Skip to content

Monitoring Poverty and Social Exclusion

February 15, 2017

mpaseThe Joseph Rowntree Foundation has published this report which brings together the most recent data on poverty in the UK. It is written by the New Policy Institute. Some of its key points include:

1) In 2014/15, there were 13.5 million people living in low-income households, 21% of the UK population. This proportion has barely changed since 2002/03.

2) The number of private renters in poverty has doubled over the last decade. There are now as many private renters in poverty as social renters. Rent accounts for at least a third of income for more than 70% of private renters in poverty.

3) The number of households accepted as homeless and the number of households in temporary accommodation have both increased for five years in a row. Evictions by landlords are near a ten-year high.

4) The proportion of working-age adults in employment is at a record high. Full-time employees account for 62% of the growth in jobs since 2010. The proportion of young adults who are unemployed is the lowest since 2005.

5) The number of people in poverty in a working family is 55% – a record high. Four-fifths of the adults in these families are themselves working, some 3.8 million workers. Those adults that are not working are predominantly looking after children.

6) 1.4 million children are in long-term workless households, down 280,000 in four years. Excluding lone parent families with a child under five, 55% of these children have a disabled adult in their household. Once account is taken of the higher costs faced by those who are disabled, half of people living in poverty are either themselves disabled or are living with a disabled person in their household.

Quotations:

The report uses official data from a range of sources to look at trends and patterns across different indicators. Different indicators reveal different patterns, allowing us to get a better understanding of the contemporary nature of poverty and exclusion. This year’s key themes are money, work, benefits, services and housing.

So what can we say about the Coalition’s record on incomes, jobs, pay, homelessness and education? Inevitably, the record contains good and bad, but the divisions between those indicators which have improved and those which have not is instructive. The table below summarises the changes over both the last five years and the last ten.

Much of the ‘good’ is found in the employment chapter. Unemployment has fallen

markedly over the last five years from 2.5 million to 1.8 million even if it is not quite back to the level of the mid-2000s. This is true for young adults as well as older adults, and true for long- and short-term unemployment. Household worklessness is now the lowest on record – only 16 per cent of working-age households have no working adult.

The services chapter shows some progress in health, but in education the same inequalities that we have been reporting on for years persist. Children receiving free school meals are still less likely to get five good GCSEs than others – the gap remains at 27 percentage points. The gap between boys and girls persists, and the gap is greatest between poorer boys and poorer girls. The health indicators, though slow moving, do show closing inequalities in life expectancy between men and women and between men in more deprived areas and average areas.

As well as outcomes, the chapter also covers provision of services, focusing on the key areas of legal aid and social care. Cuts to legal aid mean that the number of people receiving help for welfare and housing issues has plummeted in the last couple of years.

The number of over 65s receiving help to live at home is falling, while resources are focused on more concentrated and intensive packages of care for those in greatest need. The most obvious examples of indicators moving in the wrong direction are in the housing chapter, particularly those relating to homelessness. Over the last five years, the number of rented households in England and Wales who were evicted has more than trebled, and now stands at 18,000. The number of households placed in temporary accommodation has risen by a quarter, to 64,000. Of these, 17,000 were placed outside their original local authority area, more than double the number five years previously.

Pulling this together, a picture emerges about the changes of the last five years. The average person in the UK saw their incomes fall a little during the recession and the recovery. If they owned a home, the fall will have been cushioned by low interest rates.

Most of those in work avoided unemployment, even if their pay barely rose. Over a longer period, ten years rather than five, they are probably slightly better off. At the lower end of the income spectrum, the number of people living in poverty has not really grown, but their material circumstances may well be worse now, as their incomes have not kept up with rising costs. Moreover, low-income families now have less money to fall back on in the form of savings. The mix of people in poverty has also changed – a shift towards younger, working people in private rented accommodation.

But there is now a growing group, a subset of those in poverty, whose circumstances, both in terms of material wellbeing and security, are far worse than five or ten years ago. This group includes those whose benefits have been sanctioned or capped, people in temporary accommodation and people who have been evicted from their homes.

It is a group of people whose entitlement to state support in hard times has been restricted, and whose problems frequently manifest themselves in housing crises.

