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CHAPTER 7 - Conclusions and next steps

Table of content:
I - SECURITY AND RISK: TRENDS IN THE ENVIRONMENT CONFRONTING THE LEAST ADVANTAGED PEOPLE
1) "Triple A" social provision: adequacy, accessibility, and affordability
1.1. Adequacy: the quantity / quality trade-off
1.2. Accessibility
1.3. Affordability
2) Risk
2.1. Risk groups
II - CONCLUSIONS AND NEXT STEPS
1) Multi-dimensional risk
2) Next steps
2.1. Phase 3 of HDSE
2.2. Table 1: A summary of key issues and groups identified in this report
2.3. Progressing the Revised European Socail Charter
2.4. Establishing effective monitoring
2.5. Enhancing research capacity
2.6. Sharpening the focus of the ed work-programme
2.7. Defining a high-profile index of cohesion
2.8. Increasing visibility
2.9. Consolidating and developing partnerships
2.10. Encouraging best practice
APPENDICES
Figure 1: Adequacy of social protection
Figure 2: Risk / turnover relationship for groups at risk of exclusion
Figure 3: The impact of reforms to health and wealth creating systems

This chapter contains two Parts. Part 1 develops the framework of opportunity and risk outlined in chapter 1. It draws attention to the decline in the objective of ‘triple A’ social protection, and the conscious enhancement of risk.

It distinguishes between entry and exit risk, and between risk and uncertainty. Part 2 makes some suggestions for follow-up to the HDSE initiative. It first indicates that multi-dimensional risk is a particular threat to human dignity, and notes the consequent link between social and human rights. Proposals for follow-up include closer co-operation with the Social Charter group and establishment of a social cohesion and social justice monitoring body with a research capacity. It concludes with some comments on partnership, visibility, dissemination and best practice. Key issues drawn from Chapters 2-6 of this report (the chapters on the five policy sectors), are listed in the Executive Summary accompanying this report.

I - SECURITY AND RISK: TRENDS IN THE ENVIRONMENT CONFRONTING THE LEAST ADVANTAGED PEOPLE 

The key themes of this report revolve around security and risk, the changes that are taking place in Europe in the balance between these two dimensions of social life, and the impact on social integration and social exclusion. This first part characterises an ‘ideal type’ of ‘triple A’¹ social provision, and reflects on the departures which governments have made from the goals of universality and security. It goes on to consider what this means for the riskiness of life for the least advantaged. This report takes the view that social exclusion is an inherent feature of risk societies.

1) "Triple A" social provision: adequacy, accessibility, and affordability

The security afforded by state social provision appears to depend on three factors: adequacy, accessibility and affordability.

1.1. Adequacy: the quantity / quality trade-off

In the context of this report, adequacy refers to the minimum standards offered, and to the proportion of the population in need who are covered, for example, in regard to minimum income support or social care provision. In contrast to the rest of the world, Europe, west and east, has a relatively strong legal framework of social rights. Nevertheless, increasingly, countries seem to be making a choice between quantity (universality) and quality (standards) (see Appendix figure 1).

Formerly, it might be argued that in the past Scandinavian countries have attempted to increase both quantity and quality, to meet the rising expectations of standards of provision, particularly amongst the middle classes. Equally, it might be argued that former state-socialist countries had sacrificed some quality and choice, for example in health provision, for universal coverage (quantity), given the past relatively high numbers of doctors and beds per 1000 of the population (though of course some part of the difference will relate to differences in health care systems). Other countries, particularly in southern Europe, may have had more patchwork or targeted provision, for example, of minimum income protection for adults without dependants.

However, in all countries which have striven for universal coverage, there seems to have been some shift towards restriction on eligibility, introduction of targeting, and greater diversity of quality, resulting in increased choice and standards for some groups, but the risk of exclusion for some of those in need. Increasingly, in health and social care, the service provided is a ‘defined package’ and may be rather basic, with higher quality available through private payment arrangements, often funded through additional private insurance.

