Universal basic income: too good to be true?

“I am now convinced that the simplest approach will prove to be the most effective – the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” Martin Luther King, 1967

It may come as a surprise to learn that the current ‘hot topic’ of universal basic income (UBI) – also known as basic income or income guarantee – is actually over 500 years old.

It was first developed by radicals such as philosopher Sir Thomas More in the 16th century, drawing upon humanist philosophy.  It was mooted by Thomas Paine in the 18th century, and then again in the mid-20th century, by economists such as James Tobin and Milton Friedman.  In 1967, Martin Luther King called for a ‘guaranteed income’ to abolish poverty, and in the 1970s, a basic income experiment ‘Mincome’ was conducted in Canada.

However, only in recent years has debate on universal basic income (UBI) moved into the mainstream.

From the threat of job losses from automation and artificial intelligence, an overly complex and bureaucratic welfare system that has been branded ‘unfit for purpose’, to the failure of conventional means to successfully tackle unemployment over the last decade – basic income has been hailed as a key way to reduce inequality and provide a basic level of financial security upon which individuals can build their lives.

It has many current supporters – including billionaires Elon Musk, Mark Zuckerberg, and Richard Branson.  There is support among the general public too, with a recent poll reporting that nearly half of all adults aged 18-75 in the UK (49%) would support the UK Government introducing UBI at the level to cover basic needs in principle.

 

How does it work? 

In essence, UBI offers every citizen a regular payment without means testing or requirement for work.

Trials of different models of basic income have been conducted around the globe, including Kenya, Finland, and Canada.  There are also UBI trials planned in the district of Besós in Barcelona, Utrecht in the Netherlands and the Finnish city of Helsinki.  Closer to home, four areas in Scotland are also currently designing basic income pilots – Glasgow, Edinburgh, Fife and North Ayrshire.

While there have been many different models of basic income trialled and assessed over the years, in general, basic income schemes share five key characteristics:

  • Periodic: it is paid at regular intervals, not as a one-off grant.
  • Cash payment: it is paid in an appropriate medium of exchange, allowing those who receive it to decide what they spend it on. It is not paid in kind (such as food or services) or in vouchers with a specific use
  • Individual: it is paid on an individual basis—and not, for instance, to households.
  • Universal: it is paid to all, without means test
  • Unconditional: it is paid without a requirement to work or to demonstrate willingness-to-work

 

Anticipated benefits

The key anticipated benefits of the introduction of UBI is a reduction in inequality and poverty. However, advocates claim that it would also have many other benefits.  These include:

  • simplifying the existing welfare system (including efficiency gains)
  • reducing the psychological burden and stigma associated with welfare benefits
  • achieving more comprehensive coverage – no one ‘slipping through the net’
  • fixing the threshold and ‘poverty trap’ effects induced by means-tested schemes
  • enabling individuals to continue education and training, or retrain, without financial constraint dictating choices
  • making childcare arrangements easier
  • rewarding unpaid contributions such as caring and volunteer work
  • improving gender equality and help women in abusive situations
  • improving working conditions
  • addressing predicted future mass unemployment as a result of automation

 

Criticism

The key argument against the introduction of UBI is its cost – essentially that “an affordable UBI would be inadequate, and an adequate UBI would be unaffordable”.

Critics argue that if UBI were set at a level that enabled a modest, but decent standard of living on its own, then it would be unaffordable – either requiring much higher taxes, and/or the redistribution of funds from other areas, such as education or health.

However, if UBI was set too low, it would not provide an adequate income to live on, and it may be exploited as a subsidy for low wages by unscrupulous employers.

Others, such as economist John Kay, have argued that UBI simply would not have the redistributive effects intended.  Rather than improving the lives of those most in need, who would receive more or less the same as they do under existing welfare systems, it would instead provide more for the middle classes.

There is also some concern that UBI may undermine the incentive to work, and lead to the large-scale withdrawal of women from the labour market.

 

What does the evidence say?

Certainly, there is a beauty in the simplicity of UBI – and no one can argue against the goals of reducing inequality and poverty.  However, in truth, there just isn’t enough evidence available yet to judge whether or not the full-scale introduction of UBI would be successful.

While many pilots have demonstrated positive results, most have been of limited size and scope, and it is difficult to extrapolate these findings to the wider population.

Analyses by a wide range of organisations – including the RSA, the Joseph Rowntree Foundation, the OECD, and the International Monetary Fund, have drawn mixed results.

For example, a review conducted by Bath University in 2017 concluded that:

The unavoidable reality is that such schemes either have unacceptable distributional consequences or they simply cost too much. The alternative – to retain the existing structure of means-tested benefits – ensures a more favourable compromise between the goals of meeting need and controlling cost, but does so at the cost of administrative complexity and adverse work incentive effects.”

Similarly, the IMF conclude that in the UK and France, UBI would be inferior to existing systems in targeting poverty and inequality. However, there are some aspects of UBI that are difficult to model, such as the behavioural impacts of having economic security.  Trials and experimentation are important sources of such information.

Thus, the planned trials of UBI in Scotland and elsewhere may well help to provide further answers.  And we – along with others around the world – will be watching with interest.

As First Minister, Nicola Sturgeon aptly puts it:

It might turn out not to be the answer, it might turn out not to be feasible. But as work and employment changes as rapidly as it is doing, I think it’s really important that we are prepared to be open-minded about the different ways that we can support individuals to participate fully in the new economy.”


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Figuring it out: five issues emerging from the Scottish draft budget

The week before Christmas might not seem an ideal time to be mulling over the minutiae of economic forecasts and the implications of tax changes. But on Monday morning, the Fraser of Allander Institute (FAI) review of last week’s Scottish draft budget attracted a big turnout, and helped make sense of the numbers announced by Scotland’s Finance Secretary, Derek Mackay.

Here are some of the key issues to emerge from yesterday morning’s presentations.

