A HARSH AND UNCARING ETHOS
For over nine years, ever since May 2010, the Conservatives have been in office and in charge of the UK’s public expenditure. For the first five years, up until May 2015, the Liberal Democrats joined with the Tories in a Coalition Government and thereby fully shared responsibility for the harsh fiscal policies that did so much harm, especially to poorer families with children and to disabled people.
In November 2018 a UN Special Rapporteur on Human Rights, Professor Philip Alston, visited the UK. His mission was to investigate the extent of extreme poverty in our country. He reported in May 2019, finding that
“much of the glue that has held British society together since the Second World War has been deliberately removed and replaced with a harsh and uncaring ethos.”
Professor Alston also stated that the cuts that had been made since 2010 were “ideological” and that government policies had led to the
“systematic immiseration [economic impoverishment] of a significant part of the UK population, meaning they had continually put people further into poverty.”
CONTENTS OF THE BRIEFING PAPER
This briefing paper examines some essential issues:
- The two-ponged assault on welfare
- How many of us are living in poverty?
- Benefits and Universal Credit
- Child poverty and the freeze in benefits
- People with disabilities
- Private sector rentals
- Food banks
- Children’s and adult social care
THE TWO-PRONGED ASSAULT ON WELFARE
There has been a two-pronged assault on welfare, severely affecting the most vulnerable in our society.
On the one hand there has been a drastic reduction in benefits and tax credits paid to numbers of the most disadvantaged. This has been accompanied by a punitive policy of sanctions imposed on claimants who fall foul of the bureaucratic requirements generated by an uncaring system.
On the other hand vital services, provided by local government, have had their funding slashed and the charities that try to plug the gaps have insufficient funds. The most vulnerable are suffering the most. All this is happening when an increasing number of jobs are in the so-called gig economy, insecure and low paid. Meanwhile demand for essential public services from an ageing population is steadily growing. The cuts are especially damaging in regions that have fallen behind economically compared to the rest of the country. North-East England is one such region.
The overall effect of the twin assault has been to compromise what has been built up for over a hundred years, a compassionate welfare system that was intended to protect all of us from poverty and dire need. Of all British political parties it is Labour that has made the greatest contribution to the building of a welfare state and welfare society. Yet in the past one of the most significant of all the social reformers was a leading Liberal, William Beveridge. It was he who in the darkest days of the Second World War wrote a pathbreaking report on welfare. This history makes the actions of the Lib Dems between 2010 and 2015 all the more shameful.
At the time when the Tories and Lib Dems began to impose the cuts the then Chancellor, George Osborne, avowed that “we are all in this together”. This was simply not true. The burden has fallen disproportionately and quite unfairly upon those least able to bear it. Diminishing or stagnating incomes that are so hard to bear for millions of our fellow citizens are made worse by a laboyr market in which many jobs are low paid and insecure while high rents make reasonable accommodation unaffordable.
What would be the likely impact of Brexit, and particularly of a No-deal Brexit, upon poverty in the UK? In August 2019 the Poverty Alliance asked three government departments for this information under Freedom of Information (FOI) rules. In its response the Department of Work and Pensions (DWP) admitted that it held some of the information but declared that an exemption under the FoI law enabled them to refuse tp hand over the figures. They claimed that disclosure would not serve “the public interest”. (Poverty Alliance 1st September 2019)
HOW MANY OF US ARE LIVING IN POVFERTY?
How many people are living in poverty in the UK? The 2019 report of the Social Metrics Commission found that:
- There are 14.3 million people in poverty in the UK. This includes 8.3 million working-age adults.
- A third (31%) of people in poverty – 4.5 million people – are more than 50% below the poverty line.
- Just under half (49%) of those in poverty are in persistent poverty, meaning they are in poverty now and have also been in poverty for at least two of the previous three years. This totals 7 million people.
- Nearly half (48%) of people in poverty – totaling 6.8 million people – live in a family where someone is disabled.
- Poverty rates amongst families from ethnic minorities are particularly high.
Like inequality, poverty can be measured in different ways and its impacts are felt more or less severely amongst different social groups. One of the most significant findings of the Institute of Fiscal Studies (IFS) in a recent report is that
“Between 1994 and 2017 there was an increase from 13% to 18% in the proportion of people in working households living in relative poverty (that’s an increase of 40%). So by 2017, 8 million people in the UK living in working households were in relative poverty.” (IFS: Living standards, poverty and inequality in the UK, 2019)
BENEFITS AND UNIVERSAL CREDIT
The government’s own welfare reforms were supposed to bring about “welfare that works”. This has not happened. Instead, the reforms have caused confusion and hardship. Yet a great deal of public money is spent on the social security system: it was forecast to be £215 bn in 2017-18 as compared with £149 bn on health spending and £184 bn on education, defence and public order combined. Within the overall benefits system there inevitably balances to be struck.
