The many ways that social policy is run through the tax system is still largely neglected in sharp contrast to the constant scrutiny and debate over value for money in the welfare state. Fiscal welfare has considerable costs and significant effects on who gets what, when and how. This was pointed out over sixty years ago by Richard Titmuss, the first professor of social administration (Titmuss, 1958, chapter 2; and lecture delivered on 1 December 1955, in Alcock et al, 2001, pp 52–70). In setting out ‘the social division of welfare’, Titmuss challenged the conventional wisdom that redistribution was confined to the welfare state, identifying two other forms of intervention which affect the distribution of welfare and resources – fiscal welfare and occupational welfare, the subject of Chapter Eight (Sinfield, 1978).

By giving tax reliefs the government encourages particular activities and groups, and provides benefits. As a result, tax is forgone that would otherwise have been collected. However, ‘allowances and reliefs from income tax, though providing similar benefits and expressing a similar social purpose in the recognition of dependencies, are not … treated as social service expenditure’ (Titmuss, 1958, p 44).

The term ‘tax expenditure’ (Surrey, 1973) was introduced to contrast with public expenditure and covers such losses of revenue, whether concerned with welfare or any other objective. The Organisation for Economic Co-operation and Development (OECD) has pioneered the term ‘tax breaks for social purposes’ (Adema et al, 2011, 2014) although these do not include forms of fiscal welfare that are not directly comparable to public programmes (Sinfield, 2012, p 22).

The title of this chapter is derived from the pioneering account of Sinfield (1978). While ‘analyses’ may promise a little too much, this concluding chapter aims to reinforce the importance of the mixed economy of welfare (MEW) and the social division of welfare (SDW). Drawing on the material from earlier chapters, it examines the importance of the MEW and SDW over time and space. The MEW and SDW are important in an analytical as well as a descriptive sense. It is important to examine changes in the complex three-dimensional space of provision, finance and regulation rather than focusing on simple and misleading changes in one dimension such as provision. It then examines how the MEW and SDW are linked to important debates in social policy, and how they are associated with complex differential impacts on service users.

The MEW and SDW are vital, but relatively neglected, concepts in social policy. Mayo (1994, p 26) writes that ‘the MEW has been fundamental to the welfare state in Britain, although the mix has clearly varied between services and over time, just as the mix varies between Britain and the USA, for instance’. John Stewart (Chapter Two) draws attention to the historical importance of the MEW. While many authors claim that the mix changes over time, he points out that the components of the MEW themselves change over time. For example, the ‘voluntary sector’ in the 19th century was not the same as the ‘voluntary sector’ today. Nevertheless, the different components of the MEW in the UK follow a fairly broad trend – or ‘moving frontier’ – over time.

The informal sector is perhaps the most important but least visible component of the mixed economy of welfare (MEW). For example, Johnson (1987, p 65) stated that in the case of elderly people not living in institutions the informal system is almost certainly more important than both the statutory and voluntary sectors. More recent commentators confirm that the most important source of welfare for disabled and older people in the UK is informal care provided by family and friends (Pickard, 2016).

Jenson (1997) suggested three key questions that needed to be placed at the heart of any care-centred typology and analysis of social policy: Who cares? Who pays? How is care provided? However, the informal sector may be rather different from the other three (formal) components (eg Qureshi and Walker, 1989; Finlayson, 1990). This suggests that it is difficult to apply the three-dimensional analysis of provision, finance and regulation to informal care.

Informal provision is usually regarded in terms of ‘provision’ in the sense of hours of care. There is limited ‘finance’ like the state paying for (say) private hospitals, as informal care is unpaid, although there are some policies in place such as providing carers with cash benefits or benefits in kind (Glendinning, 2016; discussed later in this chapter). However, it has been estimated that the contribution of carers such as family and friends is worth about £132 billion per year in the UK, roughly equivalent to the National Health Service (NHS) budget (Carers UK, 2017). Finally, there is limited ‘regulation’ of the ‘private sphere’ of caring.