  1. Growth: degrees of pessimism

Last month, the UK Office for Budget Responsibility revised downwards its growth forecast for the UK economy to less than 2%. The FAI, meanwhile, has forecast a slightly lower growth rate for the Scottish economy of between 1% and 1.5%. However, the independent Scottish Fiscal Commission (SFC) is much more pessimistic, forecasting growth in the Scottish economy of less than 1% up to 2021. If the SFC’s forecast turns out to be accurate, this would mean the longest run of growth below 1% in Scotland for 60 years.

Dr Graeme Roy, director of the FAI, suggested that the SFC’s gloomy outlook is based on the view that the Scottish working-age population is projected to decline over the next decade. In addition, the SFC also believes that the slowdown in productivity, which has been a blight on the Scottish economy since the 2008 financial crisis, will continue.

  1. Income tax rises: reality v perception

Mr Mackay proposed big changes in Scotland’s tax system, with five income tax bands stretching from 19p to 46p. While these measures attracted the biggest headlines for the budget, the FAI believes that most people will see little meaningful impact in their overall tax bill (relative to income). Charlotte Barbour, director of taxation at the Institute of Chartered Accountants of Scotland, also suggested that the tax changes are unlikely to result in any significant behavioural changes in the way people pay tax in Scotland. And, as has been noted elsewhere, high taxation does not necessarily lead to unsuccessful economies.

However, as the FAI highlighted, perception is important, and if Scotland comes to be seen as the most highly taxed part of the UK, this could have serious implications for business start-ups and inward investment.

  1. Taxation: two systems, multiple implications

Charlotte Barbour also highlighted some of the implications of the tax changes in Scotland that haven’t featured widely in press coverage. How the changes interact with areas such as Gift Aid, pensions, the married couple’s tax allowance, Universal Credit and tax credits will need careful examination in the coming weeks.

  1. Public spending: additional resources, but constrained settlements

The FAI’s David Eiser noted that Mr Mackay was able to meet his government’s commitments to maintain real terms spending on the police and provide £180m for the Attainment Fund. He also announced an additional £400m resource spending on the NHS. But these settlements are constrained in the context of the Scottish Government’s pay policy,

Mr Mackay’s plan offers public sector workers such as nurses, firefighters and teachers earning less than £30,000 pounds a year a 3% pay rise, and those earning more than that a 2% rise. For the NHS alone, this could cost as much as £170m.

In addition, analysis published yesterday by the Scottish Parliament Information Centre (SPICE) has estimated that, if local authorities were to match the Scottish Government’s pay policy, this would cost around £150m in 2018-19.

  1. The budget’s impact on poverty

If the growth forecasts are correct, even by 2022 real household incomes in Scotland will be below 2007 levels. Dr Jim McCormick, Associate Director Scotland to the Joseph Rowntree Foundation, looked at the Scottish budget in the context of poverty, and suggested that three principles need to be addressed before the budget can be finalised: there are opportunities both to increase participation by minority groups in employment and to improve progression in low-wage sectors, such as hospitality and retail; energy efficiency is one important way of lowering household bills and improving housing quality in the private rented sector; and options such as topping up child tax credits and more generous Council Tax rebates are better at reducing poverty than cutting income tax.

Finalising the budget

As all of the speakers noted, the Scottish draft budget is not a done deal. The minority Scottish National Party government in the Scottish Parliament needs the support of at least one other party to ensure its measures are adopted. The most likely partner is the Scottish Green Party, which has indicated that the budget cannot pass as it stands, but could support the government if an additional £150m is committed to local government.

It took until February this year before the Scottish Government’s 2016 draft budget could be passed. Time will tell whether a budget announced shortly before Christmas 2017 can finally be agreed before Valentine’s Day 2018.

The complete collection of slides presented at the Fraser of Allander Institute’s Scottish budget review are available to download here.


Our blog post on the Fraser of Allander Institute’s review of the Chancellor of the Exchequer’s 2017 Autumn Budget is available here.

Universal Credit – “forcing many into debt”

Jul 07 Dealing With Debt - Magnifying Glass

By Heather Cameron

“The biggest change ever made to the benefits system… is currently failing too many people and forcing many into debt.”

This is the conclusion of a new report from Citizens Advice on Universal Credit (UC). It warns that the roll-out should be paused to allow ‘significant problems’ to be fixed.

What is Universal Credit?

UC was introduced in 2013, with the aim of simplifying the benefits system, making transitions into work easier and making every hour of work pay. UC replaces six means-tested benefits and tax credits with one benefit, to be paid in arrears, as a single household payment, on a monthly basis.

The objective of UC is to help people on low incomes or not in work to meet their living costs. It affects a range of people, both employed and unemployed, disabled people with health conditions, single people, families, homeowners and renters.

Roll-out so far has been gradual but the process is to speed up considerably from October. By the end of roll-out in 2022, it is expected around 7.2 million households will receive UC, over half of which will be in work.

With such a significant number of people affected, it is imperative that the system works in their interests. But evidence from Citizens Advice suggests the system has a number of flaws that need addressing to prevent 7 million households from facing serious financial risk.

And this isn’t the first time similar conclusions have been reached.

Flaws

Back in February, a Guardian investigation found that policy design flaws in UC are pushing thousands of benefit claimants into debt. Former welfare minister Lord Freud also admitted to MPs that administrative problems and design issues with UC are causing around one in four low-income tenants to run up rent arrears, putting them at risk of eviction.

In 2016, an inquiry into UC and its implementation by the Public Accounts Committee highlighted the inflexibility of the payment systems which may cause financial hardship for some claimants.

Citizens Advice highlight three “significant problems” with UC:

  • people are waiting up to 12 weeks for their first payment without any income;
  • UC is too complicated and people are struggling to use it; and
  • people aren’t getting help when the system fails them.