One of the most important of these balances is that between on the one hand children and working-age adults (whether or not they actually are in work) and on the other hand pensioners.
The government has been able to massage the costs of supporting pensioners by increasing the State Pension Age and eliminating. Yet the so-called Triple Lock has meant that pensioners have been protected against inflation. This is not good news for older people over 60 who are quite unable to get work and are trapped in the benefits system.
There have been deep cuts to benefits for children and working-age adults. These are felt most keenly by individuals and families who are the poorest and who are thereby the most dependent upon benefits.
It is these millions who survive as best they can on low incomes that constitute the group who have been targeted by the government. This is because reducing their entitlements can make the greatest savings on the overall welfare bill – and cause the greatest and most widespread misery. The mechanism adopted by the government for making the cuts in large part has been a virtual freeze year-on-year on increases to compensate for inflation. In this way, claimants have been pushed deeper and deeper into poverty – and for many households into unsustainable debt.
Part of the rationale for the freeze was stated by George Osborne (David Cameron’s Chancellor between 2010 and 2016). This was a naked attempt to stigmatise claimants. Osborne said he was
“being fair to the person who leaves home every morning to go out to work and sees their neighbour still asleep, living a life on benefits.” (Chancellor’s Statement 2012).
Osborne’s contemptuous comment was not only cruel but also misdirected. In actual fact, the virtual freeze on benefits hurt not only unemployed people but also the millions of others who were in work but on such low incomes that they still needed state support through the benefits system to try and keep their heads above water.
The Conservatives’ flagship policy has been the Universal Credit scheme. Promoted since it was first announced in 2010 as a great simplifier in the complex benefits system it has repeatedly failed to meet its deadlines and has been judged by the National Audit Office to have been afflicted by “weak management, ineffective control and poor governance”.
“Universal Credit has in many ways come to define the cruel incompetence of the austerity era, in which social security – rather than providing a safety net for people in time of need – actively pushes them into crisis. Just this month, research by [the union] Unite showed claimants were routinely going hungry – more than four in 10 have been forced to use a food bank – and are left unable to pay bills. Some were even suicidal.” (Guardian1st October 2019)
Research in England’s North-East has confirmed what for years has been widely recognised by the voluntary organisations that try to help and advise claimants as well as by MPs, academics and other observers.
“In line with a recent report by the National Audit Office, ongoing research in Newcastle and neighbouring Gateshead has demonstrated that Universal Credit is causing significant hardship. Serious problems with the claims process and long delays in awarding correct payments were regularly experienced. As a direct result of the low level of Universal Credit payments and high debt repayments incurred through obtaining an advance loan, claimants reported impacts on physical health and wellbeing, which included sleep, pain and exacerbation of long- term conditions (e.g. diabetes, musculoskeletal problems). Mental health problems were rife: stress, anxiety, depression, self-harm and suicidal thoughts”. (Institute of Health and Society (IHIS) Newcastle University September 2018)
A powerful motif in Labour’s approach is to change the “punish and police” culture in the Department of Work and Pensions (DWP) with a new approach that treats claimants with dignity and respect. If Labour is elected to power the DWP would be replaced with a new Department of Social Security.
At a rally on 28th September Jeremy Corbyn spelt out some of the reforms that Labour would introduce. One of these would be to scrap the Universal Credit scheme that was supposed to make welfare easier and instead has made poverty so much worse. Specifically, the humiliating Capability Test for Work would go. The sanctions that are frequently imposed on claimants who do not conform with the DWP’s demands would also go and 5000 new advisers would be appointed to help rather than punish claimants. Rent could be paid directly to landlords. The iniquitous two-child limit would be eliminated. Careers’ allowance will be made the same as Job Seekers Allowance and Employment and Support Allowance will be raised by £30 a week. Payments will be made fortnightly so that claimants no longer have to wait 5 weeks.
CHILD POVERTY AND THE FREEZE IN BENEFITS
Child poverty rates vary considerably across the country. According to the Child Poverty Action Group (CPAG) the rate for the Berwick-upon-Tweed constituency in 2016-17 was 34%. Generally speaking, in the UK as a whole, child poverty rates were steadily reducing up until 2010. Thereafter they fluctuated and from 2015 began to climb.