One change is the continuing rise in the state pension age, and the impact this will have on pensioner couples receiving pension credit. Pensioners are generally seen as generously treated by the benefits system. Over half the ‘welfare’ budget is spent on pensions, and the state pension is protected by the ‘triple lock’ – it rises by  whichever is the highest percentage rise – earnings, inflation or 2.5 per cent. But pension credit is not included in this lock, and has been subject to the same freezes and low increases as working-age benefits. As a result, after-inflation pension credit is worth less in 2015 than it was in 2010.

The second big change relates to working-age benefits. A cut in working tax credits was announced in the 2015 summer budget. The changes – a cut in the total amount that any family could receive and a reduction in the number of families eligible – were announced alongside the new National Living Wage (NLW), effectively a much higher minimum wage for those aged over 25. From a poverty perspective, the cuts to tax credits do far more harm than the increases to the minimum wage will do good.

Many of the trends that worsened the most are at the acute end of the housing crisis – rising homelessness, rising repossessions, the growing number of families living in temporary accommodation. People cannot be expected to work their way out of poverty in such conditions – a secure, affordable home is the first step on the route out of poverty.
The big changes, particularly but not exclusively for those on low incomes, relate to housing costs. The proportion of low-income households who spend more than 35 per cent of their income on housing costs rose steadily from the end of the last decade onwards, a rise obviously linked to the increasing prevalence of private rented accommodation among lower-income households.

Housing rents rose more quickly than the average price index over recent years, but so did other essentials such as food and domestic utilities. Since these items make up a proportionately larger share of expenditure, low-income families have in effect experienced a higher rate of inflation than other families. Year by year the difference is small, but over a decade it has effectively cut their incomes by an additional 3 per cent.

The employment rate in the UK reached its highest level on record, 73.5 per cent, for those aged 16–64 by the first quarter of 2015, although it is still below previous peaks when accounting for changing state pension ages

Turning to the ratio between the unemployment rates of young people and adults, which gives an indication of the gap between the two groups, the rate for young adults was four times that for older people at the beginning of 2015. This is a record high and gives a further indication of the relatively weak position of young people in the labour market

Long-term unemployment has fallen by 300,000 since 2013 but remains above pre‑recession levels. People who used to work in low-skilled occupations make up the majority of those who are unemployed over the longer term.

Though many disabled people want to work the labour market often does not provide adequate opportunities, particularly for those with lower qualification levels. The biggest change has been for lone parent families. In 1998, less than half were in work, at 48 per cent. From the late 1990s to 2007, the year before the recession, there was a strong increase to 60 per cent in work, a 12 percentage point increase. In contrast, the next largest increase by family type over this period was for single adults, at 5 percentage points. The lone parent employment rate then remained constant throughout the recession and subsequent stagnation until 2011, when it began to increase again to reach 67 per cent. As lone parent employment remained constant rather than falling during the recession, it is now almost level with single adult employment rates, which did fall after 2008. Compared with 1996, lone parent family employment rates are 19 percentage points higher in 2014.

The overall reduction in the number of adverse decisions, i.e. referrals for sanctions that are upheld, need not signal the advent of a less punitive sanctioning regime and should be seen in light of the overall decline in the number of JSA claimants By 2013, female life expectancy at birth had risen to 83 years from 79 years in 1993.

Male life expectancy is still lower than female life expectancy and has only just reached the equivalent female life expectancy of around two decades previously. However, male life expectancy has been increasing at a faster rate, from 74 years in 1993 to 79 years in 2013.

For both men and women in more deprived areas, life expectancy is lower than the respective male and female middle quintiles. The difference between most deprived and median for women has not changed in the past ten years, at 3.5 years, but the respective difference for men has decreased slightly, to 4.6 years from 5.2 years. The number of children in need has been rising, especially in the past year. Children in care are still significantly more likely to under-attain at age 16 than other children.

In the last ten years the main tenure shift has been from owner-occupation to private rented. This increase has been greatest among 25–34-year-olds with a shift from one to the other of 19 percentage points, almost double the shift seen in any other age group. But sizeable shifts occurred among children, 16–24 and 35–44-year-olds; the shift towards private renting from owner-occupation is not isolated to one cohort or generation, it can be seen in all age groups under 45.

The main reason for households becoming homeless in 2014/15 was a shorthold tenancy coming to an end which accounted for 16,000 homelessness acceptances (29 per cent of the total). The next most common reason at 14,000 was losing accommodation previously provided by family/friends, followed by relationship breakdown at 9,300.

You can download it here

Return to the home page

 

Advertisements
Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: