Empowered to Succeed or Set up to Fail?

Unprecedented. The last two years have certainly been unprecedented for us all and the rippling effects of the covid pandemic, coupled with the impact of Brexit, are resulting in fresh economic challenges for many of us. With rising inflation, interest rates and energy prices, households are facing a rapidly increasing cost of living. At the time of writing the news is full of families who are struggling to cope. There is increasing pressure for the government to do more to help households face this rising cost in living.

Any support for those who are struggling is welcome and needed but the plight of those on the lowest incomes is not a new phenomenon. Whilst there are a number of different ways of measuring poverty, before the covid-19 pandemic the government’s figures showed that a massive 8.4 million working age adults and 4.2 million children in the UK were living in relative poverty or almost 1 in 4 and 1 in 3 UK children.[1]

A 2020 report from the UK government stated that ‘the link between childhood and adult poverty appears to be strengthening over time…this is deeply concerning for the opportunities of the current generation of children to be socially mobile, when nearly one in three live in relative poverty’.[2] Successive governments have taken different approaches to the longstanding issue of poverty but the issue only seems to be growing with the challenges of the pandemic only making the situation worse. In the year 2020/2021 Trussell Trust, which operates over half of the foodbanks in the UK, distributed a record 2.5million food parcels.[3]

So why are so many people struggling to afford to live?

Social Security: Are recipients set up to fail?

You would be forgiven for thinking that the UK’s benefit system is a ‘safety net’ that ensures that no-one throughout the UK goes hungry and has enough income for basic living expenses, especially those who are out of work. However, benefits are not a barrier to people experiencing poverty. The UK benefit system is currently split between those on old style ‘legacy’ benefits (2.4million people in Dec 21) and those who have been transferred to the new Universal Credit System (5.6 million people in Dec 21).[4]

The system is designed to encourage people into work using reducing benefits as an incentive. Despite multiple Government attempts to find it, there is no serious evidence this approach gets more people into work. But even for those who do get employment, work often does not offer a route out of poverty. In fact, the majority of people who live in poverty do work,[5] and 75% of children growing up in poverty live in a household where at least one person works.[6] Additionally, there are those who are in poverty but who are unable to work: more than half of the 14 million people in poverty are disabled or live with someone who is.[7]

Data from the Joseph Rowntree Foundation (JRF) shows that in 2019/20, 54% of those on Universal Credit, 19% on Disability Benefits and 30% on Carer’s Allowance were in relative poverty after housing costs.[8]

Renée works as a mental health support worker in the NHS. Her hourly rate is just above the minimum wage and, although she takes as much overtime and night shift work as she can to increase her earnings, the family still struggle to get by.

With her youngest daughter three years old and her youngest son eight, Renée’s long working hours mean that she has very high childcare costs. Renée spends £115.80 a week to keep her three-year-old daughter, Zennisha, in nursery. She also pays £32.50 a week in after-school care for her 8-year-old son, Tyrone.

Renée’s 80-year-old mother, Edith, has poor eyesight and trouble walking long distances, so she now lives with her daughter. Edith helps as much as she can with the childcare, and without her help Renée would struggle even more.

The family live in a three-bedroom council flat on a Hackney estate. There is severe damp in the flat and one of the bedrooms in uninhabitable. The family is forced to share not just bedrooms but also beds. Edith shares a bed with her grandson, Tyrone, and Renée and her two daughters share a bed. The family can’t afford to move into better housing and the council have told them they are adequately housed.[9]

A bright future?

In the last few years, Universal Credit has been rolled out and sought to consolidate the different benefits paid to recipients and simplify the system. This is a worthy goal as it has the potential to reduce the cost of administrating the social security system. The government stated that ‘We have ensured that no-one will experience a reduction in the benefit they receive as a result of the introduction of Universal Credit.’[10] However, this was only achieved through ’Transitional protection‘ payments that were short term and only continued until any element of someone’s case changed. These changes could include moving house, changing their bank account or getting a job. In reality, it means that Universal Credit often results in a reduction in the benefits Despite the cost of living crisis DWP moved to the next stage of moving the most vulnerable claimants onto the new benefit this month[11].

This is a further reduction to benefits as they were frozen between 2015 and 2020. This freeze affected more than 27 million people and swept 400,000 into poverty.[12]

How Are Benefits Calculated?

If benefits are intended to protect those experiencing financial hardship, then there is clearly something going wrong. Why are so many people who are eligible for benefits including due to disability, unemployment and low wages struggling to make ends meet?

Recent research from the Food Foundation found that 47.7% of Universal Credit claimants have experienced food insecurity in the past six months.[13]

The government has released no data to show how they have chosen the figures that different groups receive e.g. single parents or couples with no children. The Joint Public Issues Team (JPIT) has previously submitted a Freedom of Information Request asking for any evidence the Government held to substantiate their claim that levels of benefit were calculated to be enough to live on. The information provided fascinating historical detail, but at no point in the story was an assessment of needs used as the basis of setting benefit rates.

Households are struggling to cover the cost of basic expenses while the benefit ‘safety net’ is not sufficient to prevent many families and households falling into poverty.

Why does it matter?

