How working together to combat poverty works for us all

Mike Danson, Heriot-Watt University

Today, HM Revenue & Customs has named and shamed a number of large national chains and about a dozen smaller Scottish businesses in the personal services sector for failing to pay workers the national minimum wage. Many many more profitable companies are paying less than the Living Wage and are employing some of the very poorest on zero hour contracts, people who are desperate for wages to put food on the table, shoes on their children’s feet, to heat the house in winter, and pay their way through college and university. The workers are doing what they have been told to – work your way out of poverty. But working your way out of poverty isn’t working, trickle down economics doesn’t work, and it’s going to get worse as Working Tax Credits are withdrawn and other benefits cut.

Researching this using Treasury, DWP, EU and other official statistics and the excellent work by Profs Christina Beatty and Steve Fothergill recently highlighted some horrendous impacts on the poorest in society, a failure even to achieve the distorted objectives of the Westminster Government, but also an under-appreciation of the implications for local enterprises and entrepreneurs across Scotland. The cuts in social security benefits – announced even before this summer’s additional £12bn cuts per annum are considered – will remove £1.5bn from the pockets of Scotland’s poor and so directly reduce spending in local shops, services and businesses by that amount. Multiplier effects will exaggerate that loss to the country’s enterprises. The numbers on long term sick and disability benefits are showing no signs of falling, the downturn in numbers on unemployment benefits is lower and slower than any previous recovery from recession. Jobs being created are low paid, low productivity, low innovation and low profit. These austerity cuts will damage the economy but especially the poor (both working and inactive), small and medium enterprises, and put back recovery and regeneration. A different strategy is needed for Scotland.

Much of the attention this week has been quite correctly focused on how the poor are being so severely affected by the Government and Parliament in Westminster, and the other posts on this dedicated Challenge Poverty Week blog have discussed many aspects of the impacts of the cuts and changes in entitlements to support. There are wider economic costs which we should be aware of and these need embedded into any analysis of the system-wide implications of austerity because they demonstrate how the cuts hurt us all. Cutting the incomes of those on benefits directly reduces expenditure in their communities; when you are making everyday choices between eating, heating, clothing and the other necessities of life there is no question of being able to save.

Every pound ‘saved’ by the Treasury from the Social Security budget reduces the UK economy by the same amount initially, but then by more as this money is not circulating around the local economy. These effects are felt most acutely in the most deprived parts of the country – the old industrial areas, rural, seaside and traditional mining communities. Where these cuts represent redistribution from poor to rich through tax cuts and diverted spending through macroeconomic choices different areas benefit: specifically where higher rate tax payers live. But as the better off will save their extra incomes or disproportionately spend on imported goods, foreign holidays or certain retail and hospitality sectors, the overall combined impacts will be negative for the national economy. Money leaking out of poor neighbourhoods, through cuts, and out of the country through redistribution to the already well-off damages employment, incomes and power of small and medium enterprises as well as the country as a whole.

These redistributions by class, community and place are detrimental to families, but also to entrepreneurs who serve them close to home. So much for building an enterprising culture, while those individuals and groups who benefit from increasing inequality and personal wealth are featherbedded through divisive and inefficient policies. Promoting economic development of the Home Counties stokes further inflationary pressures, to the disadvantage of the whole and of the rest of the UK, exacerbating the harmful effects on the balance of trade. In brief, an economic strategy based on attacking the poor under a specious argument of balancing the budget will fail of itself, will fail local enterprises and will fail the economy in aggregate.

To address the increase in imports generated by these redistributions, the UK Government and Treasury are now embarked on a mission of attracting capital inflows, and so are running cap-in-hand to foreign governments and moneylenders to balance these other books. Encouraging  overseas, often state-owned, corporations to buy, operate and reap the rewards of supplying our utilities, railways, nuclear power stations, Trident missiles, health and education services – whilst denying our own public sector organisations the opportunity to compete for such contracts –  adds to the long term damage to the economy. The latest Nobel prizewinner (Angus Deaton) recognises the nonsense of this approach, as have former winners (most notably Paul Krugman, Joseph Stiglitz, and Amartya Sen) and economists from across this country and beyond. Poverty and inequality are bad for us all, for small businesses and for generations to come, and it is important that the spillovers from attacks on the poor are not seen just as having inhumane effects on our poorest neighbours.

Solidarity, coherence, innovation, strong trade unions and equality are the characteristics of the world’s leading economies – we find them across the North Sea where those societies lead the rankings on almost all indicators. Before the recession they devoted the highest proportions of their national incomes to social spending, paid the highest out-of-work benefits on any measure; since then they have protected the poor especially from the worst effects of the crises, and their recoveries have been quicker and stronger. Austerity is failing Britain, further cuts to the poorest are exacerbating levels of inequality not seen since the 1920s and not suffered currently elsewhere in Europe. Nordic societies have shown there is a better way, we should pursue it with vigour.

Mike Danson is Professor of Enterprise Policy, School of Management and Languages, Heriot-Watt University

Preventing poverty in the labour market

Adrian Sinfield, University of Edinburgh

Preventing poverty more effectively requires lower unemployment and decent jobs, fair wages and greater security.  This means a ‘career first’ rather than a ‘work first’ approach, with jobs worth having and benefits to the individual, their family and the wider society.

Reducing poverty nowadays is discussed as if it were all a matter of getting ‘them the poor’ to behave better. But preventing poverty requires closer attention to its political economy and so the ways in which the workings of society, polity and economy allow and encourage the creation of poverty.  Tackling prevention in addition to lifting people out of poverty leads to greater and closer scrutiny of the processes that fail to protect people.

A crucial part of this requires a fairer and better working labour market. The objectives were clearly set out by William Beveridge 71 years ago in Full Employment in a Free Society. Full employment ‘means having always more vacant jobs than unemployed, not slightly fewer jobs. It means that the jobs are at fair wages, of such a kind, and so located that the unemployed can reasonably be expected to take them; it means, by consequence, that the normal lag between losing one job and finding another will be very short’ (Beveridge, 1944, p 18).  The aim, he stressed, should always be a seller’s market, not a buyer’s market. ‘A person who cannot sell his labour is in effect told that he is of no use.’ This is ‘a personal catastrophe’ rather than ‘the annoyance or loss’ suffered by the employer who cannot fill a job.

I have quoted Beveridge at such length to bring home the contrast with today’s policy assumptions for the labour market. Throughout his career Beveridge recognised the ways in which the balance of the power in the labour market shifted with changes in unemployment. The higher the unemployment, the more the balance tilts in favour of the employer. This was brought out by classic studies in the past. ‘Hiring requirements tend to rise – the definition of an “acceptable” worker is tightened up’, as Lloyd Reynolds, a pioneer of labour market analysis, pointed out (Reynolds, 1951, p.73). In consequence, those with least bargaining power in the labour market, whether suffering particular disabilities, lacking skills and/or belonging to ethnic, religious and other minorities, become even more vulnerable to exclusion and deprivation.  The risk of low pay and poor working conditions is increased.

By contrast, with lower unemployment employers have to recruit more widely, invest more in training and recruitment, make more adjustments to promote flexible working that allows a ‘family-friendly’ and better ‘work-life’ balance for their employees.

Many basic social policies are more likely to be successful when unemployment is kept low. ‘Maintenance of a high general level of economic activity has priority over improved labor market organisation … because it is a structural prerequisite to the latter’ (Reynolds, 1951, p 75). This was also stressed by Beatrice Reubens when she carried out a detailed, comparative review of European programmes to help the ‘hard-to-employ’, personally visiting and analysing experience in country after country. Low unemployment was a prerequisite for successful rehabilitation and re-employment (Reubens, 1970).

I am aware of no research since that challenges the need to keep overall unemployment low to tackle poverty in the labour market and to better support those caught on its margins. Reducing unemployment is a central part of what needs to be done to reduce inequality and poverty (Atkinson, 2015, ch. 5).

But stigmatizing and mythmaking about ‘shirkers, not workers’ weaken public support for tackling the labour market, rather than the ‘out of work’. Policies of ‘what works’ in keeping voters on side include the opportunistic exploitation of long-term prejudices of ‘we the people’, the taxpayers and contributors, and them, the takers who ‘rest on their benefits’.  But the changing trends in long-term unemployment, David Webster demonstrates, are to be explained by the overall state of the labour market, not by the behaviour or characteristics of those suffering long periods out of work (eg, Webster, 2005).

Politicians and others who should know better – and very often do – continue to nourish the myths despite their careful refutation (Shildrick et al., 2012b). They do not mention that over the last half century basic benefit rates for people unemployed or sick have fallen by one-half compared to average earnings (by the DWP’s own analyses until they were cut as an economy, Sinfield, 2013).  Inadequate ‘welfare to work’ and tougher sanctions policies are feeding the growth of poor jobs that diminishes people’s lives, not helping to preventing them.

