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

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