“There were 4.1 million children living in poverty in the UK in 2017-18. That’s 30 per cent of children, or nine in a classroom of 30. There are expected to be 5.2 million children living in poverty in the UK by 2022….. Work does not provide a guaranteed route out of poverty in the UK. 70% of children growing up in poverty live in a household where at least one person works…Children in large families are at a far greater risk of living in poverty – 43% of children living in families with 3 or more children live in poverty.” (Child Poverty Action Group (CPAG) Facts and figures 2019)
It was not intended to be like this. In 2010, while Labour was still inb office, the three main parties signed up to a target to end child poverty by 2020 and this target was enacted in the Child Poverty Act of that year. In 2016, the Conservative majority in Parliament passed the Welfare Reform and Work Act. abolishing the 2010 Chile Poverty Act and abandoning the commitment to end child poverty by 2020.
The freeze in benefits imposed by the Tories has contributed to a dramatic rise in child poverty in families with three or more children, up nine percentage points since 2013-14. In April 2016, making an already bad situation worse, the Tories declared a freeze on benefits such as Universal Credit, Tax Credits and local housing allowance. According to the Guardian (2nd September 2019) this saved the Treasury £4.4bn in one year alone but has inflicted 6% real terms cuts to benefits once inflation was taken into account.
“[Citizens Advice] said since the level of most benefits such as Universal Credit and tax credits was frozen in 2016, it was having ‘serious consequences’, with more than a quarter of people who claim benefits saying financial worries had made them feel lonely or isolated or affected their mental health.” (Guardian 2ndSeptember 2019)
Meanwhile costs continue to rise, sometimes quite substantially. An example of the kind of stress that this can cause comes from the VCS Assembly for Northumberland in its report for April 2018:
“Funeral costs have spiraled – 80% in the last ten years. At the same time government grants, which used to cover the cost of a basic funeral for people on low incomes, have eroded and now fall way short of the overall bill.”
Where both parents are working the chances are that children will not be living in poverty. However, things are different for lone parents.
“Children in lone-parent families have high poverty rates, even when their parent works full time. In lone-parent families working full time poverty has risen from 13% in 1996-97 to 23% in 2016-17. Between 1996-97 and 2010 the child poverty rate in lone-parent families working part-time halved from 46% to 23%. It has since risen back to 38%. (Joseph Rowntree Foundation referenced 3rd October 2019)
PEOPLE WITH DISABILITIES
There are far more of us who have some form of disability than is commonly realised. The estimated figure is 11.9 million (6.4 million women and 5,5 million men) and there are millions more who care for a loved one who is chronically ill or disabled. Research by the Joseph Rowntree Foundation has shown that in 2018 over a third of all adults living in poverty were disabled. That is 4 million people.
For the individual disabled person it is not only that benefits are pitched so low that frequently there is not sufficient money to pay for the basic necessities: food or heating or rents or to repair a broken-down appliance like a washing machine. There are also increased demands on depleted incomes such as payment for items (e.g., incontinence pads) that once were provided for free. When David Clanson, a diabetic. died in 2013 he had no money to pay for credit on his electricity and therefore could not keep the fridge working in which he kept his insulin. Neither could he afford to buy food. Within 3 weeks of having his Jobseekers Allowance sanctioned because he had missed two Job Centre appointments he had died from diabetic ketoacidosis. His sister noted that there was a pile of CVs beside his body. Since then research has found that disabled out-of-work people are 53% more likely to be sanctioned than other claimants who are not disabled.
The hardship caused to disabled people is often cumulative, one cut following upon another. And the decision making, which the government has put into the hands of private companies, is seriously flawed: nearly 70% of appeals against these decisions are upheld.
PRIVATE SECTOR RENTALS
Recent research by the National Housing Federation (NHF) has found that Local Housing Allowance (LHA) could cover only 7.5% of the 75,000 private sector rentals that it analysed. In some areas less than 1%of homes were within the budget of households on LHA. of households on LHA. Kate Henderson, chief executive of the NHF, said:
“Low-income families in England are being punished two-fold. No longer able to access social housing because of the dire shortage of it, they now can’t access enough housing benefit to rent privately either.
“The crippling effects of the housing crisis and significant cuts to benefits have forced thousands of parents into impossible situations in order to keep a roof over their children’s heads, many having to choose between crippling debt, overcrowding or homelessness.” (Independent 7th October 2019)
An MPs’ report in July 2019 has found that more and more people have become dependent upon food banks. One charity worker whom they met in Chester said: “I don’t meet a single person who isn’t cold and hungry.” There are now over 2000 food banks in the UK. In one town in northern England a food bank that gave out 3 tonnes of food in 2011 was. distributing 4 tonnes a month by the end of 2018. Recent research by a foodbank network, the Trussell Trust, has revealed:
“Claimants unable to cope without income during the waiting period faced destitution, Trussell said. They were unable to afford food, frequently went without meals, failed to pay utility bills, ran up rent arrears and risked eviction.