By contrast treating people with dignity in the labour market means ensuring that they are offered a job worth having – the ‘career first’ rather than ‘work first’ thinking set out by Ron McQuaid and Vanesa Fuertes (2014). Making bad jobs better is a major theme of the concluding chapter to the 2012 award-winning study by Tracy Shildrick, Rob MacDonald and others, Poverty and Insecurity. The study is ‘about the lives of individuals and families living in or near poverty – despite (or, as this book will show, because of) their enduring commitment to work and repeated engagement with jobs’ (Shildrick et al, 2012a, p. 1).  It reveals the problems of the labour market experienced by the many people caught in the no-pay low-pay cycle.

‘Poor work is the big story’ in a world of greater inequality, insecurity and Social Exclusion (Byrne, 1999, p 69; Lansley & Mack, 2015). Policies to support the Living Wage are valuable, but they have to be accompanied by decent child benefit. The Chancellor of the Exchequer’s ‘misappropriated’ usage of a ‘national living wage’ (Veit-Wilson, 2015; Scottish Government, 2015) provides a fine example of ‘words that succeed and policies that fail’, the subtitle Murray Edelman chose for his book on Political Language (1977) – especially when it is combined with reduced tax credits.

Instead we need a broad policy approach that encourages and supports making bad work better, creating decent, good quality jobs for all (Findlay et al., 2013). As Michael Marmot argues, this will bring benefits that reduce the health gap (Marmot, 2015, ch. 6). This should also include more attention to the practices of poor employers and to the ways that employers providing the poorer jobs are themselves often caught in contracting arrangements with supermarkets or other larger employers.

One enterprising initiative is the Scottish Fair Work Convention tasked with developing the ‘fair employment and workplace framework for Scotland … that articulates a practical blueprint for implementing fair work’. ‘People must feel valued, rewarded, engaged in their work and be allowed to feel they have a stake in the success of their workplace, their community and their country’  (Roseanna Cunningham, Cabinet Secretary for Fair Work, Skills and Training, ‘Scotland: A Fair Work Nation’, 17 April 2015). Now this ambition has to be translated into strong policies in an area that has in the past been much neglected. It could make a valuable contribution to reducing poverty and inequality in the labour market.

Adrian Sinfield is Emeritus Professor of Social Policy and University Fellow at University of Edinburgh.

References:

Atkinson, A. B. (2015) Inequality: What Can Be Done?, Boston: Harvard University Press.

Beveridge, W. H. (1944) Full Employment in a Free Society, London: Allen and Unwin.

Byrne, D. (1999) Social Exclusion, Buckingham: Open University Press.

Cunningham, R. (2015) ‘Scotland: A Fair Work Nation’, http://news.scotland.gov.uk/News/Scotland-a-fair-work-nation-1851.aspx

Edelman, M. (1977)  Political Language: Words that Succeed and Policies that Fail, New York: Academic Press.

Findlay, P., Kalleberg, A. L. & Warhurst, C. (2013) ‘The challenge of job quality’, Human Relations, vol 66:4, pp 441-451.­

Lansley, S. & Mack, J. (2015) Breadline Britain: The Rise of Mass Poverty, London: One World.

Marmot, M. (2015) The Health Gap: the challenge of an unequal world, London: Bloomsbury.

McQuaid. R. & Fuertes, V. (2014) ‘Sustainable integration of the long term unemployed: From Work First to Career First’ in Larsen C., Rand, S., Schmid, J. & JR. Keil (eds), Sustainable Economy and Sustainable Employment, Muenchen: Rainer Hampp Verlag, pp 359-373.

Reubens, B. (1970) The Hard-to-Employ: European Programs, New York: Columbia University Press.

Reynolds, L. (1951) The Structure of Labor Markets: Wages and Labor Mobility in Theory and Practice, Westport, Conn.: Greenwood.

Scottish Government (2015) UK wage plan ‘not a Living Wage’ http://news.scotland.gov.uk/News/UK-wage-plan-not-a-Living-Wage-1dd6.aspx

Shildrick, T., MacDonald, R. , Webster, C. & Garthwaite, K. (2012a), Poverty and Insecurity: Life in Low-Pay, No-Pay Britain. Bristol: Policy Press.

Shildrick, T., MacDonald, R., Furlong, A., Roden, J. & Crow, R. (2012b), Are ‘Cultures ofWorklessness’ Passed Down the Generations? York: Joseph Rowntree.

Sinfield, A. (2013) ‘What unemployment means three decades and two recessions later’, Social Policy Review 25, pp 205-223.

TUC Commission on Vulnerable Employment (2008) Hard Work Hidden Lives, London: TUC.

Veit-Wilson, J. (2015) Stealing a good name: the national living wage http://www.cost-ofliving.net/stealing-a-good-name/

Webster, D. (2005) ‘Long-Term Unemployment, the Invention of “Hysteresis” and the Misdiagnosis of Structural Unemployment in the UK’, Cambridge Journal of Economics, vol 29: 6, November, pp 975-95.

 

Poverty, inequality and ‘the common good’ …

James Henderson, University of Edinburgh

The Yunus Centre for Social Business and Health at Glasgow Caledonian University recently held the first John Pearce Memorial Lecture. John Pearce, who died in 2011, had committed across his working life to ‘collective and community enterprise’ in pursuit of ‘the common good’. He worked in the 1960s in community development abroad, in the 1970s as part of the ‘legendary’ (UK) National Community Development Projects (CDPs), and then, from the 1980s, in developing social business –now termed social enterprise – in Scotland.

Working also as a researcher and writer, John Pearce influenced many through two key publications: in 1993, At the Heart of the Community Economy; and in 2003, Social Enterprise in Anytown (1). I’m certainly one of those he influenced through these books and the powerful commitment to the common good he evokes. So, as part of Challenge Poverty Week, I’m keen to think further as to how such thinking has and continues to be concerned with ‘tackling’ poverty and inequality. Particularly, given the increasing policy focus on ‘community’ and third sector over these last five decades … co-incidentally in parallel to my own lifespan (thus far).

At its simplest, the Institute for Fiscal Studies’ (2) tracking of income inequality in UK through the Gini co-efficient marks the significant rise in such inequality during the 1980s from the historically low levels of the 1960s and 1970. This very broadly-speaking plateaus from the mid-1990s onwards, subject to on-going ups and downs, with current Conservative UK Government policy now predicted as a likely ‘up’ and increase in inequality. Academic discussions are on-going as to the detail of how poverty and inequality connect, see for instance last year’s Challenging Poverty blog. However, the broad tradition of thinking within community development, generated through the CDPs’ action research, has asserted a political economic analysis of poverty as generated by structural inequalities. John Pearce, for instance, argues against the ‘social pathologising’ of individual (working class) neighbourhoods, pointing instead to the economic and historical changes that have impacted on them.

Given this long-term policy focus, or rhetoric at least, on ‘community’ and the third sector, how should this be understood in relation to increasing inequality? Have the two unwittingly become part of the process of sustaining inequality? Would things have been still worse without them? Is the situation more complex than any such simple statements? As crucially, what should their future roles be in seeking social change?

As befitting the community development tradition, John Pearce provides a practical tool and model (3) for supporting practical and widespread discussion of the economic, social and political workings of society. He outlines three sectors or ‘systems’ of economic activity – each potentially working across neighbourhood, local, regional, national and global dimensions – that I’d summarise as follows:

  • Private – ‘the market’ and largely privately-owned organisations that trade within it – whilst recognising that publicly and socially-owned organisations will trade too;
  • Public – ‘the state’ including government, public sector and other official bodies – with emphasis on planning and service provision … also investment and distribution of income.
  • Third – of socially and community-owned organisations and networks: including social enterprises, cooperatives, voluntary organisations, trades unions and faith-based bodies etc.

A seemingly simple framework, perhaps, yet its mix of local-to-global, different forms of ownership and organising, and different and in themselves diverse ‘systems’ for coordinating economic and social activity, has the potential to support any group in generating increasingly complex discussions as to what a more equal society, concerned for social solidarity, would ‘look like’.

Pearce uses it to illustrate an intriguing cooperative, mutual vision of society and economy: one that emphasises the role of social ownership in ‘working for the common good’, and yet is not naïve as to the respective roles of the state and the market. Importantly, his model can also support wider political economic discussions of the contributions of state, market and ‘community’. It can explore insights, for instance, from thinking on a social democratic post-Keynesian welfare state; a ‘green’ egalitarian steady-state economy; and so on … and likewise how free market (neo-liberal) approaches have increased the scale of poverty and inequality since the 1970s.