1.2. Accessibility

Accessibility has a number of dimensions, including:
· regulations (complexity in design and implementation)
· status (eligibility, stigmatisation)
· implementation (restrictions in coverage in practice, rather than as a principle).

The shift to closer targeting has introduced greater complexity in the design and implementation of rules, and greater need for professional interpretation, at some cost in bureaucracy, and in the ability of less advantaged people to be aware of their options and to act upon them. This latter is particularly the case in countries where there have been recent, frequent, changes to the systems of social provision.

Eligibility means being able to fit oneself and one’s household into certain defined categories. Tighter eligibility criteria may have perverse effects, resulting in individuals and households in need and who are close to the eligibility criteria, amending their household circumstances to qualify for the benefit. At worst, it is likely to stimulate fraudulent claims, criminalising a part of the population who were already disadvantaged. On the other hand, if the process of claiming is intrusive (often the case with means-tested benefits), or acquiring defined category status is stigmatising (for example status as destitute), those in need may not claim their entitlement or use available services.

Provisions which in practice disadvantage some ethnic or religious minorities in taking up a benefit or utilising a resource are also widespread. So are those which discriminate against the severely disadvantaged, for example literacy requirements, or registered address requirements to access the benefit or service. Rural location, and lack of access to transport are also problematic for disadvantaged groups in accessing services.

Incomplete implementation of legal provisions and inadequate resources to provide for those eligible, are a more serious problem in many countries of central and eastern Europe. They are in part a consequence of declining GDP immediately following transition, but are also due to the recent date and scale of change, and subsequent turbulence in the constitutions and political systems of former state socialist-countries. Nevertheless, transition countries are of course very different, and the social protection system is more inclusive and more intact, for example, in central European countries such as the Czech Republic and Slovenia, than countries of the south such as Greece.

‘Patchwork’ provision is becoming more prevalent in those countries where there was previously universal provision. Further, in formerly centralised administrative systems, in central and eastern Europe (and increasingly in western Europe, for example, in Sweden and the UK) there has been decentralisation of service provision. Local municipalities have new responsibilities for social provision and for administration of capped (limited) budgets, whether for unemployment or other benefit incomes, or for health, education or social service provision. Decentralisation should allow services that are more locally flexible and delivered closer to the population. However, local municipalities have been often faced with a choice of lowering minimum standards, targeting benefits on the most needy, or running a ‘first come-first served’ service until the fixed volume of resources are exhausted. Unfortunately, where resources are insufficient, those localities with the most severe unemployment, ill-health or poorly educated populations, are at greater disadvantage from decentralised and capped resources². Even where total resources are adequate, the question can be raised whether resource allocation takes full account of varying needs.

1.3. Affordability

In the context of this paper, affordability refers both to the ability of individuals and households to purchase goods and services, and the cost of provision. With regard to the latter, clearly many European countries are concerned with the costs of meeting health and care for ageing populations with higher expectations of quality of life. Everywhere, this has led to debates about the merits of various forms of tax-financed or insurance-based provision, and to restrictions on eligibility. In some insurance-based systems, it has also led to ‘cherry-picking’ of ‘good risks’³.

There has been a trend towards ‘de-monopolisation’ of formerly state-provided services. Many countries of central and eastern Europe have moved rapidly and in some aspects, completely, towards a market-based society. With respect to affordability for the poorest, evidence from the HDSE correspondents’ reports is that many basic needs are inadequately met through free markets and individualised private provision. Free markets may be efficient in that they clear (equalise demands and offers), but there are no floors or ceilings to market prices, and the human cost of exclusion from basic goods and services is very high. Furthermore, market-price allocation of goods and services with positive externalities (the situation where market price cannot fully reflect social benefits, as for example in health and education) is not efficient, resulting in under-provision.

The introduction of charges, for items previously ‘free’ (funded from general taxation or from the profits of state industries), is becoming widespread in health and education in central and eastern Europe, and is also a developing phenomenon in western Europe⁴. Examples are payments for books, for tertiary or nursery education, charges for medicines and for some treatments. Eligibility tightening and ‘defined packages’ of care outside of which payment is necessary, are becoming common in all countries.

