ADMINISTRATION (Cost).

Oral Answers to Questions — Unemployment. – in the House of Commons on 2nd August 1922.

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Photo of Mr Walter Smith Mr Walter Smith , Wellingborough

20.

asked the Minister of Labour what is the estimated cost per insured person receiving benefit per week of administering unemployment benefit in the case of a benefit paid directly through an Employment Exchange, and in the case of benefit paid through an association having an arrangement under Section 17 of the Unemployment Insurance Act., 1920; and can an explanation 'be given of the way in which the amounts laid down in the new scale of administration grants for associations were calculated?

Photo of Mr Neil Maclean Mr Neil Maclean , Glasgow Govan

22.

asked the Minister of Labour whether any inquiry was made by his Department as to the cost of administering the State unemployment benefit by any of the large trade unions before the administrative grant was reduced; if so, what was the result of such inquiry; whether he is aware that the largest trades union administering State unemployment benefit, with a membership of over 400,000, has ceased to administer the Act owing to the reduction already in operation and in view of the fact that the new administrative rates are insufficient to cover even the bare cost of work done; and whether any of the trades unions have expressed their willingness to accept the Ministry's proposal?

Photo of Mr Thomas Macnamara Mr Thomas Macnamara , Camberwell North West

As the answer is a long One, I shall be obliged if my hon. Friends will allow me to issue it in the OFFICIAL REPORT.

Following is the answer:

I have had before me certain statements as to the payments made to branch secretaries for this work. But I am afraid I cannot regard these payments as determining the grant which should be made out of the unemployment fund. The grant is intended as a contribution towards the additional cost of administration occasioned by the payment of State benefit through an association already paying out-of-work pay out of its own funds. I have further to bear in mind that there is no saving of administrative expense to the Department when benefit is paid through associations. On the contrary, the grant to the associations is wholly an additional expense. As a matter of fact, before the revision of the rates, while each payment of benefit made direct by us cost about 1s. 2d., the cost through an association was about 2s. And even now, after the rates to associations have been so far revised, the administrative charge for each benefit paid through associations costs the fund about 6d. more than the corresponding charge where benefit is paid direct by us. Several trade unions, including one with a membership of over 400,000, have terminated their arrangements recently, giving the reduction in the grant as their reason. 140 associations with an estimated membership of 1,100,000 are continuing arrangements under the present rate of grant.