The data shows that:

  • more than one in three people helped on UC by Citizens Advice are waiting more than six weeks to receive any income, with 11% waiting over 10 weeks;
  • nearly a third of people helped have to make more than 10 calls to the helpline to sort out their claim;
  • 40% of people helped said they were not aware they could get an advance payment to help with the initial waiting period for their first payment;
  • over half of the people helped borrowed money while waiting for their first payment; and
  • UC clients are nearly one-and-a-half times as likely to seek advice on debt issues as those on other benefits.

A recent report from the Joseph Rowntree Foundation similarly highlighted the issue of waiting time, arguing that it required immediate action.

While Citizens Advice support the principles of UC, it argues that pushing ahead with roll-out while these problems remain will only put thousands more families at financial risk.

Recommendations

In response to these findings, a number of short and longer term considerations were highlighted where action will be needed to help secure the aims of UC by the end of roll-out. These include reducing the six week wait for initial payment, improving the support available for those moving onto UC, and helping people achieve financial stability on UC.

The charity recommends that the roll-out is paused while the government addresses the significant issues that have been highlighted. If improvements are not made, it is argued that both UC claimants and the government will face significant financial risks, which will increase rapidly if thousands more households move onto the benefit later this year.


If you enjoyed reading this, you may also like our previous article on in-work poverty.

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Supporting markets to survive and thrive

For around a thousand years, the London Borough Market has existed in one form or another.  It has survived fire, flood, plague and war – and on the 3rd of June this year, a terrorist attack.  The market has since reopened, with traders determined to continue their work and serve the local community.

Although many markets are a historic part of their host towns and cities, they are far from being relics.  Indeed, in recent years markets have experienced something of a revival.  In London alone, since 2010, the number of street markets has grown from 162 to over 250.

There are clear reasons for this – markets offer consumers and traders a number of benefits, and they make significant contributions to the economic, social and political health of towns and cities.

Economic impact of markets

Indeed, in 2015, the Institute of Place Management (IPM) conducted a comprehensive review of the impact of markets and found that markets not only have a significant turnover, they also impact indirectly on the wider economy – meaning that the £3.5 billion turnover directly attributable to retail markets is actually worth around £10.5 billion to the UK economy.

The Portas review in 2011 hailed markets as a potential saviour of the high street.  Indeed, the IPM review supports this, reporting that markets can help to increase town centre footfall by up to 25%.  This has significant economic potential.  In London, market visitors spend around £752 million per annum in nearby shop-based retailers.

Markets were also found to:

  • act as a significant employer, both nationally and at the local level
  • support intergenerational economic mobility (through family-owned businesses)
  • support the development of entrepreneurial skills in young people through ‘youth markets’
  • act as business incubators and support business formation due to their low barriers to entry, for example, enabling migrants to set up their own businesses
  • enable small businesses to reach larger businesses whom they can supply, and support other local businesses, such as farmers.
  • encourage high street diversity and create a distinct ‘identity’ for high streets
  • promote high street resilience, as they are flexible and able to respond quickly to changing demands.
  • help to utilise vacant and underused spaces within high streets
  • attract tourists, who are drawn to them because they are “unique, quirky, unusual”

Wider benefits

Markets also have a number of social purposes.  They are important places of social interaction, which facilitate community cohesion and social inclusion.  Markets can also help to improve public health and quality of life through the provision of fresh, quality produce at lower price points, which may be particularly beneficial for low-income families.

From an environmental perspective, there are also a number of benefits arising from the sale and purchase of locally produced products, including reducing pollution associated with high ‘food miles’ and reducing the need for consumers to travel to out-of-town sites, such as large retail parks, in order to make their purchases.

Challenges

Although there is overwhelming evidence that almost every street, food and farmer’s market is an invaluable asset to its local community, markets still face a number of very real threats.  These include:

  • the rise of out-of-town shopping centres, the dominance of big supermarkets, and the popularity of online shopping
  • planning and regulatory regimes that do not allow for, or restrict, the expansion or establishment of markets
  • a lack of support for markets or poor management by local authorities
  • high land values making it difficult for markets to be established

As many markets are a lifeline for areas experiencing deprivation, it is important that they receive the support that they require to survive and flourish.

Promoting and supporting markets

So, what can be done to support markets?  Earlier this year, the Mayor of London, Sadiq Khan, announced plans to establish the London Markets Board – a team of experts tasked with delivering a London markets strategy, and work to preserve and promote London’s increasing number of markets.

On a wider scale, NABMA (National Association of British Market Authorities) and the National Market Traders Federation recently published a ‘five-year manifesto’, which made a number of recommendations for ways to support markets.

A key recommendation is that local authorities work to raise the profile of markets.  There are many market-focused national initiatives such as Love Your Local Market, the National Youth Market, and the Great British Market Awards, which local authorities can become involved in.

The Love Your Local Market campaign, for example, is an annual event, established in 2012, which brings together markets across the UK.  It aims to build affection and support for markets in local communities, and offers free or subsidised pitches to start-ups to test trading conditions.  In 2013, it increased footfall in participating town centres by 10%.

Other recommendations to support markets include:

  • greater recognition of the role of markets in local economies, jobs and growth, as well as in civic local society
  • ensuring that retail markets have a voice in policy making that affects them, including planning and town centre management
  • further lifting the current burden of business rates for SMEs
  • supporting greater awareness of the sector’s employment opportunities including apprenticeships, platforms for self-employment and training hubs
  • developing and supporting sector-led initiatives that aim to support entrepreneurship and increase the amount of businesses on markets, and support them digitally
  • encouraging schools and further education establishments to work with market operators to enable people entering the labour market to embrace markets as a possible career

There are some promising signs.  Around £90 million has been invested into improving markets since 2014, and an increasing number of local authorities are making them central to town centre plans and regeneration activity.

By promoting and supporting markets in this way, the economic, social and environmental benefits can be maximised. As the 2015 review of markets underlines: “markets are an important asset to a location, and their future cannot be left to chance.”