His model also gives us the space to think further about the role of such a third system in working for equality and the redistribution of resources within society … rather than as simply and solely a means to deliver local services and build social capital. Pearce’s own insight here: the need for independent, socially-owned organisations and enterprises, controlled by working people – the common usage, rather than the current Chancellor’s – and their communities, with the capability and confidence to challenge current norms, explore alternative approaches, and work for ‘the common good’.

Dr James Henderson is a social researcher working at the University of Edinburgh – the views expressed above are his own.

 Notes:

(1) This blog draws from these two publications, and John Pearce’s chapter in The Social Economy: International Perspectives on Economic Solidarity (edited by Amin, 2009).

(2) View the Institute for Fiscal Studies’ report Living Standards, Poverty and Inequality in the UK: 2015 (Bellfield et al.; p.32) at: http://www.ifs.org.uk/uploads/publications/comms/R107.pdf.

(3) Pearce’s three systems model of the economy appears first in Social Enterprise in Anytown (2003). It is reproduced in similar vein in Mike Bull’s (2008: p.5) Balance: Unlocking Performance in Social Enterprise, view at: http://www.socialenterprisebalance.org/docs/Unlocking_performance.pdf.

Responding to refugee poverty: lessons from local and international research

Gina Netto, Heriot Watt University

Europe is now facing a scale of migration that many view as unprecedented. While it is difficult to estimate the exact numbers of people who are migrating to Europe, it is clear that there is an urgent need to consider responses to refugees, many of whom would have lost their homes, loved ones and possessions. This presents a challenge to individual member states of the European Union, many of which, including the UK, are already facing a severe housing shortage. Yet, even while governments engage in extensive negotiations over the numbers of people to accept, there is evidence of a willingness from some governments and many community organisations to welcome refugees and to consider how they can be assisted in building new lives.

Among the most urgent considerations is housing of refugees. Here, extensive research informs us that housing needs to be considered along with access to other key services including education, services which promote employability, health and social care services. These are needed in order to assist refugees in not only finding routes out of poverty but to thrive.

Housing allocation policies need to be sensitive to the demographics of existing communities. Areas with high levels of poverty, deprivation and unemployment – where the arrival of refugees might be viewed as presenting additional competition for available resources – should be avoided, if at all possible.

But alongside this, If it is difficult to find available housing in other areas, then extensive work needs to be undertaken with existing communities, including investing in new accommodation for the local population and community development in order to avoid racial hostility and tension. Local communities should be prepared for the arrival of refugees. Awareness of the reasons for forced migration should be raised. Local residents should also be assured that they would not be disadvantaged through increased pressure on services. The allocation of housing to refugees in these areas should be gradual, allowing existing residents to become accustomed to new arrivals over time.

It is also timely to consider what can be learnt from diverse social, political and economic contexts in terms of tackling extreme housing exclusion. A forthcoming report involving case studies in eleven countries that will be published by the Joseph Rowntree Foundation will highlight several international lessons (Netto et al, forthcoming). Many of these solutions challenge widely held conceptions of what constitutes a ‘home’ and the processes of ‘home-making.’

Some of these solutions have been made possible by advancements in technology and design. They present alternatives to not dealing with the economic dimensions of housing exclusion, but also in addressing its social aspects.

Perhaps one of the most significant lessons to emerge from this study is the potential for mobilising change and changing the discourse around housing exclusion. In the light of the refugee crisis, this requires viewing the large scale displacement of individuals who are displaced by war and political conflict not as a burden which must be spread, but as an opportunity to consider how we can provide more affordable housing for all.

This week I was invited to a two day workshop on Housing refugees organised by the International Federation of Housing and Planning in Deventer, Netherlands (link provided). Here, academics and practitioners engaged in lively, intense and open debate over what could be done to respond to the needs of refugees. While the housing shortage in many member states of the EU was readily acknowledged as a serious challenge, it was not seen as a barrier. Rather, the current situation was seen as an opportunity for stimulating discussion on the widening of housing options beyond what is conventionally practised in member states, without compromising acceptable standards of accommodation or environmental goals.  Encouragingly, a sense of common purpose united individuals from different political persuasions, cultures and professional orientations and refugees were viewed as part of the solution.

This brought home to me that in considering how we respond to the arrival of refugees, we must not only ensure that the mistakes of the past are not repeated and consider what can be learnt from other contexts. We need to reflect on whom we consider to be inside or outside our ‘imagined community,’ what kind of community we wish to be and the lengths that we are willing to go to achieve this.

Reference

Netto, G, Fitzpatrick, S, Sosenko, F and Smith, H (forthcoming) International lessons on tackling extreme housing exclusion. Joseph Rowntree Foundation: York

Link to IFHP workshop

Dr. Gina Netto, Associate Professor/Reader, Institute of Social Policy, Housing, Environment and Real Estate (I-SPHERE), Heriot Watt University

 

Assessing the cost of the cuts on poorer people and places

Annette Hastings, University of Glasgow

As the Chancellor George Osborne asks government departments to draw up plans for cuts of 40% in the Comprehensive Spending Review due next month, and the Local Government Association warns of a knock out blow to local services and even bankrupt councils, it is worth bringing into focus the impact on service users experiencing poverty – as well as what councils can do to protect such groups and communities.

Between 2011 and 2014, researchers at the Universities of Glasgow and Heriot Watt worked with four local authority case studies across England and Scotland to analyse how local authorities have dealt with growing budget gaps of between 7% and 11% per year. Reports for the Joseph Rowntree Foundation documented the effects of local authority cuts on poorer communities.

The research pointed out how little room for manoeuvre local government has when it tries to protect poorer groups from the worst effects of budget pressures – councils spend almost two thirds of their resources on the services which poorer groups rely on. This means that to date, only a tiny per cent of the total savings which councils have made to manage austerity have come from services which tend to be used more by better off groups – services such as museums, arts and planning.  But more than half of all savings have come from services which are used mostly by the poor – money advice, housing, social care and social work.

It was clear that people were now beginning to notice more significant changes to services – particularly worsening environmental services as well as reduced provision for children and young people. As one service user living in a disadvantaged neighbourhood said about her local park:

‘It used to be good. You could take the kids for picnics. Then they stopped cutting the grass and taking care of it so people couldn’t use it anymore.’

Council and voluntary sector staff reported rises in overall levels of need and that the needs of the most vulnerable and disadvantaged are becoming more intense. Benefit reductions and withdrawals through welfare reform were significantly amplifing problems:

These people are coming to us at the end of their tethers … I don’t think we’ve ever had people quite as bad as we have at the moment” (Advice service provider)

Staff reductions had increased workloads for remaining staff, limited the time frontline staff could spend on public-facing work, and reduced the number of staff in operational roles (such as social work or street cleaning. Many members of staff reported feeling stressed due to overwork, job insecurity and reduced morale. The evidence suggested that some council staff were effectively ‘shock absorbers’, cushioning service-users from the worst impacts of the cuts. Importantly staff were concerned that services were suffering in various ways. They reported reduced standards with clients waiting longer, less time to help clients access services, less collaboration between colleagues, and less time for strategic thinking to improve services long term.

So given these challenges and constraints what, if anything, can local councils do to mitigate some of the impacts of austerity on those who use and need their services to the greatest degree?  To help with this, the research team has produced a tool to help councils assess the impact of cuts on services and on poorer groups of service users.  Called The cost of the cuts: A social impact tool for local authorities, it can help councils to produce a robust assessment of the implications of savings plans for service user groups experiencing varying levels of socio-economic deprivation. It can also help them to analyse the extent to which distinctive population and service user groups experience different levels of cumulative service change, and consider whether savings strategies should be changed as a result.

In producing the Social Impact Tool, there is no suggestion that the level of cuts facing local government should be regarded as necessary or inevitable. However, the Tool might help some councils find ways to minimising some of the harms that these cuts are bound to cause to services relied on to challenge the effects of poverty and inequality.

Please feel free to contact Professor Annette Hastings or Maria Gannon, Research Associate at the University of Glasgow if you would like to know more about the Social Impact Tool.

 

Lone parents on a low income – how much is ‘enough’?

Helen Graham, Edinburgh Napier University

Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the types of diet, participate in the activities and have the living conditions and amenities which are customary, or are at least widely encouraged or approved, in the societies to which they belong. Their resources are so seriously below those commanded by the average individual or family that they are, in effect, excluded from ordinary living patterns, customs and activities.” – Peter Townsend [1]

Research into determining a minimum income standard (MIS) in recent years has suggested that people in the UK broadly agree with Townsend’s understanding of a poverty line that exceeds the most basic needs, and encompasses a range of items and activities that facilitate participation in ordinary life. [2] This includes a certain degree of expenditure, for example, on transport, clothing and social activities. It is, however, a level of expenditure that is beyond reach of those on out of work benefits. For a hypothetical lone parent with one child in 2015, the MIS is £291.14 per week (excluding rent and childcare). Their benefit income (from a typical combination of Income Support or Jobseeker’s Allowance, Child Benefit and Child Tax Credits), at £157.43, covers just 57% of this.