The poor are most affected when resource allocation (rationing) effectively takes place by price (for example introduction of charges) at a time when income distribution has rapidly become more unequal in central and eastern Europe and in the UK, and in other countries to a lesser extent.
Price liberalisation, for example in housing costs and house prices, has resulted in price moving much more than quantity. This, which has improved choice and quality for a wealthier minority, but has excluded some lower-income new households, including many public sector professionals, from the housing market in a number of central and eastern European countries. Former systems of rationing scarce resources, for example queuing, are less disadvantageous to low-income groups (who may also have low lost opportunity time costs). Nevertheless, neither price nor queuing systems of rationing take direct account of need, nor of ability to benefit, which may be particularly important in clinical judgements. However, ‘ability to benefit’ may be a disadvantageous criterion applied to the health of the least advantaged, whose personal health behaviour (diet, smoking, etc.) age and morbidity, and limited work or career opportunities may lead to them being denied rationed treatment.

2) Risk

Governments have made numerous departures from the characteristics of ‘triple A’ social provision. Reasons have included the economic and demographic environment; but they have also made changes for ideological/cultural reasons. For example, concern with the dependency culture that comprehensive state welfare has been thought to induce, has prompted governments to increase the exposure of their populations to social risk, but at a time when the labour market pressures were such as to increase risk anyway. The result is greater inequality in life chances and social outcomes (illustrated as figure 3 in the Appendix to this chapter).

One major source of increased social risk is unemployment, which exposes families to risks of poverty and debt, ill-health and family break-up, inadequate housing and poor education achievement. Changes in labour markets have already put pressure on compulsory insurance systems, as fewer people qualify for full insurance benefits due to spells of unemployment or atypical work. In some countries, there is double jeopardy, as eligibility for one form of insurance, for example unemployment insurance, is the gateway to health insurance or other social provision. The impact of labour market risk has been increased by the abandonment of macro-economic policies for full-employment and restrictions in tax-financed social protection nets.

Risk as a concept must be distinguished from uncertainty. The former implies that the underlying events can be characterised according to a normal probability distribution, the latter implies that the likelihood of specific events is unknown. It may be the case that individual disadvantaged people face not risk, but uncertainty. For example, in the case of health, it is questionable whether individuals are able to make effective decisions about all aspects of ill-health prevention, and take appropriate action. Questions of specialist knowledge, individual genetic characteristics, environmental risk, addiction, and the cost of health promotion and insurance may prevent effective individual strategies. Even neo-classical economists have suggested that people have a ‘defective telescopic facility’, and this is even more the case where decisions are being taken on behalf of someone else, for example, parents’ choices about the education of their children.

The range and quality of information available to individuals is weaker in some countries and in some markets compared with others. For example, information is weak concerning labour market opportunities, for those individuals with limited personal networks, and where job-matching and job-placement facilities are under-developed, (as they are in a number of countries in east and west Europe). Further, casualisation of labour markets and reduction in barriers to firing as well as hiring, make it more difficult for the individual to estimate the long-run risk-reward profile for taking any job.

2.1. Risk groups

Risks of social exclusion can be characterised by how permanent the resultant exclusion is, and whether the risk is an ‘old risk’ (‘traditional’ forms of poverty connected to lifecycle risks and stigmatised groups) or a new risk, reflecting the new economic and social environment.

The poor are without buffer stocks of assets (wealth), and therefore without protection from the impact of an increasingly risky environment, and from the consequences of a bad decision. Consequently, poor people are likely to be risk-averse, since flexibility is both more risky and more difficult to achieve. The poor are likely to face increased difficulties in a fast-paced society with an emphasis on individual choice and responsibility, marginalising them, and increasing the likelihood of long-term dependency on state support as a primary source of income. Paradoxically, policies that create a more secure environment are likely to enable the majority of poor people to take risky decisions, to invest in human capital, to take low-paid jobs, to move home, to change their diet, etc.