Is the record high employment rate masking the reality of in-work poverty?

wage-packetBy Heather Cameron

The employment rate may have hit a record high of 74.6%, with unemployment continuing to run at an 11-year low, but in-work poverty has also reached unprecedented levels.

More than half (55%) of people in poverty are living in working households, including millions of children, according to the latest Monitoring poverty and social exclusion (MPSE) report.

And new research for the Joseph Rowntree Foundation (JRF) published last week says four million more people are living below an adequate standard of living and ‘just managing’ at best.

Statistics

The findings of MPSE paint a bleak picture for a substantial share of the UK population. It notes that the proportion of the UK population living in poverty has barely changed since 2002/03, remaining at around 21%. And at 55%, those in poverty in working households has reached its highest level since the data set began in 1994/95.

Of this 55%, four fifths of the adults in these families are themselves working – a total of 3.8 million workers were living in poverty in 2014/15, an increase of around a million since 2004/05.

Female employees make up the single largest group within this group at 1.5 million, followed by male employees at 1.4 million. However, the majority of workers in in-work poverty are male (53%) as there were 620,000 male self-employed workers in poverty in 2014/15, while there were 250,000 female self-employed workers.

The story is different for workless households, however, as the proportion of people in poverty in these households has decreased, with the number in workless or retired families having fallen by half a million. Despite the significant increase in the number of people aged 65 and over, the figures show there are 400,000 fewer pensioners in poverty. There have also been reductions in the number of children in workless households.

While this is clearly encouraging, as the MPSE report suggests, it is difficult to categorise this as progress since there has been little change in the relative poverty measure overall.

Moreover, the new research from JRF warns that millions of just managing families are on the tipping point of falling into poverty as 30% of the population are living below the minimum income standard (MIS). In addition, 11 million people were found to be living far short of MIS, up from 9.1 million, who have incomes below 75% of the standard.

So what is causing these worrying statistics?

Contributory factors

The labour market has undoubtedly had some influence on these figures, with low wages and insecurity. Although average incomes have begun to rise, they are still below their peak. Male weekly earnings are still lower than 2005 levels and female weekly earnings, although now equal to 2005 levels, are still below what they were in 2010.  And with inflation expected to return, it has been suggested that hourly pay is unlikely to reach its pre-recession peak before 2020.

However, this is only part of the issue. There are also a number of other contributory factors, including:

  • increasing cost of living;
  • housing market failures; and
  • cuts in welfare benefits.

The increase in numbers living below an adequate standard of living has been driven by rising living costs while incomes stagnate. The price of a minimum ‘basket of goods’ has risen 27-30% since 2008, and average earnings by only half of this. The JRF analysis suggests the cost of living could be 10% higher by 2020, a period when much state support has been frozen.

Housing is also an important factor. It is often too expensive and of poor quality, particularly in the private rented sector. The MPSE findings show that the number of private renters in poverty has doubled over the last decade, with rent accounting for at least a third of income for more than 70% of private renters in poverty.

Households accepted as homeless and those in temporary accommodation have also increased and landlord evictions are close to a ten-year high.

Added to this, is the four-year freeze on benefits, tax credits and Universal Credit (UC), along with a reduction in the overall benefit cap. The benefit cap mainly affects households with children and will increase the number of families affected, from 20,000 to 112,000.

All this puts those on the lowest incomes at risk.

Way forward

Clearly, strong growth in the number of people in employment does not mean an end to employment-related disadvantage.

To help end poverty, the JRF has called on the government to make a number of changes, including:

  • reversing cuts to the amount people can earn before their benefits are reduced;
  • ending the freeze on working age benefits;
  • extending support to low wage sectors to reduce the productivity gap; and
  • investing in a living rents scheme to provide more affordable housing.

As the MPSE report concludes, “solutions for in-work poverty require more than just more work.”


If you enjoyed reading this, you may also like our previous articles on poverty.

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Eating or heating: tackling fuel poverty in the UK

nastural gas flame

It is a complete scandal that people die because they can’t afford to heat their homes. ‘I, Daniel Blake’ shows the tragic circumstances and daily dilemma of ‘heating or eating’ faced by many thousands of people in Britain today.”

Those were the words of I, Daniel Blake lead actor Dave Johns as he backed a report published in November 2016 by the charity National Energy Action. The report, which looked at the health problems related to fuel poverty, claimed that a child born today may never see fuel poverty eradicated from the UK unless more assistance is given struggling families.

Identifying the “fuel poor”

In England, according to the most recent official government statistics, more than 2.3 million (10%) households are living in fuel poverty. Leeds, Birmingham, Manchester, Liverpool and Cornwall are among the places worst affected. At risk groups include single parent households with dependent children, rural households, and those living in the private rented sector. Research also highlights that those customers who use prepay meters, which include a large proportion of the most vulnerable customers, are more likely to be “fuel poor” as they do not have the flexible tariff options and reduced rate deals which are offered to customers who pay via direct debit.

The picture is not much better elsewhere in the UK. A report produced by the Scottish Fuel Poverty Strategic Working Group estimated that there are currently over 800,000 households (35%) living in fuel poverty, with levels as high as 50% in rural areas. Meanwhile, in Wales the latest estimates suggest that 23% of households are currently living in fuel poverty.

heater gauge

Tackling the causes of fuel poverty

Not being able to afford to heat your home, or having to choose between eating or heating is the stark choice many families in the UK are being forced to make, however it is clear that fuel poverty stems from a number of different factors, including the cost of fuel, the price of energy, and rising energy consumption habits.

The latest Scottish Government strategy on tackling fuel poverty suggests that four drivers of fuel poverty need to be tackled before fuel poverty can be eradicated. These are:

  • Raising incomes  8 out of 10 households (in Scotland) in income poverty are also fuel poor.
  • Making energy costs affordable  in many cases the cost of fuel is rising faster than household incomes.
  • Improving energy performance in housing  people living in a home with low energy performance are 3.5 times as likely to be suffering from fuel poverty as those in a home with high energy performance.
  • Changing habits of energy use  adopting energy-saving behaviours can make a significant difference to fuel bills by reducing overall demand. There is also a need to better understand and increase use of “green energy”.

