[JonFish85]

Basic math:

£240 billion / 64.1 million people in the UK = £3,744/year (assuming no government overhead).

Seems low. That works out to be £312/mo/person. That certainly wouldn't seem to replace many costs (especially pensions and the like).

Let's say you wanted it to be £500/mo/person. That'd run you £384.6 billion/year. Add in, say, 5% overhead and you're at £403 billion/year. Where does that money come from? If you stick with the idea that the income is universal, you're dishing out £6,000/person/year, waiting a year, then taking it right back via taxes. Which seems incredibly wasteful, and might drive up that 5% overhead number.

[DougWebb]

You also have to factor in the fact that for most government welfare-type agencies a large portion of their budgets are spent running the bureaucracy, rather than going out to the people. Universal Basic Income greatly reduces the overhead costs. So £1 of Basic Income doesn't replace £1 of a current welfare program; it replaces £2 or £3 of the current program.

Put another way, if the current welfare spending is £120 billion/year, the recipients are only getting £40-£60 billion/year. So that's all of the Basic Income you need to replace the welfare spending, leaving you with a £60-£80 billion/year surplus.

Obviously, the actual amounts depend on the detailed overhead costs for each agency that would be replaced by a UBI program. But I'd be willing to bet on anywhere from 20% to 60% savings for each agency. UBI can be highly automated; with electronic payments and ties to a tax database, it can be as little as a smallish office of administrators and DevOps, and a server farm.

[saalweachter]

Eh, government bureaucracies in first-world aren't as inefficient as some people make a living claiming. In the US, administrative expenses for Social Security run less than 1% of the budget. Medicaid and Medicare run with similar margins. Compare this to private-sector insurance in the US, where 80-85% "medical loss ratios" (ie, the fraction of premiums paid out for medical care, as opposed to the fraction kept for administration, advertising, and profits) are common; even in the good old days (before the excesses of modern executive compensation, profits, and advertising) MLR peaked at around 95%.

The simple fact is that many social welfare programs are just expensive, because there are a lot of people being helped and the quantity of money you need to spend to make any difference is just adds up.

[logfromblammo]

Bear in mind that "administrative expenses" can mean one thing to ordinary people, and something quite different to a government-sponsored accountant.

When Medicare/Medicaid pays $150 for the same type of crutch that sells in a local pharmacy for $15, that difference does not go into "administrative expenses". I might prefer the expense of a human employee driving to Walgreens, buying a crutch off the shelf, and delivering it by hand to the patient that needs it, rather than paying a hospital that big markup just because that's the most they can charge without the benefits management program automatically denying the expense. Because even if it costs $135 in labor and transportation for a human to do all that, the mere possibility that might happen would discourage the hospital from charging significantly more than the pharmacy across the street for exactly the same item, or from charging different prices to different people based on their insurance plans.

It would even work to just give the patient $150 in cash, and tell them to buy a crutch with it and keep the change. Or carve one out of a tree branch and keep all of it. If they end up not having a crutch, it won't be because they couldn't afford it.

You can't rely on a bureaucracy's reports on itself to reveal the inefficiencies of that bureaucracy. There is just too much political pressure to cook the books.

[pekk]

What distinguishes normal accountants from these apparently corrupt "government-sponsored accountants" who "cook the books"? Do they have pointy ears or forked tongues?

[logfromblammo]

Normal accountants don't have 300 pages of federal regulations telling them exactly how they need to lie in their reports.

They have 20 pages of corporate guidelines telling them how they have to lie. Zing!

[eli_gottlieb]

The plural of anecdote is not data.

[thomnottom]

Your basic math is assuming the money is distributed to everyone. Wouldn't it make more sense to only give it to adults? That knocks out probably about 25% of the population so you're looking at 48 million. That gets us to £5000/year. Of course the article mentions differences between what single people get and what couples/families get which would also bring down the numbers.

[JonFish85]

The reason for that is to cover the cost of raising kids (in my extremely basic example). If the idea is to replace things like welfare, food stamps or whichever programs cover the cost of raising children, I think it's easiest to assume that everybody gets the same dollar amount (the de-facto average amount). There's a lot of ways to try to dice up the numbers (family size, married/unmarried, etc), but I think as a basic example, the numbers are fairly solid.