The LGiU is marking ‘International Day for the Eradication of Poverty’ by publishing a briefing bundle on poverty and welfare issues.
The first challenge is that the UK currently lacks an official measure of poverty, since the definition and targets in the Child Poverty Act 2010 were scrapped by the Conservative government in 2016. They questioned whether the rather blunt measure of poverty adopted by the Labour government – 60 per cent of median household income before housing costs – fully captured the nature of poverty. Although the previous measure has been retained in Scotland, Wales and Northern Ireland, its usefulness is still debated. This has prompted the non-partisan Social Metrics Commission (SMC) to propose a new way of measuring poverty (Member and Follower briefing), taking account of income, other resources and unavoidable costs like housing and childcare, improving on previous approaches. The Department for Work and Pensions has announced it will use the new measure in its experimental statistics. Agreement on how to measure poverty would help focus efforts and allow progress to be tracked.
The second challenge is the scale and stubbornness of the problem, as shown in the SMC’s second report and annual research by the Joseph Rowntree Foundation (Member only briefing). The poverty rate is currently 22 per cent, but this headline masks differences between population groups. Nearly half of families with a Black head of household and over a third of Asian-headed households are in poverty. Forty-eight per cent of those living in poverty live in a household where someone is disabled. Depth of poverty also varies, with 8.4 million of those in poverty more than 25 per cent below the poverty line, and 4.5 million more than 50 per cent below.
Seven million people (11 per cent of the whole population) are in persistent poverty, meaning they are in poverty now and have been for two of the last three years. Households with children, people living in lone-parent families and workless families are disproportionately affected by persistent poverty. It is easier for those just below the poverty line to get out of poverty, compared to those who are well below it: there is a link between persistent poverty and depth of poverty. Three-fifths of those more than 50 per cent below the poverty line are also in persistent poverty, compared to a third of those just five per cent below the line.
These figures starkly show the scale of the problem, but they do not really capture what it’s like to be poor in the UK. Challenge three is to get better evidence on how poverty impacts on and interacts with different aspects of people’s lives. This is especially relevant to local authorities and civil society groups on the frontline supporting people with multiple needs and disadvantages. Here the SMC’s ‘lived experience indicators’ reveal that 18 per cent of people in poverty live in a family where no one has any qualifications, compared to nine per cent of those not in poverty. Twenty-one per cent of those in poverty believe that people in their neighbourhood cannot be trusted, compared to nine per cent of those not in poverty. Eight per cent of people in poverty rarely or never feel close to others, compared to four per cent of those not in poverty. The chain of cause and effect is unclear, but certain social factors are clearly associated with poverty.
Poverty is multifaceted but at its heart, it is simple. People in poverty don’t have enough money to meet their needs. One side of the equation is low incomes. For the poorest, this could be addressed by increasing benefits and reversing some of the harshest welfare cuts of the past few years. The Government has tackled some publicised problems around Universal Credit, but issues remain. An All Party Parliamentary Group recently recommended further changes(Member only briefing); the Lib Dems announced further reforms at their party conference and the Labour party has pledged to replace Universal Credit altogether.
The Conservatives, Labour and Lib Dems all announced plans to increase the Minimum/Living Wage significantly, which should help many in work. Yet the long-term answer to low pay is to improve the skills of the UK workforce and solve the UK’s low productivity rate; this will be even more important for the post-Brexit economy.
The other side of the equation is the ‘unavoidable costs’ of living, such as housing. Recent research by the National Housing Federation found that nine out of ten rented properties are unaffordable to those on housing benefits. This is partly due to changes to the Local Housing Allowance (LHA) rules and the benefit freeze, which means benefits have not kept pace with rising rents. Local authorities are finding it impossible to meet housing needs. Many families face lengthy spells in temporary accommodation before they find a settled home, which is both expensive to the public purse and stressful for families. The LGA is calling for more funding to fill the £421 million homelessness funding gap. Housing charities want LHA to be increased so that it covers the cost of rents.
These changes would help in the short term and would be welcomed by local government. But rents have been rising sharply due to distortions in the UK housing market. All the main Westminster parties want to increase affordable housing supply though they differ on their preferred policies. There are no quick-fix solutions to the housing crisis.
The intractability of poverty in the UK is dispiriting and perplexing, given the many interventions made over decades by national and local government. A different approach, based on better evidence, is surely needed. Local authorities have a key role to play. The SMC’s work on measuring poverty could usefully inform local service design and delivery but funding is also needed.