However, legitimate business entrepreneurs are not the only ‘risk-lovers’. Young men generally, and substance-abusers, appear as risk-lovers, (rather than risk averse) in their personal behaviour. They face the consequences in an increased risk of social exclusion, and (as mortality statistics indicate) death from ‘external’ causes such as poisoning, suicide, homicide, etc⁵. While ‘external’ causes are the main cause of death of young men everywhere, the level, trend, and balance of causes are a clear indicator of the extent of risky environments and risky behaviour. Enabling alternative sources of risk-taking may be important for policy towards young people, especially young men.

Turnover between one life-condition and another, for example in and out of extreme poverty, or single-parenthood, or unemployment, is a key concern of governments. The policy requirements are clearly different if the socially excluded constitute a stream, rather than a stagnant pool of individuals and families. Appendix Figure 2 distinguishes between ‘entry risk’, and ‘exit risk’. What is being suggested by the figure is that the risks of becoming and staying socially excluded are not the same within and between groups. For example, there is a bigger risk of becoming unemployed than staying unemployed for more than one year. However, for those who become long-term unemployed, the exit probability into secure and adequately remunerated unemployment is low. What the two-dimensional diagram cannot show, is the interaction between risks, so that, for example, the long-term unemployed are at greater risk of poor health.

On the other hand, both the entry and exit risks to single-parenthood are quite high in some countries, while the entry and exit to rooftless homelessness are quite low. Policies to combat different social risks must take account of these differing risk profiles. Further, policies must also be able to identify the smaller groups who do not share the general risk profile. For example, which single parents are least likely to share the high turnover out of single parenthood, and therefore are more at risk of long-term poverty? Finally, policies for situations with low exit possibilities, such as rooftless homelessness, need to focus very strongly on prevention as well as amelioration. ‘Upstream’ preventative polices will include family and mental health policies.

II - CONCLUSIONS AND NEXT STEPS 

1) Multi-dimensional risk

The analysis outlined above suggests that rising inequality in many countries, in Europe as elsewhere, is not confined to income distribution and health outcomes. For those who were already unequal, it is an endemic part of the ‘opportunity society’. They are the losers. The trends are evident in the HDSE reports on employment and housing policy, and on the health, education and social protection systems. ‘Prevention’ policies are necessary, particularly so concerning negative life-chances with low exit possibilities. But so are policies of amelioration and dignified maintenance for those who must live in such situations. Further, there is more chance for personal change in some social contexts than others.

Limited regard for policies which address equality of outcomes will lead to a greater risk of multiple exclusions of less advantaged people, with all that this entails for their human dignity, and for societies’ tranquillity. It may call into question the democratic credentials and legitimacy of states which are not guarantors of human dignity for all their people. However, the trends evident in this report indicate that in trying to remedy one problem, the passivity engendered by social security, states have enhanced created another, the risk of social exclusion. Old welfare policies, east and west, are increasingly thought to be part of the ‘problem’ (dependency), but the new policies may cause new problems. As Part 1 of this chapter suggested, an environment that is too risky for the poor and marginalised is as likely, or more, to reinforce dependency on state provision.

In market societies, state policies that push the poorest and least advantaged into comprehensive dependency on one of the other dimensions of integration (labour and insurance markets, and family and personal networks) are not likely to increase their autonomy or human dignity. Further, more complex decisions are required of the poorest in a multi-risk environment, and complex, multi-dimensional ‘solutions’ become necessary because more people are exposed to more multi-dimensional risks (in markets, in families, and by the state). All of this is also expensive. Finally, this report suggests that the dismantling of the ‘firewalls’ between the values and the objectives of the markets, civil society and the state, can have prejudicial effects on human dignity. This is tending to reinforce the argument of many NGOs, that human rights and social rights are indivisible.