It is easy to become desensitized to the idea that there are people in our society who are living in poverty. Isn’t that an inevitable reality? Didn’t Jesus say that ‘the poor will always be with you’? Jesus has just been anointed by a woman who broke a jar of expensive perfume and poured it over his head. The disciples rebuke her and say that she should have instead sold the perfume and given the money to the poor. Jesus replies to them “Why are you bothering this woman? She has done a beautiful thing to me. The poor you will always have with you, but you will not always have me.” (Matthew 26:10) Jesus is almost directly quoting from Deuteronomy 15, a chapter setting out rules such as regular debt cancellation and how to run a society so that poverty is tackled systematically and fairly. Jesus’ statement is not a casual dismissal of poverty as it is often portrayed: it is a rebuke to someone asking a bad-faith question, and a pointer to where a serious answer could be found.

Churches choose to hear this call from God to care for the poor and needy and we remain unsatisfied with the current number of people who are living in poverty and who are struggling with basic daily expenses. On behalf of our churches, JPIT advocates for a fairer system that treats each person with dignity and that includes challenging a system which results in millions of people being pushed into poverty. As Christians we believe that everyone is made in the image of God. We each have incredible value and potential and are loved by God. Isaiah 1:17 describes how the people of God are to care for the disadvantaged: ‘learn to do what is right; seek justice. Defend the oppressed. Take up the cause of the fatherless; plead the case of the widow.’

Rather than acknowledge the daily reality of those on the lowest incomes, we see changes such as the ‘Way to Work’ scheme announced in January. It aims to get people into work faster by reducing Universal Credit payments for those not in work four weeks after starting their Universal Credit Claim. The hopes are that this will help to fill the high number of current job openings. However, this frames the problem being with the person who is currently unemployed; are they lazy? Stubborn? Unwilling to put the work in to apply for work? Unable to make good decisions? Studies show that schemes that push people into work result in people taking unsuitable jobs and may have lower wage potential than if they had been given longer to look for work.[14] For example, they may be responsible for child care and need a job that has hours that can work around school pick up times, or they might want to work in a competitive field that they need longer to find a role in.

Empowered to Succeed?

So how could the benefit system be designed around the amount of money that people need to be able to afford living expenses and not be pushed into poverty?

The Joseph Rowntree Foundation (JRF) is one of the pioneers of research that seeks to answer this question. They conduct yearly research into what they call the ‘minimum income standard’ by asking members of the public what they consider to be a ‘minimum socially acceptable standard of living’. These insights are then quantified to produce figures for the necessary income for those in different living situations. In 2021 they found that out of work families with children on Universal Credit fall about 40% short of reaching the Minimum Income Standard and those without children fall 60% short.[15] This is a different way of thinking about income than just looking at who are living in relative poverty, the amount of income that is needed is directly linked to the cost of living.

The Commission on Social Security has also released a proposal for how the principle of income adequacy could be utilised to reform social security. They consulted claimants themselves to discover how the system could support those out of work or with a disability etc and produce a productive and successful benefit system. Their 2022 report ‘The plan: for a decent social security system’ suggests ‘scrapping universal credit and replacing it with a “guaranteed decent income for all”, set at 50% of the minimum wage (£163.50 a week); the end of benefit sanctions; and an end to using social security as a sticking plaster for failures elsewhere by abolishing zero-hour contracts and introducing free early child education and care.’[16]

The report also contained a 5-step plan for how the Social Security system could be improved: 1. A guaranteed minimum income 2. Adequate child benefit for each child 3. A new disability benefit 4. More trust towards recipients 5. Wider support for recipients. [17]

These are two ways that the benefit system could be re-thought to ensure that those who are on the lowest incomes are freed from the burden of poverty or destitution hanging over them.

Empowered to Succeed or Set up to Fail?

Failure is no small matter when we are living through a cost-of-living crisis when many are already struggling with low income and insufficient benefits. Many are struggling with basic expenses link putting the heating on, buying their child a birthday cake or paying for the bus fare to get to the supermarket. But this is not inevitable if the benefit system could be reformed to truly empower us all to succeed.

[1] Defined as income below 60% of median household income after housing costs. Households below average income: 1994/5 to 2018/19, www.gov.uk/government/statistics/households-below-average-income-199495-to-201819. Read more about different ways that poverty are measured in this recent JPIT blog

[2] Monitoring Report 2013 to 2020 (publishing.service.gov.uk) p18-19.

[3] Food Banks in the UK – House of Commons Library (parliament.uk)

[4] Stat Explore: People on Universal Credit, December 2021.

[5] Majority of people living in poverty are in work, report finds (peoplemanagement.co.uk)

[6] Households Below Average Income, Statistics on the number and percentage of people living in low income households for financial years 1994/95 to 2019/20, Table 4.3db. Department for Work and Pensions, 2021

[7] Disability benefits and support after coronavirus | Disability charity Scope UK. Time to think again report.

[8] Poverty rates by benefit type | JRF

[9] A low-paid worker | Poverty and Social Exclusion

[10] universal-credit-full-document.pdf (publishing.service.gov.uk)

[11] https://www.mind.org.uk/news-campaigns/news/leading-charities-unite-to-tell-uk-government-to-halt-managed-migration/

[12] End the benefit freeze to stop people being swept into poverty | JRF

[13] Food Insecurity Tracking | Food Foundation, slide 5

[14] Way to Work scheme: forcing people into jobs they aren’t suited for has damaging effects (theconversation.com)

[15] A Minimum Income Standard for the United Kingdom in 2021 | JRF

[16] Commission on Social Security

[17] Commission on Social Security

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