But what about energy suppliers?

In December 2016, a report from Turn2Us suggested  that two million households suffer from fuel poverty. Subsequently, the “big six” energy suppliers met at Westminster to discuss what they could do to help tackle fuel poverty. At the moment, there is no legal requirement for energy companies to take action to reduce fuel poverty. However, they are coming under increasing pressure to help tackle fuel poverty, by reflecting some of their profit margins in the rates they give to customers. The idea of automatically putting vulnerable or “at risk” customers onto the lowest fuel tariff was discussed. However the bulk of the discussion, according to reports, concentrated on how to increase awareness of existing options, including the government-led Warm Home Discount, individual support grants, the Cold Weather Payment, and practical support from suppliers themselves.warm fire

Practical strategies to tackle fuel poverty

A number of schemes have been developed to try to help tackle fuel poverty, with national roll outs being supplemented by more localised programmes often funded by local authorities or charities.

In November 2016 the Scottish Government pledged an extra £10m to be spent on tackling fuel poverty. £9m was allocated for councils and housing associations to make it easier for tenants to heat their homes. A further £1m is to be made available to provide interest free loans to help people make their homes more energy efficient.

Other schemes have also been introduced by local authorities to try and tackle fuel poverty, including Ready to Switch? Launched in November 2012, Peterborough City Council’s collective switching scheme uses the combined buying power of residents and businesses within the community to negotiate cheaper prices with energy companies. According to figures from Peterborough Council, to date, hundreds of households have switched to save on gas and electricity, with some reducing annual bills by nearly £150.

Boilers on prescription (BoP) is a new funding stream which is being tested in a number of local authority areas, including Sunderland. The fund is managed through NHS Clinical Commissioning Groups, and householders at risk of cold related illnesses are referred for heating upgrades via health professionals. One of the main ideas behind BoP is to reduce a resident’s need for NHS interventions by improving their thermal comfort at home. It is hoped that a warmer, healthier home could reduce the number of GP appointments or emergency admissions.

Energie

 

Altering the design of new homes and subsidising the retrofitting of older ones is also a key policy strategy for tackling fuel poverty. Providing homes which are designed or adapted to be energy efficient through improved insulation, the installation of solar panels or using appropriate lighting or heating systems will allow the government not only to reduce fuel poverty in the present, but should also reduce the likelihood of more people falling into fuel poverty in the future. Reducing the demand for energy by creating homes which use less of it may also help to drive down the cost of energy, resulting in even bigger savings. However, it is not just the responsibility of individual homeowners to carry out these improvements. Local authorities, housing associations and private landlords also need to (and have in many instances) recognise the vital role they play, particularly in relation to more vulnerable customers who are at increased risk of falling into fuel poverty. Retrofitting has been increasingly popular in other parts of Europe, as these case study examples show.

The issue of fuel poverty in the UK does not appear to be going anywhere fast. Despite the attempts of governments across the UK to reduce the figure, in many areas the number of people falling into fuel poverty continues to rise. While there are individual areas of good practice aiming to help some of the UK’s most vulnerable families to heat their homes, it is clear that a wider commitment to combat the underlying causes of fuel poverty is needed, along with a recognition that there is a responsibility across the board to provide help and information to families suffering as a result of fuel poverty.


If you found this article interesting, you may also like to read our blog on the Dutch Energiesprong model and our research briefing on retrofitting (member access only).

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Talking to children about poverty: why education needs to get in on the act

boy with bear

1 in 5 children in poverty

Scotland has one of the highest rates of child poverty in the UK. The latest figures from the Joseph Rowntree Foundation estimate that 1 in 5 children in Scotland live in poverty, with the figure rising to 1 in 3 in the urban centre of Glasgow. With more and more families falling into relative poverty and the numbers of working poor rising, the newly branded “JAMs” (just about managing) are, in some cases not managing, having to decide between heating their house or feeding their families.

People are affected by poverty in many different ways. For adults it can lower self-esteem, increase levels of stress, and can have consequences for mental and physical health. However, it’s sometimes forgotten that many children can feel these same effects from growing up in a family living in poverty.

In the same way as adults, many children suffer from low self-esteem and feel the invisible burden of the stigma that the label of “poverty” places on them. In addition, children affected by poverty:

  • are more likely to be victims of bullying;
  • tend to have lower attainment at school;
  • have fewer social networks or groups of friends;
  • suffer from poorer physical and mental health;
  • have less chance of leaving school with a full set of qualifications and going on to further or higher education (despite the best efforts of various governments to change this); and
  • are more likely than “affluent children” to spend their adulthood in poverty too.

How children understand poverty

Many children have an understanding of poverty as meaning “poor” or lacking in money. Concepts such as heating a home, building personal debt or not being able to afford to travel to work are not things they yet associate as being part of the cost of living, despite many of them seeing their own parents face these struggles on a weekly basis.

They associate poverty with foreign, particularly third world nations, as well as with homelessness, loneliness, a lack of familial support and a reliance on donations. Many children, even from the poorest backgrounds do not recognise themselves as being in poverty. This is something highlighted in research conducted by the Scottish Universities Insight Institute (SUII), which looked at child perceptions of poverty, and expressing these through alternate methods such as art.

In the study, children from schools in less affluent areas of Glasgow and Aberdeen were surveyed and many regarded notions of poverty as a distant, “third world” concept. However, when they were engaged in more creative methods, such as drama, or art, expressions of their experiences of poverty became more acute.

School children raising hands. View from behind.

Engaging education professionals in the poverty discourse

In Scotland, the overarching framework of Getting it Right for Every Child (GIRFEC) is designed to bring services and professionals with whom children come into contact closer together to create a complete model of care for a child. It is interesting that in the latest commitment to tackling child poverty in Scotland there is no commitment to including teachers or education in general, in the same way as health professionals or social workers.