So far, this report has accepted the common conception of risk. However, in economic theory, risk as a concept must be distinguished from uncertainty. The former implies that the underlying events can be characterised according to a normal probability distribution, the latter implies that the likelihood of specific events is unknown⁶. Thus, while liberal economic theorists always model the future as one of risk, economists’ in the Keynesian tradition also accept that at times of great innovation, the economic situation is characterised by uncertainty (ignorance) about profitable outcomes. Not only are structures mutable, but actors have no rational experience on which to base decisions⁷.

In the present time, it may be the case that individual disadvantaged people face not risk, but uncertainty (for example, in the case of health, it is questionable whether individuals are able to make effective decisions about all aspects of ill-health prevention, and take appropriate action. Questions of specialist knowledge, individual genetic characteristics, environmental risk, addiction, and the cost of health promotion and insurance may prevent effective individual strategies). Even neo-classical (liberal) economists have suggested that people have a ‘defective telescopic facility’⁸ (that is, they have a distorted view of the future), and this is even more the case where decisions are being taken on behalf of someone else, for example, parents’ choices about the education of their children. In these circumstances, it cannot be assumes that a ‘rational’ basis underpins either the priorities, or the quantities chosen, of any good or service. Nor can individuals easily insure against uncertainty.

Further, the range and quality of information available to individuals is weaker in some countries and in some markets compared with others. For example, information is weak concerning labour market opportunities, for those individuals with limited personal networks, and where job-matching and job-placement facilities are under-developed, (as they are in a number of countries in east and west Europe). Casualisation of labour markets and reduction in barriers to firing as well as hiring, make it more difficult for the individual to estimate the long-run risk-reward profile for taking any job.

Thus, if the present period may be characterised as one of uncertainty (globalisation, transition, technical change), the individualisation of risk and insurance against it cannot prevent the risks of social exclusion, but may exacerbate them.

2) Next steps

2.1. Phase 3 of HDSE

The Council of Europe’s Action Plan for the follow-up to HDSE is being prepared for presentation at the culmination of Phase 3, the conference in May 1998. The Conference will draw its structure from Phase 2, that is, an orientation to solutions, and an identification of the roles and responsibilities of the actors, viz., the role of the national level and the legal framework for vulnerable groups; the role of the local level of administration and integration; the role of community and personal networks of the least advantaged; the role of civil society, including NGOs and business organisations. The reports of Phase 2 will help to define the agenda for the Conference, and contribute to the content of the Action Plan for the Council of Europe, in its new phase of work.

The matrix below summarises the key issues and groups at risk which are identified in the Executive summary to this report. Clearly, the matrix does not cover all the issues and groups identified in the course of this report. However, it may form some focal points for the next steps outlined in this section.

2.2. Table 1: A summary of key issues and groups identified in this report

	Issues	Groups
Health	§ the link between income inequality and mortality and morbidity	§ middle aged men § low-income groups
Employment	§ link between unemployment and the risk of exclusion from social protection § the threat of compulsion in active labour market policies	§ long-term unemployed § people with a disability § mothers of young children § Roma
Social protection	§ low real value of benefits § lack of generalised minimum income support	§ long-term unemployed § frail elderly § those reliant on discretionary social assistance
Education	§ drop-outs from school and exclusion from school § unequal opportunities for academic education	§ low-income groups § Roma § minority language groups
Housing	§ shortage of affordable small apartments to rent § housing segregation and spatial disadvantage	§ low-income groups § those affected by restoration and restitution policies § those living in illegally constructed housing or without appropriate documentation § those evicted without right to rehousing

2.3. Progressing the Revised European Socail Charter⁹

However, some suggestions can already be made. Although this report indicates that the legal framework alone is not sufficient to protect people from the risk of exclusion, it is a necessary framework for the least advantaged groups. The revised European Social Charter is open for signature. Of course, expectations must be realistic in the economic circumstances, and aspirations must be reasonable. However, for effective impact, the control procedure must be able to ask the right questions, within the framework of solid principles of a distinctly European approach to human dignity and social integration. The key issues¹⁰ derived from the five policy sectors (health, employment, social protection, education and housing) covered by this report, can be used to refine the content of the control procedures. Theprocedures (the key issues can be found in the Executive Summary attached to this report). The Action Plan and the Conference must reinforce the value of the new Collective Complaints procedure, and ensure access to it by a wide range of social NGOs.

