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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Planning for an ageing population: designing age-friendly environments

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In the UK, increased life expectancy means that people can expect to live longer than ever before.  While this is clearly good news – and has a number of potential economic benefits – the shift in demographic structure towards an increasingly elderly population has a number of significant implications.

Following Wednesday’s blog post on the implications for planning of the ageing society, today we highlight some of the ways in which planners can help support the creation of age-friendly environments by influencing the design of the urban environment, transport, housing and the wider community and neighbourhood.

The importance of an age-friendly environment

Age-friendly environments are underpinned by three key factors:

  • Safety
  • Accessibility
  • Mobility

Such environments impact positively upon the quality of life of older people by enabling and encouraging physical activity and social connection.  This in turn has a beneficial impact upon their physical and mental health, and helps to tackle social exclusion – which can be a particular problem among older people.

Conversely, as the World Health Organisation (WHO) notes, poor design can have a negative impact:

“older people who live in an unsafe environment or areas with multiple physical barriers are less likely to get out and therefore more prone to isolation, depression, reduced fitness and increased mobility problems”

Creating an age-friendly environment

There are a number of areas in which planners may have an influence on the provision of age friendly environments:

  • the design of the urban environment
  • supporting appropriate transport options
  • the provision of age-appropriate housing
  • adequate neighbourhood and community facilities

Urban environment

In terms of the urban environment, green spaces are an integral aspect of age friendly environments.  Access to green spaces supports the physical activity of older people, makes a positive contribution to their health and wellbeing, and provides opportunities for social interaction.

Research has found that green spaces that are poorly maintained, perceived as unsafe, or contain potential hazards resulting from the shared use of parks and walkways are less likely to be used by older people.  Suggestions for improvement include the creation of small, quieter, contained green spaces and improved park maintenance.

Paths, streets and pedestrian areas are also a key planning consideration. Older people have greater reliance on pedestrian travel and are more likely to be physically active in areas that are pedestrian friendly.  The perception of safety also influences use – therefore, lighting and road safety measures can help to enhance this.

Adequate public toilet provision will also become an increasingly important issue.  Recent cutbacks have resulted in many public toilets being closed – in their review of public toilet provision in the UK Help the Aged noted that provision was sporadic. They found that the majority of older people had experienced difficulties in finding a public toilet, and even when toilets were found, they were often closed.

Transport needs

Responding to the transport needs of different groups will also present a key challenge. For example, an analysis of major European cities  by the Arup engineering consultancy found that older people typically make fewer journeys, use private cars less, public transport more (trams and buses in particular) and walk more.  In addition to this, older people’s typical walking speed – as well as the average length of walking trips – were lower than younger people’s patterns.  These differences must be considered when designing age-friendly environments.

The growing population of older people in rural and semi-rural areas, and the reliance on cars in areas with limited public transport options were also identified by Arup as important issues.

Age-appropriate housing

There will be increased demand for age-appropriate housing that meets the needs of older people as the population ages. People are likely to have longer periods of retirement and possibly longer periods of ill-health. As noted by the Future of an Ageing Population Project, unsuitable housing can damage individual wellbeing and increase costs for the NHS.

In order to meet demand, it will be necessary to both adapt existing housing stock, as well as ensure that new housing can adapt to people’s changing needs as they age.  Age-appropriate housing that supports independent living can reduce demand on health and care services, and positively enhance the lives of older people.

Thinking ‘beyond the building’

There is also a need to think ‘beyond the building’. It is thought that interventions that improve homes are likely to be less effective without similar improvements in the neighbourhood.  The ability to socialise and to access services is considered to be particularly important.

Therefore, planning for the provision of local shops and other community facilities such as GP surgeries, post offices and libraries, in tandem with an increased focus on walkable neighbourhoods and public transport provision, will help older people to be physically active and more independent.

Raising awareness

Despite a pressing need for action, the provision of age friendly infrastructure in the UK has been constrained by a lack of resources, and assigned a relatively low priority.  However, there is growing recognition of the need to raise awareness of the potential effects of the ageing population and its implications for the design of cities, towns and villages across the UK.