We know that poverty can have an adverse impact on wellbeing and on learning, and that children who live in poverty are more likely to be absent from school. However, education professionals are largely excluded from the discussions which child welfare officers, social workers, doctors and third sector colleagues are already having around the health and wellbeing of children who are living in poverty.

In a practical sense schools do, to a degree, already engage in reducing the impact of child poverty by providing financial and practical help. This could include subsidies for school meals or trips, the donation of free uniforms, breakfast clubs and tutoring after school classes. There have even been cases of individual teachers giving children clean clothes, meals or allowing them to sleep in the staff room at break and lunchtimes to allow them to catch up on sleep lost because of a disruptive lifestyle at home. However, talking about poverty with children is often neglected. This is something that academics are keen to see schools do more of – use their position to engage children in talking about poverty in order to help identify children at risk, but also to help raise the issue with other children who may not have experienced it or know what it is.

Using creative methods in schools to talk about poverty

Many academics argue that statistics on attainment can be misleading – while poverty has a significant impact, it does not correlate directly to cognitive ability. As one researcher at a seminar suggested, “just because you were born poor does not mean you were born without the ability to learn”. While there is evidence to suggest the slower development of children who live in poverty is acute in the early years, there is also evidence that the attainment gap is closing – what children in poverty miss out on is opportunity, variation and experience, and a chance to develop, rather than having lower overall cognitive function. This is one of the reasons, academics argue, it is so vital to engage teachers in wider discussions on child poverty.

For example, the vocabulary of children in poverty is often smaller in range than that of their more affluent peers. But, rather than this being the result of reduced cognitive function, researchers have found that this is primarily because they have not had the need to learn new words. Unlike children from more affluent backgrounds, they tend to remain within their community unit, using more colloquial language and a more limited number of words; they also often have less access to books or exposure to cultural experiences. That is not to say that they could not learn or have learnt all of the words that a child from a more affluent area knows; it’s just that they have not had the need or the opportunity to learn them yet. With this in mind, alternative methods of communication such as art, dance and storytelling could prove useful in explaining poverty to children, and helping them to discuss their experiences and understanding of what it means to be in poverty.

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Using creative ways of communicating and engaging with children has already been found useful in helping them to talk about other issues personal to them, such as trauma or abuse. Researchers from the Scottish University Insight Institute-funded research team employed similar methods, using art, drama and play to help children express their feelings on poverty, and how it could be tackled in their communities. Children acted out scenarios, wrote poems, and created a number of pieces of tactile artwork, including sculptures and drawings. It was thought that these same methods could be used by teachers as a way to allow children to communicate their feelings about poverty and express issues relating to their own personal experiences without feeling stigmatised or singled out by other members of the class.

It is clear that the education profession has an important role, not only in helping to alleviate the effects of poverty on children through schemes like breakfast clubs, but also in a teaching and learning role. Many teachers and schools are averse to raise issues of money or poverty with children for fear of placing unnecessary distress onto children. However, sensitive and context-aware teaching on the issues around poverty should be seen as an opportunity, not a burden to teachers.

Effective discussion could go a long way to helping children to open up about experiences of poverty and also help them to be more understanding of other children who are living in poverty, reducing stigma and encouraging positive action within their local communities.


This blog reflects on research from the Scottish Universities Insight Institute and seminar participation at the Centre for Child Well-being and Protection at the University of Stirling.

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Mobilising healthy communities: Bromley by Bow Health Partnership

Ian Jackson of the Bromley by Bow Health Partnership was the guest speaker at the first Glasgow Centre for Population Health (GCPH) seminar series of the year.

The Bromley by Bow Health Partnership (BBBHP) is a collaboration between three health centres and other non-primary care partners in the Tower Hamlets area of London. The aim of the partnership and the new primary care delivery model which comes with it is to transform the relationship between the public and primary health care. This means considering the wider determinants of health when the partners plan and deliver care, rather than treating healthcare in a purely biomedical way.

Edited image by Rebecca Jackson. Map via Google Earth

Edited image by Rebecca Jackson map via Google Earth

Effect of social determinants on health

In the 1890s Charles Booth created a map of London which categorized areas of the city of London depending on their levels of deprivation. The most recent Indices of Multiple Deprivation Report showed that those same areas considered deprived in the1890s are still facing the highest levels of multiple social deprivation and health inequality today. It is no secret that disadvantage has a negative impact on people’s ability to make the best choices when it comes to health. And disadvantage at a social level can have a significant influence on poor physical and mental health across a range of conditions.

More recent research conducted by Michael Marmot looked more closely at what determines health outcomes in populations, and the extent to which other factors influence people’s health, or rather their ability to be well.

He produced what is known as the 30/70 model: 30% of what determines your health is your genetics and improvements in pharmacology, the other 70% is related to other “external factors” including poverty, environment, culture, employment and housing. BBBHP has used this as the foundation for their primary care model, arguing that primary care providers are not just dispensers of medical products, but have a responsibility to contribute to people living healthier lives in their community.homeless

Social prescribing

One issue highlighted by the BBBHP was the significant number of people presenting at GP surgeries with “non-medical” ailments, or medical ailments triggered by “non-medical stimulus”. People were arriving at the practices and booking appointments because they were lonely and it gave them somewhere to go. Others were presenting with symptoms of depression, which on further investigation were found to have stemmed from issues around debt or domestic violence. A social prescribing service was set up by the partnership to try to tackle some of these non-medical conditions and improve the health of the general population by non-pharmacological means.