But how do lone parents on out of work benefits themselves feel about the level of income they receive? To what extent do they feel that it falls short of allowing them to meet their needs – and indeed, what do they understand as constituting ‘enough’? Recent research by the Employment Research Institute [3] [4] has explored lone parents’ lived experiences of being in receipt of out of work benefits, and suggests that they simultaneously view the amount they receive as both enough and insufficient.

The general feeling among the lone parents participating in the research is that the amount received is just sufficient to live on and no more. It allows them to keep a roof above their heads, and to pay bills and buy food and other essential items. However, there is little or nothing left over; they are unable to take their children on trips, and buy them the things that they want, and that their contemporaries have. Further still down the list of priorities are lone parents’ own social lives, and in some cases even basic items, with some restricting their own diet in order to save money.

It just gets you there and no more. There’s nothing to play about with, you can’t treat yourself.”

You just scrape by on your benefits really. By the time you pay your bills and get the shopping… I manage. I’ve got to manage!

It is a struggle, it’s not easy, but I get by. But there’s never any spare money to do anything, if you wanted to take the kids out anywhere.”

I get by. I do struggle, you cannae deny that you struggle, but in all fairness it’s enough to cover me, my weans, it’s enough to make sure we’ve got all of our bills, it’s enough for the way we live.”

You can’t really ask for any more, can you? You get what you get, you don’t work, so you can’t.”

Lone parents on how they manage on their income [3]

The MIS threshold allows for expenditure on what many of the participants would describe as extras or treats; it includes the resources to run a car if required, and the ability to spend around £45.76 per week on ‘social and cultural participation’. This would encompass things like taking children on trips, as well as the opportunity to socialise themselves. But in reality these activities constitute a substantial proportion of their income, which is in any case already accounted for by essential items.

Quite often I get money on Tuesday and by Wednesday I have got pennies in my purse. I don’t have £2 to give to my daughter to go to her Guides thing.”

If the Scottish Government want children to be healthier, we need to get them out… but for [self and two children] to go on an away day it would cost £7.50, that’s like 10 per cent of my benefits for that week.”

I have one social night out and that’s it, it foils me for the whole month. My budget is that tight, so if I have a night out, I struggle. There’s no room to live, really. When I take into account the needs of my family, of my daughter, to encourage her to grow and educate her… for me [daughter’s extracurricular activities] are all educational activities that are going to benefit her in the long run… I want to make sure these things are maintained for her.”

Lone parents on the cost of activities [4]

Most of the lone parents participating in the research explicitly defined the amount they receive as enough – as one participant put it,  for the way we live. And yet there was also a sense that it is not; that when even modest expenditure on items that would be beneficial to their children is out of the question, then the way they live is not enough. That their children deserve more, to live a life that is not so far out of step with that of their peers.

The inability to participate in everyday social, cultural and educational activities can only be damaging to the social relationships of lone parents, and to the social and educational development of their children. Those who find themselves trapped on out of work benefits by the difficulties of reconciling their roles as sole earner and carer, and awarded little by a system which places a low value on caring, are reaching for an ordinary life and falling short. If they are to lead ordinary lives, they will need a helping hand.

[1] Townsend, P. (1979). Poverty in the UK. Harmondsworth: Penguin.

[2] The research established a minimum income standard through a process of discussion and debate between experts and focus groups representing a cross-section of the population. A minimum income calculator is at: http://www.minimumincome.org.uk/. The methodology is outlined in Bradshaw et al. (2008). A minimum income standard for Britain: what people think. York: Joseph Rowntree Foundation; 2008. http://www.jrf.org.uk/publications/minimum-income-standard-britain-what-people-think

[3] The Employment Research institute was commissioned by the Glasgow Centre for Population Health to conduct research into the impact of welfare reforms on lone parents in Glasgow.

Graham, H., & McQuaid, R. (2014). Exploring the impacts of the UK government’s welfare reforms on lone parents moving into work. Glasgow Centre for Population Health. http://www.gcph.co.uk/publications/497_impacts_of_welfare_reforms_on_lone_parents_moving_into_work_report

[4] The Employment Research Institute has also been commissioned by the Scottish Government to conduct a longitudinal qualitative study on the impacts of welfare reform in Scotland.

Graham, H., Lister, B., Egdell, V., McQuaid, R., & Raeside, R. (2014). The impact of welfare reform in Scotland – Tracking Study: Year 1 report. Scottish Government Social Research. http://www.gov.scot/Resource/0046/00463006.pdf

Graham, H., Egdell, V., McQuaid, R., & Raeside, R. (2015). The Impact of Welfare Reform in Scotland – Tracking Study – Sweep 3 report. Scottish Government Social Research. http://www.gov.scot/Resource/0047/00477917.pdf

Dr Helen Graham, Research Fellow, Edinburgh Napier University

The Challenge of Challenging Poverty Myths

Stephen Sinclair, Glasgow Caledonian University

Most people in Britain are ignorant about poverty and welfare. This might sound rather superior or even sneering coming from an academic paid to study social policies. However the point is not to boast but clarify what is involved in challenging poverty and in particular prevailing false beliefs about it.

Evidence of the scale of misconceptions about poverty and those who experience it in Britain is well established and abundant. For example, about one third of people in Britain believe that more is spent on Jobseeker’s Allowance than on old age pensions. In fact £4.9 billion is spent each year on JSA compared with £74.2 billion on pensions. This is not merely a slight overestimate, it is the opposite of the case by a factor of 15. Similarly, the public grossly over-estimates the scale of social security fraud and abuse: 75% of respondents to the 2013Scottish Social Attitudes survey believed that ‘large numbers of people falsely claim benefits’ and estimate that about one third of all benefit spending is lost on fraudulent claims. However the UK government estimates that about only 0.7% of the total benefit bill is fraudulently claimed, compared to 2% lost due to administrative error.

It is important to try to correct such mistakes and not allow misleading claims or outright falsehoods to pass unchallenged. There are several excellent fact-checking sites and cases where Social Policy academics or campaigning organisations have rebutted misrepresentations of poverty and policy. Important examples of this include the work of the Poverty and Social Exclusion Survey team correcting some of the misleading claims which underpin the UK Government’s Troubled Families programme or Fran Bennet’s critique of Iain Duncan Smith’s commitment to redefine ‘child poverty’ as defective behaviour rather than a matter of resources and opportunities. A particularly notable example of challenging damaging and misleading images of poverty is the Poverty Alliance’s Stick Your Labels campaign, which has secured widespread political support in Scotland to avoid stigmatising language and portrayals of people experiencing poverty. Such responses will always be valuable and must continue, and providing evidence to challenge misrepresentations and ill-considered views is an important academics duty.

However ‘fact’ checking and corrections are not enough to challenge some of the views and accounts of poverty which have a hold on the British imagination. Some of the opinions on this issue are so wide of the mark and so firmly held that evidence alone cannot shift them. Some Social Policy academics have noted persistent indestructible zombie theories and concepts – ideas that somehow still remain alive, stumbling through the public mind and policy debates no matter how much evidence is produced to kill them off. A common example is the idea that poverty is attributable to a disaffected underclass or to young people who lack aspirations (as opposed to understanding just how firmly the odds are stacked against them). The resilience of some false beliefs means that they should be regarded as myths, i.e. ‘a conviction false yet tenacious’. Myths are not corrected by evidence nor shaken by argument. In fact contrary evidence is rejected as biased, and challenging arguments are dismissed, for example as the rhetoric of ivory tower academics detached from the ‘real’ world. In dismissing some public attitudes as myths there is a danger again of appearing disdainful, but in the face of intransigent resistance to evidence this risk must be faced. We might support a plurality of values in society and protect the equal right of all to express their views in welfare debates, but there is no democracy over facts. The challenge is that facts about poverty and welfare do not ‘speak for themselves’, they are filtered through frames of interpretation. These filter what people are able or willing to see. Such frames are not themselves questioned; in fact it takes a considerable effort even to realise that everyone sees the world through the frames we each have acquired. As George Orwell observed ‘To see what is in front of one’s nose needs a constant struggle’; most people are not willing to make the effort.