Planning departments cannot address these implications in isolation.  However, for their part, knowing and understanding the potential implications of the UK’s ageing population is a positive step towards the creation of a successful age-friendly built environment.


For further information, you may be interested in our other blog posts on the creation of age-friendly towns and cities and the economic opportunities presented by an ageing society.

We have also published two members-only briefings on Ageing, transport and mobility and Meeting the housing needs of older people.

Planning for an ageing population: some key considerations

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On average, the UK’s population is becoming older and living longer, healthier lives.  This is due to historically low fertility rates and reduced mortality rates.  Between 2014 and 2039, the government predicts that over 70% of UK population growth will be in the over 60 age group. Although this trend is partially countered by migration, by 2037 there will be 1.42 million more households headed by someone aged 85 or over.

The implications of population ageing for society are so complex and far reaching that they are impossible to fully predict. However, a key priority is the provision of age-friendly environments.  This is where local government, and planning departments in particular, have a crucial role to play.

In this blog post – the first of two on the implications of population ageing for planning – we highlight some key areas for consideration.

Some areas will be more affected than others

While headline-grabbing statistics paint a very clear picture of the significant growth in the number of older people that is predicted, often they obscure the subtleties of the way in which population ageing will occur across the UK.

In reality, it is likely that population ageing will not occur equally in all areas of the UK.  The degree to which some local authorities – and therefore planning departments – will be affected varies considerably.

The impact of population ageing is measured by a ‘dependency ratio’ – the number of people aged over 65 for every person between 16 and 64.

Recent research has found that coastal localities are likely to have higher dependency ratios than urban areas.  Urban areas will, however, experience a larger overall number of older people.

Dependency ratios will vary considerably between local authorities.  On average, it is predicted that by 2036, there will be over four people aged over 65 for every 10 people aged between 16-64.  However, local figures are likely to vary – from just over 1 in 10 in Tower Hamlets, up to 8 in 10 in West Somerset.

You can see how your own area is likely to change in an interactive map created as part of the Future of an Ageing Population Project.

Differences between the ‘young old’ and ‘older old’

And while there is awareness of the growth in the overall numbers of ‘older people’, another complexity is that ‘older people’ are not a homogenous group. 

As life expectancy increases, the differences between different age groups become more significant.  For example, there are variations in the needs, tastes and lifestyles between the ‘older old’, i.e. those aged over 80, and the ‘young old’ who are just approaching retirement age.

Some planning departments are already taking this into consideration.  Northumberland County Council – who have a higher than average number of older people within their population – use a three phase definition as part of their strategy to prepare for the ageing population. They categorise ‘older people’ into three distinct groups: older workers; ‘third agers’; and older people in need of care.

Understanding social impact and interpretation

The physical environment is commonly understood to be a ‘societal context’ in which ageing occurs.  This is reflected in the term ‘physical-social environment’ – it suggests that there is no physical environment without social interpretation.

However, recent research has found that while planners were reasonably aware of the physical needs of older people, they were less aware of the social and economic contexts of older people’s lives.  This included the links between wellbeing and attractive environments, green space, activity and health, and the positive impact of place attractiveness on social interaction.

Related to this, older people’s social interpretation of the built environment – including the importance of place meanings, memories and attachments ­– is likely to become an increasingly important consideration for planners.  As too is the potential effect of redevelopment on older people – which may include feelings of insecurity and alienation, disorientation, loss of independence, and social exclusion.

Involving older people in the planning system

How to effectively involve older people in the planning system in an increasingly technology-dependent age will pose a number of challenges.

Planners will need to think creatively about options for engagement.  Increasingly, social media platforms and other online media have been used to engage with users.  However, these technologies may not be readily accessible or easily used by older people due to a lack of technological skills or access to the internet.

Older people may also need certain adaptations to support them to become involved – either online or in person – if they have physical or other disabilities.

Negative assumptions about technology’s usefulness held by some older people may need to be challenged or worked around.

Supporting healthy and happy lives

There is no way to fully predict the impact that population ageing will have across all sections of society.  Developing our understanding of the way in which the built environment can help to support and enable older people to live happy and healthy lives – and the implications of this for planning towns and cities across the UK – is increasingly important.

In our next blog post we will look at some of the ways in which planners can help support the creation of age-friendly environments through their influence on the design of the urban environment, transport, housing and the wider community and neighbourhood.


For further information, you may be interested in our other blog posts on the creation of age-friendly towns and cities and the economic opportunities presented by an ageing society.

Out of sight, out of mind? Britain’s hidden homeless

“It was one mate’s floor one night, another mate’s sofa the next night. There’s so much pressure not to let people know how bad your situation is, but deep down, you’re absolutely falling apart.”

In February, the latest Homelessness Monitor was published by the Joseph Rowntree Foundation (JRF) and the homelessness charity Crisis. Official estimates of rough sleeper numbers in England in 2013 were reported to have reached 2,414, a 37% rise since 2010.

But the authors suggested that the true figure could be at least four times that number because of a category of homeless people who rarely make it into the official statistics. These are the ‘hidden homeless’: people living in bed-and-breakfasts, in overcrowded squats, and hostels, on the floors and sofas of friends and family, and sometimes sleeping rough in the unlikeliest of locations. Often, they fall short of getting help from their local authority because they have been assessed as intentionally homeless, or they are not considered as priorities.

The problem is not a new one. But the Homelessness Monitor also indicated that today’s hidden homeless includes higher numbers of families, single and separated people, women and young people.

Any one of us could find ourselves in this position. It might take a breakdown in mental health, or the sudden impact of a job loss, a broken relationship, a rise in rent. In addition, changes to government housing benefit rules have meant people under-occupying accommodation are seeking smaller homes, substantially reducing the availability of one-bedroom social rented accommodation for single homeless people.

In 2012, a Department for Communities and Local Government evidence review of the costs of homelessness in England had difficulty in pinning down a definitive account of the financial costs to the government, or the opportunity costs to the rest of society. However, it did highlight the £345m spent by English local authorities on homelessness in 2010-11. Even though the hidden homeless may not be appearing on official figures, local councils are still providing tens of thousands of people with related support services, such as debt advice and family mediation.

The human costs of hidden homelessness are easier to identify. A ComRes poll last year found that one in five UK 16-25 year-olds had to stay with friends or extended family on floors or sofas in the previous twelve months because they had nowhere else to go.  Some were made homeless after they were evicted, others because of family relationship breakdown, and one in ten was forced to leave home due to domestic violence. Their chances of finding work, or sustaining their education will be greatly reduced.

Tackling the problem of hidden homelessness goes to the heart of a wider issue: the shortage of affordable housing. But it also means addressing the difficulties that can drive people from their homes.

Launching a 2014 report into homelessness among women, Alexia Murphy, head of the St Mungo’s women project, suggested that preventative solutions are achievable:

“An ‘easy win’ is to build better bridges between GPs and social services. Before women become homeless, they are often presenting to health professionals with headaches, depression and stress – but the root cause here is usually social.”

However, the problem also needs resources, and although there are government initiatives and support services to tackle homelessness among vulnerable people, housing campaigners believe more should be done.

In 2004, Shelter published a report highlighting the plight of the hidden homeless, and proposed 17 solutions to the problem. Ten years later, another report, from IPPR North , indicated that things were no better:

“Homeless households living in unsupported temporary accommodation represent a hidden social problem. It is absent from official statistics, and the acute and complex problems associated with such households are left unrecorded. This cannot continue”

Meanwhile, the voices of the hidden homeless, such as the one which opened this blog post are still struggling to be heard.

“If you’ve got nowhere to call home you’re always uncomfortable, always unsettled, you’re not safe.”


The Idox Information Service can give you access to a wealth of further information on housing policy issues. To find out more on how to become a member, contact us.

Further recent reading*

Addressing complex needs: improving services for vulnerable homeless people

Search for a home (homelessness in England)

Getting the house in order: keeping homeless older teenagers safe

Not home: the lives of hidden homeless households in unsupported temporary accommodation in England

Homelessness in Scotland 2014: getting behind the statistics

*Some resources may only be available to members of the Idox Information Service