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Comparison of Residual and Institutional Models of Welfare

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Published: 11th Feb 2020

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Identify what you understand by the ‘residual’ and ‘institutional’ models of welfare and discuss to what extent you think it is useful to apply these models to the UK today.

The idea of Welfare and the Welfare State within the UK came about post World War Two, mainly after the creation of the Beveridge Report which looked at the current social security systems in place within the UK (Castles & Pierson, 2007). However, there was never a specific historical turning point when leaders made a definite decision to devise a welfare state (Ashford 1986). Instead it came about from a much more gradual and informal process where politicians and civil servants used their aspirations and political ideology. Rowbotham (1994) states that because of the ever-changing meaning of welfare and their system, there needs to be an examination of attitudes towards the state and its meaning of welfare. With this, it is important to examine the different models of welfare and how they fit in with the current political climate, Society and welfare systems. It is argued that there are two main welfare models in modern capitalist society Wilensky and Lebeaux (1965) describes these as “Residual” and “Institutional” models of social welfare. These are two different ways of thinking when it comes to the state’s relationship with social welfare and its role in helping its citizens. 

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The residual model of Welfare is often described as an optimistic one as its focus is on the economic growth of social welfare and society. Residual models often believe that with economic growth and more diversified prosperity of the people such things such as poverty will eventually decline (Pinker 1971). Residual models favour a limited amount of state involvement in providing welfare as they see intervention as being in place purely for poorer members of society and providing a safety net for those otherwise, unable to cope financially and believe responsibility in meeting citizen’s needs in terms of level of benefits for individuals and the proportion of national insurance spent on state services should be minimal. This is often described as “Residual selectivity” or means tested welfare, something of which has been the subject of controversy in the UK due to the significant number of people who fail to claim the means tested benefit which they are eligible (Bennet 2012).These “nets” that the Residual model talks about would include certain programs which are limited solely to the poor they include things like emergency housing assistance, Food vouchers and limited benefits. With the aim of social welfare policy under this model is to decline the minority of needy groups (Pinker 1971) supporters of the residual model also believe that non-statutory agencies, these are agencies that function without government funding and rely on funding by the people or are a registered charity, should play a primary role in terms of welfare this mean they wold fill in the gaps that statutory services and the government cannot (Mishra 1981). This model comes with criticisms for example, Esping-Anderson (1990) argues the model often disregards working class organisations and that it very much focuses on the idea that “Politics matters” and that partisan configurations and political choices decide policy.

On the opposing side of Social Welfare models, we have the Institutional model. This model is more closely related to differing interpretations of the effects of economic growth and to the extent to which either “convergence or “embourgeoisement” within the systems have occurred (Pinker 1971) Institutional model theorists put more of importance on the issue of the persisting incidence of poverty rather the growth of affluence. This model is described as a “redistribution model” and is marked by universal rights based, non-stigmatizing and redistributive state benefits and services and believe that this should just be a normal function of society today. Institutional methods sees extensive social service provision as a key and necessary part of modern capitalist society, some of the main features and believes of the state involvement within this model include the idea that state responsibility in meeting needs has to be optimal, They believe there needs to be an extensive range of statutory services this could range from early year services when helping children and local GPs and family doctors for people living in a community. They also say the majority of the population should be covered by these services (Alcok 2012). The biggest difference between institutional and residual models is around means testing and the nature of clients. Institutional models believe the use of means test should only be a secondary model and that benefits provided by the state are for all citizens not just the poorest in society.  This essentially means that an institutional system is one in which need is accepted as a normal part of social life. Welfare is provided for the population, in the same way as public services like roads or schools might be. In an institutional system, welfare is not just for the poor it is for everyone (Spicker 2013).When implementing the institutional model of welfare it is important to look at the dominant values of the government at the time, as certain believes of the state at the time could add limitations of implementation of certain systems and we can see elements of this in the UK today.

Esping Anderson in his writing of the in the “Three Worlds of Welfare” provides examples of the social institutions that are likely to be shaped by the welfare state including working life, employment and the labour market. Many scholars point out that ideas of welfare are not a free-floating set of traditions, rather they are closely interlinked to large political projects of democratic evolution (Daly 2011) It is also noted that these different projects are not necessarily completely oppositional. When it comes to the social administration of welfare, It tends to operate within the residual and institutional models and with these models there are certain welfare regimes which it applies, which in term effects the institutions shaped by welfare. The UK today is a capitalist society and within a capitalist society there are three types of welfare states identified. First there is a liberal state which is made of an individual autonomy and choice market which exchanges the best source of welfare equality before the law, and rights. We then have a Social Democratic state which individuals and groups are political actors within the democratic state and has the state at the forefront of providing welfare and social and civil rights are essential, this is very clearly linked with the same principles of the institutional welfare model and is the most common of the states in the 21st century (Hemerijck 2012) There are also elements of the third type of state, Conservative within the UK. This type of state focuses on individual and communal activities of organisation and welfare resides in traditional forms of community and society and the role of the family and informal institutions is vital, here we see how the residual model of welfare has played its part and influences certain policies and trends under conservative ran states (Rothstein 2002). Undoubtedly an important feature of a country’s system of welfare is the role of the extent of the state’s responsibility for basic needs and as the UK is a mix of both institutional and residual.  This is shown in terms of the welfare-to-work schemes introduced by the state in 2011 which aimed to get 80% of Adults into some form of employment in an aim to reduce the number of citizens claiming unemployment benefits and prime minister at the time Gordan Brown, when discussing the need for the scheme said “This Government inherited a welfare state weighted heavily towards rewarding and supporting people who were not actively seeking to improve their situation, whether by looking for work or by taking part in training” (Reforming welfare to reward responsibility report 2008)

This type of thought can be clearly linked back to the residual model of welfare as it is looking to reduce the level of benefits provided to citizens while looking to reduce the “needy groups” through economic growth. Further analysis of what was to become the Working Tax Credit ( Hirsch, 2004 ) addressed similar issues, and some fundamental questions about the potential long-term impact of wide-ranging earnings top-ups for the development of low-paid labour markets, As the working tax credit is means tested both for working people on low incomes and with children again we see how the residual model has been applied in the UK today.  We can also see elements of the residual models of welfare in the UK today in terms of Foodbanks. Over 35,000 people in the UK have visited foodbanks like Trussel Trust an organisation that operates out of more than 1,200 centres across the UK and provide a minimum of three days’ emergency food and support to people experiencing crisis, organisations like this are on the increase and with increasing welfare cuts the state is currently relying on these non-statutory agencies to help with welfare issues which the residual model as talked about sees as a primary way of dealing with welfare (Sykes 2012)

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Just as we can see elements of the Residual Models in the UK there are also clear indications of Institutional ways of thinking, when it comes to welfare and it is even argued that the state in the UK today takes on to much state responsibly in meeting all its citizen’s needs (Wilson 1991) Under an institutional model, this is optimal that the state does this and one way we can see this is through the 2012 ‘Social justice: transforming lives’ report which explains the government’s plans for giving individuals and families facing multiple disadvantages the support and tools they need to turn their lives around such as promoting work for those who can as the most sustainable route out of poverty, while offering unconditional support to those who are severely disabled and cannot work, While also putting a focus on prevention and early intervention of poverty. In relation to housing within the welfare system housing conditions for the population are evident to be in a lot better standard than they use to be and today housing benefit is the largest part of state spending on housing with 11% of the UK government welfare expenditure being housing benefits, the state has also played a key role in keeping down council rents to make housing affordable for those who need it the most (Hills 1991) Although non-statutory services in the UK play a big part in welfare, it cannot be denied that there are still an extensive amount of statutory services which help all citizens especially local council, through local councils there are a range of services all citizens in society not just the poorest can avail of such as applying for equipment for your home If you have a disability and even getting information and helping apply for disability care centres in the users local area. Local councils now also assist in helping parents find child minders, apply for needs assessments for children in terms of learning disabilities and even offer support for paying for childcare.

It is clear the UK welfare state today has a number of opposing theories about its responsibly in terms of welfare and its citizens (Mishra 19981) A welfare state at its core even within different models engages the responsibility of a state to secure the basic modicum of welfare to its citizens. It seeks to know whether social policies are fit for purpose and help in legitimization the market process. In this essay I have tried to outline the connection that systems within the UK today have clear and sometimes not so clear links to both the Residual and Institutional models of welfare in terms of the type of benefits provided to its citizens, the role of statutory and non-statutory bodies and the current work and reports being done by the state around welfare reforms. Although both these models of welfare have been more closely linked, to countries such as the USA and Norway there is substantial evidence that both models are within and applied to welfare within the UK today.


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  17. Wilensky, H. (1965) Industrial society and social welfare. 2nd ed. London: Macmillan.
  18. Wilson, T (1991), The State and Social Welfare. Longman Group. London


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