Therefore, in one sense it is pointless to try to ‘correct’ or rebut myths; they should be regarded as something to be studied and explained[1]. This does not seem to provide much comfort for those trying to challenge mistaken views and false beliefs about poverty. However one implication is that is if we decide to wait for British public opinion to swing behind a commitment to seriously reduce poverty we could be waiting a long time. Instead of waiting for public support to catch up with the facts of poverty, political leadership is required to do what is right even if it might not currently be popular. The previous Labour government deserves some credit for showing such leadership: if they had waited for public concern to become animated then they would not have introduced the measures which contributed to reducing poverty among older people, which had been one of the greatest sources of the risk of poverty for about 50 years after WWII. Similarly, the pledge made in 1999 – and now effectively abandoned by the current UK government – to eradicate child poverty within a generation was not made in response to popular demand, although it proved popular when it was drawn to the public’s attention. It may be politic to wait for opinions to shift, but when the evidence is compelling and public opinions are based on ignorance and intransigent prejudice it is not ethical and certainly not courageous. If we always took that safe course then not only would there be no equal right to marriage in Britain but homosexuality would still be criminalised. Understandably, politicians would prefer to do not only what is right but also what is popular. Unfortunately, when it comes to challenging poverty in Britain this is a luxury that may be paid for by the avoidable suffering of those who most need protection from the misinformed and mystified.

[1] As I try to do in my forthcoming book: An Introduction to Social Policy Analysis: Illuminating Welfare (Policy Press).

Dr Stephen Sinclair is Reader in Social Policy at Glasgow Caledonian University

Women’s poverty and ‘austerity’ in the UK

Kirstein Rummery, University of Stirling

Policies in the post 2010 Coalition government were dominated by the spectre of the 2008 private sector financial crisis, which by 2010 had turned into a global recession reducing economic production and seeing rises in unemployment. The UK in common with other G20 countries initially adopted a fiscal stimulus approach (quantitative easing) which slowed the recession but led to a sharp rise in the budget deficit to 11.6 % in 2009-10 the highest since 1945. The Coalition government which came into power in 2010 took the position that addressing the deficit was an economic necessity, and social policy therefore followed this aim. The primary mechanism to achieve this was cuts to public expenditure – a policy paradigm which has come to be known as ‘austerity’. Those dependent on the state for a proportion or the whole of their income were more affected by the changes than the average: government figures show that whilst an estimated 21% of people in the UK are living in poverty, they are bearing the brunt of 39% of the funding cuts. Adopting a policy of fiscal austerity rather than investment in response to the crisis meant that cuts to public services were inevitable. Health was the most protected area, seeing only a 1% cut of the initial budget in 2009-10. Housing was cut by 27% of the budget, and the other hardest hit departments included further and higher education (31%), social care (20%), early years education and care (18%). 20% of the cut in budget came from other areas including social security. Cutting spending meant that whilst 21% of the population are estimated to be living in poverty, they bore the cost of 39% of the cuts. These cuts impact differently on women, and particular groups of women, than they do on men. 20% of women’s income comes from social security and tax benefits, as compared to 10% of men’s, and of the £26billion of changes to benefits and tax credits since 2010, £22billion were born by women and £4billion by men.

Women’s role as parents and carers means that they are at risk of poverty, and will feel the impact of the withdrawal or reduction of state benefits more acutely than men. For example, 92% of lone parents are women, and 95% of lone parents dependant on income support are women; 74% of people claiming Carers Allowance are women and they make up around 60% of unpaid carers. Moreover, the development of Universal Credit, designed to make work pay and encourage more people into the workforce, did not take childcare issues into account. As a result of changes to child benefit, the childcare element of working tax credit and income support, low income women with very young children were forced into looking for work, women with high income partners lost what was often their only independent source of income, all women lost some income that was the only source targeted directly at children, and access to childcare was reduced for low-income families, particularly lone parents.

Although unpaid carers save the UK around a third of its care budget, Carers Allowance is currently around only 25% of the minimum wage, which makes it the lowest rate for any income replacement benefit. Carers UK estimates that around £1bn will be cut from carers’ incomes between 2011 and 2018. Women make up the majority of carers, particularly those of working age and are the majority of those providing more than 35 hours of care per week, and are also more likely than male carers to be working part-time (and it should be noted that women are less likely than men to self-identify as carers so these figures are likely to be underestimates). Women are also more likely than men to be working as formal carers, either in the statutory or market sector (which relies heavily on services commissioned using state funding either through local authorities or through disabled and older people using care-related benefits such as disability living allowance and self-directed support payments to purchase care and support). This means that as workers they will bear the brunt of cuts to social care funding.Overall, workers in the public sector numbered around 5.7 million in mid–2013, and made up just under 20% of total employment. Nearly 2/3rds of this workforce are women, and tend to work in the NHS, education and social care. Changes to the delivery of public services have also had an impact on women. There have been big increases in private sector employees delivering services historically dominated by the public sector – for example, in the mid 1990s, private sector nursery nurses and assistants accounted for around 40% of the nursery workforce, but increased to more than 70% by 2010. In social care the statutory workface numbers have remained stable, whilst numbers in the private sector have more than doubled since 1995 and by 2010 ¾ of the social care workforce were in the private sector. The growing use of casualization in the workforce, and the move towards direct payments, means that women’s jobs are not only subject to cuts as part of public sector spending cuts, but they also experience substantially less job protection and higher rates of income deflation and job insecurity as their jobs are moved into the private sector.

The Women’s Budget Group has calculated that the cumulative effect of losses to total income can be estimated thus:

Group % loss Disaggregated by sex
Single parents 15.1 Single mothers lose 15.6%; single fathers lose 11.7%
Single pensioners 11.6 Single women pensioners lose 12.5%; single male pensioners lose 9.5%
Couples with children  9.7 Data not available
Single childless adults  9.7 Single women lose 10.9%; single men lose 9.0%
Couple pensioners  8.6 Data not available
Childless couples  4.1 Data not available

This represents a substantial increase in poverty and loss of control over resources for women, particularly low income women. In addition, low income families are experiencing greater food poverty: the use of food banks more than doubled between 2012 and 2014, due to benefits sanctions and low—pay as well as direct cuts to state derived income. Certain groups of women have also suffered multiple discrimination: as well as being overrepresented amongst carers, women are also overrepresented amongst disabled people likely to be in full time employment and to be earning less than disabled men: the disability pay gap for disabled men compared to non-disabled men is 11% but for disabled women it is 22%. Refugee women also experience much greater delays in accessing benefits such as Job Seekers Allowance and Child Benefit and Child Tax Credits which can cause significant hardship for women (and children) without access to kinship-based networks of support. In addition the impact on older women, although yet to be fully assessed, includes the impact of the raising of pension ages (pushing older women into work activity for which they often lack the skills or training) and the ‘triple lock’ on uprating of the state pension (on which women are more likely to be reliant than men).

Challenges by the Fawcett Society and the Equalities and Human Rights Commission to force the government to carry out an Equalities Impact Assessment of austerity were suppressed or ignored. It is probably going too far to say that fiscal austerity was a policy aimed at impoverishing women, but it is certainly the case that intentionally or not it has contributed to the substantial growth of women’s poverty and gender inequality in the UK.

Kirstein Rummery, Professor of Social Policy, University of Stirling and Centre on Constitutional Change 

Tweets: @KirsteinRummery

‘Poverty Punishment’ Overkill: The deliberate creation of destitution through benefit sanctions

David Webster, University of Glasgow

Hayley Bennett has already written about the short-sightedness of ‘poverty punishment’ tools in Active Labour Market Policies designed to push people into work. The harshest of these is the withdrawal of benefits through ‘sanctions’. In the year to March 2015, 587,000 benefit sanctions were imposed in Great Britain on Jobseeker’s Allowance (JSA) claimants, 43,300 on Employment and Support Allowance (ESA) claimants, and 43,800 on lone parent claimants of Income Support. What is particularly striking about today’s British sanctions regime is the way it deliberately drives many claimants into complete destitution, thus damaging their health, in extreme cases causing death, and certainly contributing mightily to the growth of food banks though, rather obviously, not helping them to find a job since their energies are taken up by the struggle to survive.

It did not use to be this way. Up to the late 1980s, disentitled or sanctioned claimants could claim Supplementary Benefit as of right, if they passed the normal test of resources, at the usual rate minus 40%. But in 1988, for sanctioned unemployed claimants with no contributory entitlement, Michael Portillo withdrew the new Income Support and substituted a regime of discretionary ‘hardship payments’, which have to be separately applied for. This was extended to contribution-based Jobseeker’s Allowance claimants in 1996 by Portillo and Peter Lilley, and then to Employment and Support Allowance claimants in the ‘work related activity group’ by Iain Duncan Smith in 2012. In 1996, the rule was introduced that ‘non-vulnerable’ claimants (arbitrarily defined) could not even apply for hardship payments for the first two weeks of a sanction or disallowance. The official DWP Decision Makers’ Guide acknowledges that the two week wait will often damage the claimant’s health (para. 35099). The criteria for ‘hardship’ are specific to the sanctions regime and are particularly harsh – for instance, a person with cash in hand equal to their ‘applicable amount’ will be refused even if the money is owed to a payday lender (DMG para. 35198). And as with any discretionary benefit, the complicated application process, lack of information given to claimants, and scope for bullying by junior officials mean that many claimants never even apply for the ‘hardship payments’ they ought to receive. The opaqueness of the system has been increased by the absence since 2005 of published statistics on hardship payments, other than a Freedom of Information response in 2013, and a Parliamentary Answer of 21 January 2015. Nevertheless we know that in 2011/12, when there were 705,000 JSA sanctions, there were only 64,000 hardship payment awards, indicating that, allowing for repeated sanctions on some individuals, little over one in ten of sanctioned claimants got a hardship payment. A Parliamentary Answer on 6 March 2015 promised that more information would be published in May 2015, but to date nothing has appeared.