The social prescribing service, where GPs refer people to other local services for help, can be used as a replacement for pharmaceutical interventions, or be supplementary to them. GPs, or other primary care staff, may refer any adults over the age of 18 to one of over 40 partnership organisations. These range from walking groups to formal sessions with advisors in debt or domestic violence agencies, as well as art classes, community gardens and companionship services to combat loneliness. The organisations can provide help and advice on issues such as employment and training, emotional well being and mental health.Ölfarbe

The challenges of quality and funding

Maintaining quality in the provision of social prescribing is a particular challenge for BBBHP. They work regularly with trusted partners, particularly the Bromley by Bow Centre. However, there is no consistent quality check for many of the services from the health partners themselves. Evaluative studies and feedback sessions are used to assess quality and impact, and consider the scale of demand. And while it is acknowledged that more formal frameworks for assessing quality and impact of social prescribing services are preferred in formal assessments, in reality, word of mouth, participant feedback and uptake rates are used as a standard for quality as much as official feedback in a localised community setting.

A second issue is funding. BBBHP identified that finding long term funding was their main issue in providing security for providers and service users, as well as for GPs referring to services. Funding is vital not only to ensure the survival of the community groups who provide some of the referred services, but also to allow them to develop longer term partnerships and build capacity within the social prescribing service. The BBBHP works closely with the Bromley by Bow Centre, a key provider of support services for the local community, but like many services which rely on funding, they increasingly have to plan for tighter budgets.

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A final challenge for the staff at BBBHP was changing people’s expectations of primary care, and what it means to live well. Some patients were suspicious and reluctant to be recipients of “social prescription”, as this did not fit with the traditional expectation of what GPs should do to make people well. This can be a big change in mindset for some people, according to Ian Jackson, when people come expecting to be prescribed antidepressants but are instead “prescribed” a walking club or a debt advice service. He noted that the reaction from patients can sometimes be confused or hostile, and some patients do not even turn up for referrals.

Improving patients’ understanding of the benefits of social prescription, ensuring people attend referral appointments, and that social prescriptions have a long term impact is something which BBBHP are hoping to research further. They feel that looking at the long term impact of non-pharmaceutical interventions and how these feed back into the wider agenda of tackling inequalities is important to allow the partnership to continue to build healthy communities and save on primary care costs in the long term.

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Creating positive social connections to improve community health

Social prescribing and other associated projects have sparked new social connections. Members of the community have come together to form their own support groups. The Children’s Eczema support group run by local GPs and the DIY health scheme, which sought to educate and support parents who were anxious about minor ailments in children, have helped parents in the area to set up WhatsApp groups, organise coffee mornings and go to one another for support. Such initiatives are regarded by BBBHP as important in tackling wider, systemic social inequality in the area.

Currently, primary health care in communities is focused on illness. This needs to change, according to BBBHP, with local community-based health delivery based as much around social health as biomedical issues. Through its social prescribing and other services BBBHP has aimed to focus on supporting people in a holistic way, tackling health inequalities as well as biomedical illness, to allow them to make good choices to improve their health.


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Local poverty, national wealth: reflections from the annual SURF conference

The annual SURF conference took place in Edinburgh on the 1st September 2016. The theme for this year’s conference was Local poverty, national wealth: resourcing regeneration. Delegates came from a range of organisations across Scotland, including local authorities, the Scottish Federation of Housing Associations, COSLA, Creative Scotland, Skills Development Scotland and Transport Scotland. Speakers on the day included director of the Common Weal, Robin McAlpine, Minister for Local Government and Housing, Kevin Stewart MSP, Fiona Duncan from Lloyds TSB Foundation Scotland and Sandra Marshall coordinator and community activist from Leith Hub.

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Image by Rebecca Jackson

Building resilient and equal communities through regeneration

The conference focused on connecting policy, practice and people within communities to promote effective regeneration of spaces to reduce inequality. One of the recurring themes of discussion throughout the day was the localisation of power and services, allowing local communities the ability to plan and decide the best way to regenerate their local area. Other general themes discussed during the day included finance, infrastructure to facilitate regeneration at a local level, and how to create a network of support and integrate professional knowledge to support community regeneration plans. Revisiting a theme from last year’s conference, cooperation with communities rather than imposition of regeneration, formed the backbone of discussion for the day.

Image by Rebecca Jackson

Image by Rebecca Jackson

Economic planning is key to reducing inequality and promoting regeneration

The first session of the day focussed on the policy and economic context around regeneration and reducing inequality. It was suggested in the opening remarks that there needs to be effective development and investment where people live- that poverty and inequality lead to degeneration, and that both must be tackled in order to facilitate effective regeneration of an area. In a way the two are not mutually exclusive: regeneration can help to alleviate poverty and inequality, but in order for regeneration to be as effective as possible, poverty and inequality should be eradicated as far as possible.

As well as this abstract macroeconomic debate delegates and panellists discussed locality based funding, including cooperatives. Panellists suggested that in Scotland the problem is not a lack of money, but a lack of effective distribution of resources. They also discussed how to reduce the gap between the lived experience of communities and what politicians think lived experience is. These insights were put into poignant context by panellist Sandra Marshall, who discussed her own personal struggles, and those of others she has helped in her community of Muirhouse in Edinburgh.

Tackling inequality is high on the agenda of the current Scottish Government, something which was emphasised during the panel session by Kevin Stewart MSP. Working at a community level and having the power to do so was also something which was highlighted as being vital to helping communities affect change through regeneration. Kevin Stewart highlighted the proposed decentralisation bill currently being discussed within the Scottish Parliament, which aims to give greater power to local communities to effect their own change.

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Resourcing regeneration: the view from funders

There was a general consensus that funding is one of the key enablers, but also one of the biggest barriers to those who want to carry out community regeneration. The ease of access to funders and the ability to identify and engage with them was seen as a big barrier. Longevity of funding was also raised, with most funders donating grants for 3-5 years, despite acknowledging that many projects take longer to come to fruition. The second session of the day invited funders from major Scottish regeneration funding bodies: the Big Lottery Fund, Heritage Lottery Fund, Highlands and Islands Enterprise, Resilient Scotland, and the Scottish Government to present themselves and their funding options to delegates. Panellists were able to highlight their major funding schemes, how to apply and allow people the opportunity to chat directly with funders. The panellists also took part in a “funding cafe” exhibition which saw representatives from 20 of the major funding bodies in Scotland host stalls and interact with delegates.

