Budget	614
Local Delivery Efficiency (SSHEL)	-54
Labour unit cost reductions	-61
Final WellFair Budget	498

Budgeting assumes that 35% of the population will access the Shelter and Sustenance (Food + Personal) services, and that the remainder will be taken up by 100% of the population.
Two factors are projected to reduce the actual budget by nearly 20%, bringing the actual project spending down to £498Bn:

• Efficiency: 10% greater efficiency and reduced waste in service provision; resulting from locally directed delivery by local resources (efficiency factor not applied to Transport and Information).
• Reduced Labour Costs: 10% total cost savings, from the reduction in labour rates resulting from the introduction of WellFair and its effect on rates for low skill work, which comprises a significant percentage of the labour involved in delivering the WellFair services themselves.

These efficiencies will lag a few years behind increases in spending. The following chart shows WellFair spending over the first 5 years, including an additional £3Bn a year to fund Community and Regional Assemblies and their elections.

WellFair Introduction

WellFair Services (£Bn)	Current	New	2015	2016	2017	2018	2019
New Spending Introduction	£Bn	£Bn
Shelter	53	15	Inherited	50%	100%	100%	100%
Sustenance (Food + UCC)	0	56	Inherited	50%	100%	100%	100%
Health & Care	273	0	Inherited	Same	Same	Same	Same
Education	99	0	Inherited	Same	Same	Same	Same
Transport	22	22	Inherited	50%	100%	100%	100%
Information	5	20	Inherited	50%	100%	100%	100%
Legal Services	48	3	Inherited	50%	100%	100%	100%
Efficiencies Introduction		£Bn
Local WellFair delivery		-54	Inherited	25%	50%	75%	100%
Labour cost reduction		-61	0%	10%	50%	75%	100%
Total Spending			£Bn	£Bn	£Bn	£Bn	£Bn
Shelter			53	60	68	68	68
Sustenance (Food + UCC)			0	28	57	57	57
Health & Care			273	273	273	273	273
Education			99	99	99	99	99
Transport			22	33	45	45	45
Information			5	15	25	25	25
Legal Services			48	49	51	51	51
Budget before efficiencies			500	558	617	617	617
Local WellFair delivery			0	-14	-27	-41	-54
Labour cost reduction			0	-6	-31	-46	-61
WellFair Budget (£Bn)			500	538	559	530	501

Current Spending
Currently the government spends £500Bn on similar services.

UK Spending (2014 budget)

	Central	Local	Total
Shelter	34.1	18.5	52.6
Sustenance	0.3	0	0.3
Health & Care **	216.1	56.7	272.9
Education	35.7	63.6	99.3
Transport	13.9	8.4	22.3
Information	4.7	0	4.7
Legal	24.9	22.7	47.5
Total WellFair-type Spending	329.7	169.9	499.6
Non-WellFair Spending	217.8	4.3	222
	547.5	174.2	721.6

** Included in this Health & Care budget line for existing spending are: Sickness and disability, Survivors, Family and children, Social exclusion n.e.c., R&D Social protection, Social protection n.e.c.

It is worth noting that the JRF estimates that current welfare spending only provides 40%-60% of the Minimum Income Standards for working age people, and 80 to 100% of retired people.

Local v Central Spending
As can be seen in the above table, current government spending is weighted 2:1 in favour of central government (i.e. controlled from Westminster).

Because WellFair responsibility will be primarily held by local Communities, the balance of spending will shift in favour of local control. The following table shows the impact on Central v Local distribution by allocating new spending primarily to local Communities and shifting 50% of Health & Care responsibility down to Communities.

Local Impact WellFair Budget (£Bn)

	Current Spending		New Spending		WellFair Total
WellFair Service	Central	Local	Central	Local	Central	Local
Shelter	34	19	2	13	36	31
Sustenance (incl. UCC)	0	0	0	56	0	56
Health & Care	216	57	0	0	136	136
Education	36	64	0	0	36	64
Transport	14	8	0	22	14	31
Information	5	0	4	16	9	16
Legal Services	25	23	0	3	25	26
Total	330	170	6	111	256	360
Share	66%	34%	5%	95%	42%	58%

The WellFair Support Grant (WSG) will be distributed directly to Community Assemblies, which are responsible for actually delivering the services.
Some portions of different budgets will be retained at the national level to cover services that are provided at a national or regional level (equivalent to the current Revenue Support Grant {RSG} “top-slice”). Once Regions have been formed and completed an election cycle, the portion of the WellFair budgets that are associated with services promoted to Regions, will be distributed directly to the Regional Assemblies.

Formulating a Budget for WellFair
After the election, we will follow these steps as the proper budget process for WellFair:

1. Determine the minimum standards for each service.
2. Collect budget estimates for those services from each Community and Region.
3. Sum all of the costs and divide by the number of people = annual per person WellFair Support Grant (WSG).
4. Figure out the Income Tax Base and Step-up rates necessary to cover the WellFair costs.
5. If the tax rates are acceptable, OK. If tax rates would have to be too high, change the specification of the services (see 1 above).

During the first year we will engage in the above process to make a final determination of the content of the WellFair services and their full cost. The final content of WellFair services will be determined in a review following passage of the Wellfair Reform Act.