Universal Credit introduces further changes to ‘hardship payments’. In particular, it makes them repayable, which given the rule that repayments are made at the rate of 40% of benefits paid, means in effect that the duration of sanctions becomes three and a half times the stated length. And under UC, all claimants have to demonstrate seven days’ compliance with benefit conditions before they can apply for hardship payments.

The public have been brainwashed into intolerant attitudes to unemployed people. For instance, YouGov found in March 2011, at the height of the recent severe recession, that only 20% of the population thought the main reason why some people are unemployed for long periods was lack of jobs! Despite this, support for cutting off all the benefits of claimants not complying with conditions, regardless of what hardship it causes, was fairly limited, at 21% in the UK and 14% in Scotland. More people (26%) thought they should lose none or a small amount, with the largest group (49%) thinking they should lose a large amount, but keep enough to cover their basic needs.

In spite of this relative lack of public support for making people destitute, the Portillo/Lilley regime has remained in place for almost two decades without serious challenge. The only government review, by Professor Paul Gregg in 2008, commented that sanctions should not cause ‘excessive hardship’ (undefined) but did not actually consider any evidence on the question whether they do.

This year, at last, has seen some heavyweight criticism. The House of Commons Work and Pensions Committee report on Benefit Sanctions Policy beyond the Oakley Review in March 2015 recommended that the two-week wait should be abolished and that where a claimant is vulnerable or has children, the DWP itself should initiate the hardship payment process. It was also highly critical of the lack of published information about hardship payments and called for at least annual data on numbers of hardship payment applications, numbers of awards, and numbers of those awards made from day one of a sanction.

These are modest reforms but they would relieve a disproportionate amount of misery and damage for claimants, and stress on the public and voluntary services who have to cope with the consequences of the destitution so casually created by the sanctions regime. The government’s response to the Work and Pensions Committee report, long delayed, has been promised for this month (October 2015). Let us hope that when it comes it will face up to at least this intolerable aspect of the ‘poverty punishment’ machine.

Dr David Webster is an Honorary Senior Research Fellow in Urban Studies, University of Glasgow. His papers on benefit sanctions are available at www.cpag.org.uk/david-webster and http://www.gla.ac.uk/schools/socialpolitical/research/urbanstudies/projects/ukbenefitdisallowances/

Inequality and student finance

Lindsay Paterson, University of Edinburgh

One of the great political myths of our time is that the current system of student finance in Scotland is progressive and that the system in England is iniquitous. Free undergraduate higher education has become such a premise of debate in Scotland that almost no politician who wants to claim egalitarian credentials dare challenge it. That same view now seems to be percolating to the left in England, since Jeremy Corbyn became leader of the Labour party. His policy, too, is to abolish fees, rejecting what he claims is the errors of New Labour which introduced fees in the late-1990s.

All these people claim that free tuition favours the poor. Yet the evidence is consistently and strongly that it does not, or at least not in present circumstances. The background here is how to finance a massively expanded system of higher education, with participation rates having risen from under 20 in every 100 young people in the 1980s to about 50 in every 100 today. In theory, this could have been paid for by taxes. But no government in the democratic world has successfully pursued a programme of raising taxes in recent decades. That approach to funding the welfare state is too unpopular, even in the extreme circumstances which some countries (notably Greece) have faced since 2008.

So the question has become how to find other sources of finance. The rationale for charging fees for university is that the beneficiary – the graduate – should pay part of the cost. Of course, both society and the individual benefit, but no serious politician in the UK (or anywhere in Europe) has proposed that the whole cost should be borne by the individual. The sharing has also now come to be only when the graduate is indeed benefiting financially – after graduation. Young, full-time students do not pay anything upfront, anywhere in the UK. But in England, there is retrospective payment, in proportion to earnings. In Scotland, nothing is paid, ever.

Three main questions then arise about the policy of charging fees:

  1. Has it discouraged overall participation in higher education?
  2. Has it widened inequality of participation?
  3. Has it disproportionately disadvantaged poor students?

On the first question, the answer is unequivocally that it has not. We can look at this in two ways – over time, and across countries. Over time, the graph of participation just keeps on rising, with some very short-term blips.[1] In England, these blips were in the years of the two large fee increases – 2006 and 2012. In each case, the proportion of 18-year-olds who applied to university dropped temporarily by about 1 or 2 percentage points. But the rate recovered again the year after, and continued inexorably upwards thereafter.

Across countries, the main comparison of England is with Scotland, where the rate of increase – even with no upfront fees since 2000 – has been very similar. Indeed, even when fees were abolished completely for Scottish students in 2007, there was no discernible effect on the trajectory, and certainly no difference at all from what happened in England. Comparing countries more widely, there is simply no relationship between the rate of participation and whether fees are charged. For example, the participation rates in New Zealand (which charges fees financed through loans that are repayable after graduation, as in England) and Sweden (where higher education is free) are very similar.[2]

On the second question the answer is also unequivocally that there has been no harm. Poor students and rich students have been swept along in the wave of generally rising participation. There is inequality, but whether fees are charged has not made it worse.[3] England provides a key test. The ratio of university application rates from rich areas and poor areas has steadily declined over the past decade, through two large fee increases. It was about 4.4 to 1 in 2004, declining to 2.6 to 1 in 2014. In Scotland, the decline has been similar, but when fees were abolished the inequality actually grew temporarily, as well-off students took advantage of the state’s generosity. This resembled what happened in Scotland further back, in the early 1990s, during the first phase of expansion of higher education. Though it was all free then, the main initial beneficiaries were the children of the middle class.

The important topic in connection with the third question is not the matter of fees but rather how students finance their living costs. Public finance for students is much more generous in England than in Scotland. There are better non-repayable bursaries for poor students, and also better loans. The effect is that the scheme of student finance which was put in place in England after 2012 is the most egalitarian of any scheme anywhere in the UK since fees started to be charged a decade and a half ago.[4] In contrast, the Scottish package disproportionately benefits students from middle-class backgrounds, who end up with less debt than any other group. The main reason for this – which at first sight might seem counter-intuitive – is because loans (including fee loans) are not repayable until after graduates start earning above a certain level, and because low-earning graduates have a large part of the debt eventually written off.[5]

It is not inevitable that free higher education would be fiscally regressive in these ways. Nor is it inevitable that charging fees should go along with progressively redistributive bursaries and loans. Free services tip over into being progressive when all or a large majority of a population uses them – such as primary or secondary school. Free services are also progressive when they are disproportionately used by poor people – such as the National Health Service. English financial support was made more progressive as a deliberate political bargain when fees rose.

But the point remains. For the time being, Scottish policy on student finance is socially regressive. So: will any political party take the risk of saying that publicly when campaigning for the Scottish parliamentary elections next May?

[1] Table 1 in Higher Education Statistics Agency (2014), UK Application Rates by Country, Region, Sex, Age and Background. https://www.ucas.com/sites/default/files/jan-14-application-rates.pdf

[2] Section B5 in OECD (2014), Education at a Glance. http://www.oecd.org/edu/Education-at-a-Glance-2014.pdf

[3] Tables 11-12 in Higher Education Statistics Agency (2014), UK Application Rates by Country, Region, Sex, Age and Background. https://www.ucas.com/sites/default/files/jan-14-application-rates.pdf

[4] Hunter Blackburn, L. (2014), The Fairest of Them All? The Support for Scottish Students in Full-Time Higher Education in 2014-15, Centre for Research in Education Inclusion and Diversity, University of Edinburgh. http://www.centreonconstitutionalchange.ac.uk/sites/default/files/papers/workingpaper3_fairestofthemall_creid.pdf

[5] Johnston, A. and Barr, N. (2013). ‘Student loan reform, interest subsidies and costly technicalities: lessons from the UK experience’. Journal of Higher Education Policy and Management, 35, 167-178. http://www.tandfonline.com/doi/full/10.1080/1360080X.2013.775925

 

Professor Lindsay Paterson is Professor of Education Policy, Social Policy, University of Edinburgh

 

Poverty in the archives: a tale of persistence

Jackie Gulland, University of Edinburgh

Today we hear a lot about people claiming benefits, people being refused benefits, people appealing against these refusals.  Many of them win their appeals but not all. What happens when people try to get benefits and lose their appeals?