In Essays on ‘the Welfare State’, Richard Titmuss (1963, p 53; note the use of inverted commas) pointed to ‘three different systems of social services’ (social, fiscal and occupational welfare) which ‘are seen to operate as virtually distinct stratified systems’. The Labour politician and author, Frank Field (1981) pointed to Britain’s five welfare states: the traditional welfare state; the tax allowance welfare state; the company welfare state; the private market state; and the unearned income from inherited wealth. This text focuses on these wider welfare states, which tend to be less visible than traditional state or ‘social’ welfare. The distribution of welfare services through a range of social mechanisms beyond the state itself has been termed ‘one of the most important categories in the contemporary study of social policy’ (Spicker, 2008, p 136). However, there seems to be no broadly accepted or dominant term to signal this welfare beyond the state. Different writers point to the mixed economy of welfare (MEW) (eg Murphy, 2006), welfare pluralism (eg Dahlberg, 2005), the welfare mix (eg Lee et al, 2016), the welfare triangle (Pestoff, 2014), the welfare diamond (eg Christensen, 2012) or the care diamond (eg Razavi, 2007). Most writers appear to use these terms broadly interchangeably (Johnson, 1999; Dahlberg, 2005).

Moreover, the MEW and SDW tend to be invisible or hidden. Burchardt and Obolenskaya (2016, p 217) state that the ‘pure public’ (public provision, finance, and decision) segment is what we might consider to be the archetypal post-war British welfare state. Prasad (2016) points to the terms that have been used to describe the ‘indirect’ and ‘private’ American welfare state: hidden, divided, submerged, and invisible.

Market welfare incorporates provision of services by organisations independent of the state, finance from private business, and individuals purchasing services from their personal resources as ‘welfare consumers’. While the ‘state’ elements of welfare often receive the greatest attention in policy and academic contexts, most developed countries will also have market elements to their welfare funding and provision. In many cases such funding and provision will in fact have pre-dated that from the state (see Chapter Two). Market welfare can exist in parallel to the public elements or be integral within the overall welfare system overseen by policy makers. Burchardt and Obolenskaya (2016) estimate that in England in 2007/8 public welfare spending accounted for £396 billion and private spending £221 billion – so almost a third of the total welfare spend was from private sources. In some countries market welfare may be a voluntary option which those with sufficient resources can access in place of or alongside state provision. In others it is the only option, unless the individual or family meets a low-income or other threshold such as age or disability. For example individuals may need to meet their social care costs from their personal income or savings following financial assessment of their personal resources, or to pay for out-of-pocket expenses such as school meals, uniforms or trips (Table 4.1). It is rare, in the UK at least, for individuals to have no call on any aspect of public welfare support, but there are those who largely do so – a group that Burchardt and Propper (1999) categorise as the ‘private welfare class’.

Early comparative analysis, where it was not simply atheoretical, tended to be concerned to explain levels of state expenditure. It worked with a view of the ‘welfare state’ that either saw welfare as essentially something provided by the state, or with a notion that development entailed the replacement of other sources of welfare by state welfare. But then attention began to be given to variations both in the extent of the welfare provided (particularly the extent to which it contributed to the reduction of inequality) and in the way in which it was provided. Regime theory has become the dominant approach to this issue, it is discussed in the next section and used as a way of orientating this chapter as a whole.

While Esping-Andersen’s regime theory (1990) represents a crucial move away from the unitary developmental approach which saw states as on a general evolutionary path in which, with economic development or democracy there would be an inevitable growth in state welfare, its emphasis on ‘welfare regimes’ still puts the state at the very centre of the analysis. However, it also brings out very clearly issues about the state–economy relationship. This is particularly embodied in Esping-Andersen’s use of the notion of ‘decommodification’ (the extent to which access to benefits and services is detached from determination by the market). His explanation of the extent to which decommodification occurs is then based upon an analysis of politics, with the strength of social democratic parties the crucial variable.

Esping-Andersen’s regime model, involves the postulation of three regime types:

• the social democratic regime, the most decommodified type, characteristic of the Nordic countries;

• the liberal, the least decommodified, characteristic of the United States, the United Kingdom, Australia and New Zealand;

• an intermediate type, which tends to be rather confusingly labelled as either conservative or corporatist, characteristic of much of continental Europe (and, particularly controversially, Japan) where social benefits are extensive but very much determined by labour market status.