2.4. Establishing effective monitoring

This report makes it clear that implementation of legal provisions is inadequate or incomplete in many countries. Clearly, there is a question of resources available in member states, but the revised Charter must focus on implementation of rights necessary to protection against poverty and exclusion. Nevertheless, the Collective Complaints procedure is a reactive mechanism. It seems necessary, as states rapidly reform their systems of social protection and social integration, that there is a means of continuous monitoring of the risks of exclusion in Europe. A formal body with a high status would be appropriate.

2.5. Enhancing research capacity

Such a formal body with a remit in the field of social exclusionintegration and social integration could have at its disposal some research capacity in order to develop and service its agenda in partnership with national governments. The HDSE initiative could continue as a focus for this capacity. It is clear from this report that Russia and other new member states, need to be included in any research or reporting system on human dignity and social exclusion.

2.6. Sharpening the focus of the ed work-programme

The Council of Europe is considering some restructuring to focus its work more coherently and minimise overlaps within and between Directorates. Social cohesion could become the focus for the work of a revised Directorate in the economic and social field. The matrix developed for the HDSE project could form the frame for a work programme which focused on :
· diagnosis of the implications of cross-national trends in the economic, social and cultural environment for social cohesion;
· identification of pathways to integration, and key actors and policies.

Each cell of the HDSE matrix, by policy sector, actor and risk group, could constitute a project or programme of work. A rolling programme of research could tackle these in order of priority. The results of the research could not only assist the monitoring body, but assist governments with the information necessary to enhance the implementation of their commitments to the European Social Charter.

2.7. Defining a high-profile index of cohesion

With regard to trends in the risks of exclusion and the opportunities for integration, detailed policy-oriented research could be supplemented by a high-profile, regularly published index of social cohesion. Perhaps the Council of Europe could enhance its in-house capacity to gather and disseminate data on the overall risks of poverty and exclusion. It would be a valuable resource in raising the political profile of the need to combat exclusion, to have available some kind of Human Development Index, and/or Well-Being Index applicable across Europe, east, west, north and south, and easily comprehensible by a wider public. Otherwise, perhaps there could be co-operation with other inter-governmental and international organisations to develop and publish such an index. Such an index would present a different picture of quality of life to those based on GNP, and some inclusive, low-income countries may score more highly on such an index, than they would when ranked by GNP.

2.8. Increasing visibility

New methods and resources for promoting and disseminating research and other output seem necessary, as the Council of Europe documentation is not sufficiently high-profile in some parts of the national social and political arenas.

2.9. Consolidating and developing partnerships

A continuing partnership, with a broader range of social NGOs, municipalities and other partners, may be helpful in developing the Council of Europe work programme and disseminating its results. The current arrangements probably need restructuring if communication is to be more effective, and more timely. The enhanced arrangements should certainly increase co-operation with the least advantaged groups or their representatives.

2.10. Encouraging best practice

At the national level, it is clear from this report that national data collection falls short in identifying groups at risk of social exclusion. This must present problems in efficient targeting of the scarce resources available, particularly in central and eastern Europe. There also seems to be a limited availability of policy evaluation studies. It may be necessary for some countries to seek resources from outside the country to improve data and evaluation, specifically in the area of social exclusion.

The proposed body for formal monitoring of matters concerned with social integration and social justice could establish continuing working arrangements for the exchange of best practice among member states of the Council of Europe, specifically on national and local strategies for cohesion of persons and territories.

APPENDICES 

Figure 1: Adequacy of social protection

Figure 2: Risk / turnover relationship for groups at risk of exclusion

Figure 3: The impact of reforms to health and wealth creating systems