“Food bank use had soared by a third in areas where Universal Credit had operated for a year,[said the Tressell Trust], drawing on data from 414 food banks. Demand for food parcels increased by 40% where Universal Credit had been in place for at least 18 months, and 48% where it had been established for at least two years.” (Guardian 19th September 2019)
CILDREN#’S AND ADULT SOCIAL CARE
Councils’ spending on adult social care fell by 10% in real terms between 2009 and 2015, and it was budgeted to be 3% lower in 2018 than in 2009. The Campaign for Better Transport has calculated that local spending on buses in England has been cut by £172 million in real terms since 2010-11, a reduction of 46%. “HIS Newcastle University August 2018)
For several years charities and local government alike have been sounding the alarm at desperate funding shortfalls. According to the National Audit Office, government funding for local authorities fell in real terms by 49.1% between 2010 and 2018.
In January 2019 the Local Government Association (LGA) warned of the crisis in funding for children’s services.
“Funding shortages for social services that protect vulnerable children have pushed nearly nine in 10 councils into the red. New analysis by the LGA reveals today, prompting warnings that funding for children’s care is now in a country-wide crisis… Councils say that the combination of increased demand and cuts in central government funding have left children’s services at a tipping point.” (LGA 8th January 2019)
In February the House of Commons cross-party Public Accounts Committee (PAC) revealed that after eight years in which central government funding had halved, councils were under “enormous pressure” just to maintain essential services. In their view ministers were in denial and had no plans to do anything about the crisis.
“Responding to the PAC report, Cllr Richard Watts, Chair of the Local Government Association’s Resources Board, said :’With councils in England facing an overall funding gap of £8 bn by 2025, we are pleased the Committee has reinforced our warning that funding cuts and demand pressures are pushing local services to the brink”. (Home Care Insights 7th February 2019)
Since 2010 a cumulative total of £7.7bn has been cut from adult social care budgets in England. This figure was announced by Julie Oxley, Director of the Association of Directors of Adult Social Services (ADASS) in early July.
“They and their councils were having to make invidious decisions that ‘should not be allowed to happen in a modern, compassionate society,’ she said”. (Guardian 2nd July 2019)
The negative impacts on children’s wellbeing is felt in a host of ways.
“Child poverty campaigners said the research showed how school summer holidays offer a ‘bleak outlook’ for growing numbers of children in London. The Childhood Trust has warned that cuts to youth services and charity grants – which disproportionately affect low income families – mean more than half a million children in the city will go hungry during the long summer holidays”. (posted by Laurence Guinness, Childhood Trust 21stJuly 2019)
Age UK has described the care system as “working at full pelt, stretched to its limit and still failing people left, right and centre”.. An estimated 1.4 million people who need care are not receiving it as the result of cuts to Council funding while others are receiving only the most basic service – “clean and feed”. In February 2019 Age UK estimated that, 54,000 people in England – or 77 a day – have died while waiting for a care package in the 700 days since the government first said in March 2017 it would publish its social care green paper.
In early September 2019 the new Conservative Chancellor, Saiid Javid, brought before Parliament a spending review that instead of the customary multi-year exercise was for one year only. He announced that there would be what he described as the end of austerity and an additional £13,8 bn for departmental budgets. Within this total there would be a further £1.5bn for local government care services in the next financial year (1920-21). Any long-term solution to what is widely viewed as a near broken system remains on hold. The new funding would fall far short of reversing cuts made since 2010.
In a blog of 13th September one Kings Fund researcher accepted that the additional new funding would just about avoid disaster – but only for the time being.
“The hope will be that this keeps the system just on the right side of the tipping point – we shall have to wait and see. We can hope this is enough to delay by one year the risk highlighted by the Association of Directors of Adult Social Care Services that someCcouncils will start decommissioning services in the Autumn.”
In a speech in the House of Commons the Shadow Chancellor, John McDonnell, described the one-year Spending Review as electioneering and the additional allocation for social care as a sticking plaster., saying that it would leave the sector in the same sorry state as it is now.
“With 1.4 million not getting the care they need and 87 people dying each day while waiting for care…. What about those forgotten in the Chancellor’s opportunist one-year spending round? What about the real structural reforms to address the social care crisis which we have been waiting for – for years now?”
At the time of writing the Institute of Fiscal Studies has cast serious doubt on the viability of the Chancellor’s ’s forecast for public spending in 20120-21. This warning has been made in the light of uncertainties surrounding Brexit and its negative impacts.