It is a cliché, but a truism, that historical analyses reflect the times in which they are produced. This is as true of writing about the history of social welfare as any other form of historical enquiry. Much of the material produced during the era of the ‘classic welfare state’, that is from the end of the Second World War down to the early 1970s (Lowe, 2005), consequently focused almost exclusively on the role of the state. Texts such as those by Bruce (1961) and Fraser (1973) told, in a ‘Whig’ version of welfare history, a story of almost constant progress and achievement, the realisation of the post-war settlement and the attainment by Britons of ‘social’ rights and citizenship. The last was, of course, famously articulated by T.H. Marshall (1950). For the most part, then, there was in these accounts little attention to forms of provision, or influence, which did not centre on state activities, and predominantly those of the central state.

However, even before the upheavals of the 1970s and subsequent decades there were signs that this narrative was problematic. Richard Titmuss, Britain’s leading authority on social policy from the 1950s until his death in 1973, constantly challenged the idea that the ‘welfare state’ was a complete or finished product, one reason he always put the phrase in inverted commas (Titmuss, 1958). The ‘rediscovery of poverty’ of the 1960s suggested that all was not well with state provision of welfare and hence that the history of the ‘welfare state’ was not one of unequivocal progress.

This chapter addresses an important but largely overlooked aspect of the UK’s welfare order, namely, the non-wage benefits or ‘supplementary reward systems’ provided by employers for their employees. Traditionally called ‘occupational’ or ‘work-based’ welfare, it forms a key strand of Titmuss’s (1963) social division of welfare (SDW) and is an entity that has gained significance in the mixed economy of welfare (MEW) over the last decade. Despite this, detailed analyses of many of its benefits and services remain sparse. Whether this is because the domain is considered marginal to mainstream policy matters is unclear. What does not help however are deep-rooted features of the terrain, not least, the diversity and complexity of provision and the conceptual and methodological difficulties involved in its analysis.

The conceptual issues mainly emanate from two sources, the location of the subject-matter at the crossroads of several academic disciplines (social policy, employee relations, social history and human resource management), each with its own research problems and lexicons for addressing them and, in the case of social policy, uncertainty about the breadth of the field of inquiry. The methodological concerns arise from the difficulties of accessing good-quality data. There is systematic government information on some benefits, partial data on others but very little on the bulk of provision. Gaps can be filled by research undertaken by consultancies, trade unions, professional and trade associations and, in a few instances, academics. Great care, however, needs to be taken given wide variations in validity and reliability and the reluctance of some organisations to reveal the provision they offer.

Weber (1918, p 1) defined the state as ‘the human community that (successfully) claims the monopoly of the legitimate use of physical force within a given territory’. Authority for this coercion monopoly is usually located in a democratic process through which the state is seen as representing the collective citizens’ will. However, the nature and legitimate scope of state power is contested, with Marxists asserting that: ‘The executive of the modern state is nothing but a committee for managing the common affairs of the whole bourgeoisie’ (Marx and Engels, 1848, p 32), a critique augmented by depicting the state’s ‘accumulation’, ‘control’ and ‘legitimation’ functions. Some state activities, such as investment in worker productivity, help capitalism to make higher profits but ‘social expenses’, necessary to maintain social control, and ‘social consumption’ – to justify capitalism – are a drain on capitalist accumulation and likely to produce a capitalist crisis (O’Connor, 1973: Offe, 1984).

Theorists supporting an extensive state – directly involved in enhancing citizen wellbeing and redistributing income – claim that the state can embody the ‘common good’ wherein citizens find an identity based on mutual rights and obligations. Known as ‘idealist’ or ‘organic’ theory and reflected in ‘ethical socialism’ (Dennis and Halsey, 1988), this view was set out by Thomas Hill Green in Lectures on the Principles of Political Obligation (1895) to form the basis of ‘reluctant collectivism’ (George and Wilding, 1994), the philosophical basis of the 1906–11 Liberal reforms (Renwick, 2017). The Fabians were also influenced by idealist/organic theory. Hill (1993, p 592) notes that Sidney Webb:

was a particular admirer (and frequent imitator) … of the metaphor of society as an organism, as a method of explaining/illustrating the fundamental interdependence of all sections of society.