Making connections and sharing learning

During the afternoon session delegates were able to hear about the lessons from SURF’s Alliance for Action collaboration projects. The projects in Govan, Kirkcaldy, Rothesay and Dunoon highlight the work done by SURF and their partners in using regeneration to promote community cohesion and reduce inequality. Discussions focussed on the projects themselves, how they were implemented, the challenges, barriers and differences in each of the projects, particularly in relation to scale, and the impacts and outcomes they produced. They also discussed how the models used in each of the projects are sustainable and transferable, and considered the role of SURF as the intermediary body through which policy and practice can be merged to the benefit of communities.

Community concept word cloud background

Community concept word cloud background

A bold new vision for regeneration in Scotland

The final session of the day put forward some suggestions for the future of regeneration, in particular using regeneration as a tool to reduce inequality within Scotland’s communities. Panellists discussed alternative and innovative funding methods, including co-operative and community ownership models, the decentralisation of power to help improve community decision making and the importance of addressing systematic and structural themes which underpin inequality within our communities and hinders the process of regeneration.

The conference was a day filled with interesting and unique insights into the regeneration agenda and the impact it can have on reducing inequality within communities. It also provided a platform for discussion about the future potential for regeneration projects within communities. Speakers and delegates came from a variety of policy, practice and community backgrounds, which resulted in a wide ranging and thorough discussion about many different aspects of the regeneration agenda within Scotland.


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Fairness Commissions: tackling poverty and inequality in the UK

by Stacey Dingwall

Next month, Brighton and Hove will become the latest council area to publish the report of its Fairness Commission. Established in 2015, Brighton and Hove’s is one of 24 Fairness Commissions set up in the last five years across the UK, in areas ranging from Dundee to Plymouth.

What are Fairness Commissions?

Fairness Commissions began to come together in 2010, in the wake of rising inequality in the UK. Inspired by the publication of The Spirit Level: Why More Equal Societies Almost Always Do Better by Kate Pickett and Richard Wilkinson (the founders of The Equality Trust), local authorities came together with academics, trade unions, and third and private sector partners to draw  up recommendations for ways of tackling inequality and poverty in their local area.

Similar to a parliamentary select committee, Commissions begin their work by gathering evidence from the public, which is then analysed and synthesised into a final report containing recommendations to the local authority. Typically, this process lasts for a year.

In their report on Fairness Commissions published in July 2015, the New Economics Foundation outlined the typical stages of holding a commission:

  • Scope: decide what and whom you are targeting with the commission.
  • Language: decide what to call the commission and define its purpose.
  • Resource: decide on a proportionate budget and allocation of staff time.
  • Leadership: invite commissioners to participate and appoint chairs.
  • Communication: start talking about the commission locally and invite people to participate.
  • Participation: gather evidence and solutions through a range of methods.
  • Analysis: develop recommendations based on the evidence and possible solutions.
  • Recommendations: make recommendations for change to the relevant organisations.
  • Implementation: put the recommendations into action.
  • Evaluation: monitor progress, measure change, and report on it.

Fairness in London – the Tower Hamlets story

Two key reports have been published by Commissions in London: one by the pan-city London Fairness Commission and another by the Tower Hamlets Fairness Commission. Inequality between the East and West of the City dates back to Victorian times and while Tower Hamlets has seen some improvements, most notably due to investment in education, this gap still persists. Although home to the global financial hub Canary Wharf, a major contributor to the borough’s £6 billion a year economy, 49% of Tower Hamlets’ residents live in poverty – the highest proportion in the entire country. Despite ever increasing house prices and rents in London – an average income of £75,000 was required to privately rent in the borough in 2012 – a fifth of its residents earn under £15,000 a year.

These figures, alongside evidence of stark health inequalities and the impact of welfare reform, formed the basis of the Fairness Commission’s inquiry in 2012-13. Speaking to residents, the Commissioners found a distrust of the big business that now dominates the borough, partly due its perceived contribution to the gentrification of the area. Residents whose families had lived in Tower Hamlets for generations spoke of feeling like they existed in a “parallel world” and that opportunities in the borough were inaccessible to them. The Commission’s final report made a total of 16 recommendations, for local and national government and the third sector, aimed at bringing the local community back together and making Tower Hamlets a fairer place to live.

Fairness and inequality – the political agenda

The London Fairness Commission was one of the organisations who made recommendations to the new Mayor of London ahead of his election on the 5th of May. In a poll conducted one week prior to polling, the Commission found that three out of four respondents believed that the income gap between those on the highest incomes and those on the lowest incomes had increased over the last five years, and that the majority would welcome the introduction of an annual London Fairness Index to test whether the city is a fair one in which to live.

The Index was one of the key recommendations in the Commission’s final report, which described the city as a ‘ticking time bomb’. Housing, transport and childcare were identified as the three biggest issues facing London, and the Commission made a number of recommendations on how to address these, including:

  • a binding London minimum wage of £9.70 per hour;
  • setting ‘affordable rents’ at 30% of household income rather than 80% of market rent; and
  • suspending the right to buy scheme for five years while supply is increased.

Reducing inequalities was also a key feature of the Scottish Parliament elections, with First Minister Nicola Sturgeon pledging that the SNP would “use every power” to tackle poverty and inequality in the country. Sturgeon also detailed plans to implement the recommendations of the Independent Advisor on Poverty and Inequality, publish a Fairer Scotland Action Plan, and reintroduce the socioeconomic duty for public bodies to consider the impact that their decisions will have on narrowing inequalities.

With the UK government committed to continuing their austerity programme, and persistent evidence that the UK is one of the least equal of the world’s developed countries, it’s clear that reducing inequality and striving for fairness will, and must, remain high on the political agenda for the foreseeable future.


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