In my research on the history of incapacity benefits, I’ve found many people failing to get the benefits they felt they were entitled to.  This blog post tells the story of one of those claimants.  Earlier this year I was in Belfast for the Social Policy Association annual conference.  The talk at the conference was all about austerity, poverty, stigma, the decline of the welfare state, the Budget.  There were excellent presentations from researchers at all stages of their academic careers.  There were discussions of ‘impact’, questions about whether or not social policy research makes a difference, how we can do it better.  But my trip to Belfast also had another purpose: to have a look at some benefits papers in the Public Record Office of Northern Ireland, conveniently located next door to the conference, in another magnificent purpose-built building.    My hunt was for benefit claimants.  Throughout my research on the history of incapacity benefits, I have often wondered what happened to the people who were refused benefits. Some of them appealed and some of them won their appeals but many didn’t.  In a collection of files in the Public Record Office of Northern Ireland I have found out about some of them.  The Public Record Office holds files of correspondence to the Northern Ireland Prime Minister’s office in the 1920s and 30s, and there are about a dozen files concerning people’s problems with sickness benefits.

Here I found a man who claimed sickness benefit in July 1928 and was told he was fit for light work.  He appealed against that decision and the appeal confirmed the original decision.  He wrote to the Prime Minister asking for advice so that he could ‘procure justice’.  The Prime Minister’s Office confirmed that, since he had unsuccessfully used the appeal procedure, there was nothing more that could be done. So then he claimed unemployment benefit.  His unemployment benefit was refused.  He appealed against that decision and the decision was upheld. So he wrote again in March 1929 to the Prime Minister asking for advice.  He was told that all the appeal procedures had been followed correctly.  What to do next?  In November 1930 he wrote to the Prime Minister again about his unemployment benefit and asking whether, if he couldn’t get either sickness benefit or unemployment benefit, perhaps they could give him a job with the labour exchange.  The Prime Minister’s office replied saying that, since he had followed all the appeal procedures, there was nothing they could do about his benefit but that should a suitable vacancy arise, he would be considered for a job.  By August 1931, his persistence seemed to have paid off as his next letter concerned his dismissal from a two month temporary contract at the labour exchange.  Unsurprisingly there was nothing that could be done, since: ‘retrenchments are necessary and that those who can best be spared are the ones who are selected first of all for retrenchment’.

Fast forward to 1938 and we find the same man writing to the Prime Minster again asking for a job.  This time we are told that he worked for a temporary period for the employment exchange in 1934 but had been laid off again.  The file closes with a polite letter from the Prime Minister’s private secretary ‘regretting that there are no vacancies at present for which you could be considered’.  At that point he seems to have given up.

Learning from the letters

What did I learn from this file?  I learned a lot about this particular claimant. Over the course of the correspondence, which amounts to thirty-three letters altogether, I learned that he was married and had seven children, including three who were grown up and unemployed , that he had worked in the ‘shirt and collar trade’ and that he had a war injury of some kind from the First World War and that he was desperate to find work. One thing can be said for him and that is his tenacity.

Lessons for today

What can we learn from this story today?  The main lesson for me is that people do not claim benefits frivolously.  They claim them because they need them.  If they have the energy and persistence to appeal against refusals, they might succeed in getting desperately needed income.  But many people do not have this kind of persistence.  They give up and they plunge further into poverty.  They may, like this man, attempt to get work but, in hard times, work may be short term and underpaid and many will soon find themselves back trying to claim benefits again.  Few have the tenacity of the man in the archives.  Much needed welfare rights and advice services will help but what we really need is a fair and accessible benefits system, which recognises the reasons why people need to claim in the first place: poverty.

Dr Jackie Gulland is lecturer in social work at the University of Edinburgh

For further information about this project see http://www.blogs.hss.ed.ac.uk/constructingincapacity/

(where an earlier version of this post was published).

Recent Changes to Measuring Child Poverty

Morag Treanor, Lecturer in Social Policy, University of Edinburgh

The Conservative government is planning to change the current measure of child poverty, which combines income (60% median equivalised) and material deprivation (21 items commonly agreed as essential by members of the general public for adults and children separately, which are then combined to create an index of multiple deprivation).[1]

The proposed new child poverty measure would comprise commonplace family characteristics such as: family ‘breakdown’, ill-health, lack of skills, inadequate housing, ‘poor’ schools and ‘worklessness’. Let’s lay aside the fact that these characteristics do not distinguish between poor and non-poor people as they are experienced by many people at different points in the lives[2]. Let’s also lay aside the fact that these dimensions do not measure poverty itself, but rather are risks, consequences or causes of falling into poverty. Let’s instead focus on what analysing income and material deprivation can tell us in relation to child wellbeing.

It is worth briefly commenting on the background to the current child poverty measure. It was reached after a period of extensive consultation using research evidence. Not only has the 60% median equivalised income measure succeeded in capturing the effects of complex economic situations, it is also the official child poverty measure of the EU, OECD and UNICEF, and is now used by other governments[3].To change this measure now not only negates the considered and considerable efforts of many, it will separate UK child poverty from the rest of Europe and beyond. The government also risks being accused of changing the goalposts in recognition of its impending failure to reduce or eradicate child poverty.[4]

Let us turn our attention now to income, material deprivation and child wellbeing. The following chart is from my recent analysis of six waves of the birth cohort study Growing up in Scotland (See Figure 1 below) when the children are aged six years old. The red line with mean equal to 0 is the average of child wellbeing across all children in the study. Any positive numbers above this line shows higher than average levels of child wellbeing and any negative numbers below this line shows lower than average child wellbeing.

This chart shows that material deprivation (solid line) and recurrent poverty (dotted line) are each associated with lower than average child wellbeing; increasing levels of either income poverty or material deprivation result in increasingly low levels of child wellbeing. However, when both recurrent poverty and material deprivation are measured together (combined multiplicatively in an interaction term to be technical – dashed line), this results in exceedingly low levels of wellbeing for children, greater than either material deprivation or income poverty added together. This indicates that income and material deprivation while related, for the definition of material deprivation is not being able to afford consensually agreed necessities, are picking up on different aspects of economic disadvantage, which when combined, equal to more than the sum of their parts in their association with low levels of child wellbeing. This suggests that using both income and material deprivation in a measure of poverty is valuable and necessary.

Figure 1 – Interaction term between recurrent poverty and material deprivation for child wellbeing

 

Another advantage to the current measure of income and material deprivation is that it is objectively measured and comparable across time and place. The proposed new components of child poverty, i.e. family ‘breakdown’, ill-health, lack of skills, inadequate housing, ‘poor’ schools and parental ‘worklessness’,  do not distinguish between poor and non-poor people but result in a highly stigmatised and distressed group of people.

[1] For more details on how this index is created, and what the implications are of how the index is created, please refer to Treanor (2014).

[2] I have written about this more fully in a consultation response.

[3] http://www.newstatesman.com/politics/2012/11/moving-goal-posts-wont-hide-coalitions-failure-child-poverty

[4] http://www.newstatesman.com/politics/2012/11/moving-goal-posts-wont-hide-coalitions-failure-child-poverty

Dr Morag Treanor is a Lecturer in Social Policy at University of Edinburgh

We need more resources than income alone

Paul Spicker, Professor of Public Policy, Robert Gordon University

We often identify material deprivation by looking at people’s incomes. The headline figures for Challenge Poverty Week refer to 900,000 people in low income households.   It’s not the only way to think about low resources.  For example, it’s becoming much more common in the developing world to work with a ‘proxy means test’, mainly a checklist of people’s possessions.  There are lots of practical problems with this – certainly more than enough to mean that it wouldn’t be a good way to do things here – but it also raises some important issues of principle.  We know, from the last report on Wealth and Assets in Scotland, that the bottom half of Scottish households own 6% of Scottish properties, less than 3% of pensions holdings, and less than 1% of the financial wealth.  No, that was not a misprint: these figures refer to the wealth of half the households in Scotland.

Because we focus so strongly on low income, the immediate connection that most people make from poverty is to income maintenance, and particularly to social security benefits.  Social security benefits are massively important, and much of my own work has been devoted to arguments to make benefits better.  Whenever we decide to focus on very low income, however, we are liable to make two critical leaps, and both of them have to be taken cautiously.  The first is to assume that people whose incomes are higher are less of concern.  We’re aware now that many people who are working are on low incomes, but the impact of causal, ‘flexible’ working, unpredictable incomes and debt stretches far beyond that.  The central issue is not risk, but vulnerability – the extent to which, if things go wrong, a household is liable to suffer.  The fewer assets and resources people have, the more vulnerable they become.  The opposite of vulnerability is ‘resilience’, and resilience depends on having command over resources.  The Scottish Government thinks of resilience as being about “the internal capacity of disadvantaged individuals to lift themselves and their families out of poverty”.   Resilience shouldn’t depend on pulling yourself up by your bootstraps.  It’s developed by having resources to hand, and systems that protect people from harm when things go wrong – systems like the health service, the education system and public housing.

That point leads to the second great leap.  Social security is about money; money assumes that people will be buying and selling goods; buying and selling goods assumes that the provision is in the private market.  Now, some things are provided in the private market, and we’ve largely been content to accept that:  we don’t expect government to provide people with shoes, and there’s not much call for a National Food Service.  We do need adequate benefits, because if we don’t have them people will go without essentials. We do, however, have some very important other needs provided through public provision, rather than through benefits.  We don’t pay for schooling by giving people the money to buy an education. Everyone in Britain  has the equivalent of insurance for medical care, whether they actually use it or not.

Currently we are using social security benefits to buy two other key items, and I’m not convinced that either is the right way to do things.  The first of those is child care, which we’re paying for rather haphazardly through Tax Credit.  Our child care is much more expensive and has a lower coverage than in countries where it’s subsidised or paid for more directly.  The second is housing, which we’ve been trying to provide through Housing Benefit.  We used to do it by providing public housing, supported by a general needs subsidy.  Housing Benefit is complex, expensive and far less effective in producing housing supply than council housing ever was.  (A third trend is noteworthy, but it hasn’t actually happened yet: there’s a big movement at present to marketise social care, and we should be looking at that with some suspicion.)  If we want to make a major impact on people’s lifestyles, giving people the money to spend is not necessarily the best way to go.

Professor Paul Spicker is based at Aberdeen Business School, Robert Gordon University. He blogs regularly at http://blog.spicker.uk/

The Production of Social Inequality and Social Insecurity: Uncovering the Class Politics of ‘Austerity’

Gerry Mooney, The Open University in Scotland

A year has elapsed since the September 2014 Scottish Independence Referendum, a referendum which many have claimed has led to far reaching change in Scotland, not least in the political landscape of contemporary Scotland. Alongside change, however is continuity and this is all so evident in that Scotland continues to be a society characterised by widespread and deepening problems of poverty, and the persistence of and indeed rising inequalities income and wealth. One important aspect of the 2014 Independence Referendum was that the voting outcomes reflected the uneven economic, social and political geography of Scotland, demolishing in an instance the idea that Scotland is some kind of homogenous or unified national community. There was a strong correlation between where people lived and their tendency to vote YES or NO to Independence. The evidence shows that the YES vote was highest in the most disadvantaged areas of Scotland. Further, across all local authorities there was also a marked relationship between areas of deprivation/affluence and the likelihood of voting YES or NO respectively.

Part of the explanation for this will surely lie in the fact that, contrary to claims that the campaign for Independence reflected a rise in Scottish nationalism, the entire ‘indy ref’ debate in no small part revolved around contrasting visions of social welfare and social justice and, in turn, around the issues of ‘austerity’ and welfare ‘reform’. It was clear that many of the 1.6m voting YES, as well as a sizeable number of NO voters, believed that change was necessary – that there were alternatives to austerity and to UK government approaches to welfare – either with independence or continuing membership of the UK union.

The notion of austerity has become one of the most used terms in recent times. It has been deployed in political and media narratives as a shorthand way of referring to the period of economic and financial crisis that engulfs much of the UK today. That ‘we’ live in an ‘age of austerity’ was the message of David Cameron, prior to becoming PM in May 2010. The term is increasingly used as a descriptor; almost as a technical, neutral and value-free way of describing UK Government policies. At a superficial level this may be helpful but it contributes little to our understanding of the drivers of austerity, its key outcomes and, importantly, the beneficiaries of austerity measures. In many respects it may actually detract from our understanding of the underlying political project that characterises austerity – and that there are winners – as well as millions of losers – as a result of the political choice that austerity programmes represent.

Readers of this short piece (as well as others in this collection) will surely be aware of the rising number of people in Scotland who are forced to rely on food banks, on support from charities, third sector and faith organisations, in order to survive. Across Scotland this daily struggle for survival is made all the more difficult by a range of welfare ‘reform’ measures that both reflect and reproduce a much harsher and more punitive approach to those experiencing poverty. Increasing numbers of people are being subject to various welfare ‘sanctions’ for seemingly breeching new benefit regulations. In turn this directly creates economic hardship. But more generally, Scottish society today is characterised by growing problems of food poverty and of fuel poverty. Yet even acknowledging this fails to really capture the enormity of the widespread problems of insecurity, risk and precariousness of different kinds which are impacting on many of the most disadvantaged sections of society.

The growing number of people who are in paid work but classed as poor or are in need of welfare support, the so-called ‘working poor’, reflects the increasing economic precariousness and insecurity that shape the daily lives of a growing proportion of the population. While this is rarely made explicit, the widening and deepening of social insecurities and precarity is exactly related to the impact of austerity in the workplace – as much as in relation to so-called welfare ‘reforms’.

Cutting wages, in work and out of work benefits, pensions and the social wage more generally, that is in the provision of public services, is also about restoring conditions for profit and wealth accumulation. This amounts to little more than the transfer of wealth and power into ever fewer hands – the consolidation and advancement of the economic and political interests of the already rich and affluent. In this way ‘austerity’ is understood as a class-based strategy that works to consolidate and promote the interests of the already affluent and wealthy, against those of workers and the most disadvantaged sections of society.

This signals a more critical understanding of ‘austerity’ which interprets it as a deliberate programme of regressive redistribution: the large-scale redistribution of income from the bottom to the top of society, while making the most disadvantaged carry the brunt of the costs of the ongoing economic and fiscal crisis. Austerity programmes are dismantling not only welfare benefits and services, but also the mechanisms and structures which work to reduce inequality and enhance equity. In this respect it represents little more than an assault, a class-based and political assault, on the foundations of the post-1945 welfare state and the idea, enshrined in the post-1945 social contract, that the state has a vital role to play in reducing inequalities and supporting the most vulnerable by providing benefits and services.

How we approach the issue of austerity, as with poverty, is absolutely central to how it is understood and these shape any policies that follow. Poverty is no accident and neither is austerity: they are not inevitable but represent clear political choices to increase the accumulation of wealth and capital by the rich at the expense of those in the most precarious and disadvantaged social positions. Scotland is a wealthy country. A report published by Oxfam Scotland[i] in October 2015 highlights that the four richest families in the country are worth £1b more than the poorest 20% of the population, accounting for some £6.1b. Other recent research[ii] demonstrates that the ratio between the highest paid ten percent and the lowest paid ten percent of the population is now at its highest level since the mid-1970s, and the difference between the incomes of the top and bottom one percent is now over twenty times – and is increasing.

As the gap between rich and poor reaches unparalleled levels, it is incumbent on all of us who are concerned to tackle poverty to push for an anti-poverty strategy that empowers the poorest to gain greater income and provides greater bargaining power for workers in the labour market. Only through such measures can poverty be effectively addressed. This means increasing the ability of trade unions and workers to force employers to divert higher shares of profits to wages against the share going to dividends and ever higher managerial salaries. Work can only be a route out of poverty if workers have the power to bargain for decent wages and better conditions of employment. Past and current assaults on trade unionism and collective bargaining mark the political determination of successive UK Governments to increase the share that goes to profit and dividends, that is to the already wealthy and privileged. Such an approach lays bare the class politics and the class interests that underpin ‘austerity’ today.

[i] CPAG Scotland, Scottish Parliament must do more to ‘Even it up’. October 8 2015

http://www.oxfam.org.uk/scotland/blog/2015/10/scottish-parliament-must-do-more-to-even-it-up

[ii] Bell D and Eiser D., (2015), ‘Inequality in Scotland: trends, drivers and implications for the independence debate’, Stirling University Management School Working Paper, p.8 and figure 9.

http://www.centreonconstitutionalchange.ac.uk/sites/default/files/papers/inequality-paper-15-nov-final.pdf

Dr Gerry Mooney is Senior Lecturer in Social Policy and Criminology, Faculty of Social Sciences, The Open University in Scotland. He is co-editor of Poverty in Scotland 2014: The Independence Referendum and Beyond (Child Poverty Action Group, 2014). This is available on OpenLearn @

http://www.open.edu/openlearn/people-politics-law/poverty-scotland-2014-the-independence-referendum-and-beyond

Among other projects, he is currently working on Poverty in Scotland 2016: Principles and Tools and Targets Towards Transformation, to be published by CPAG in February 2016)

Gerry @ Web: http://www.open.ac.uk/socialsciences/main/staff/people-profile.php?name=Gerry_Mooney

Gerry @ OpenLearn: http://www.open.edu/openlearn/profiles/gcm8

Gerry @ The Conversation: https://theconversation.com/profiles/gerry-mooney-123416