Version with footnotes (PDF)
London, 16 November 2018
The UK is the world’s fifth largest economy, it contains many areas of immense wealth, its capital is a leading centre of global finance, its entrepreneurs are innovative and agile, and despite the current political turmoil, it has a system of government that rightly remains the envy of much of the world. It thus seems patently unjust and contrary to British values that so many people are living in poverty. This is obvious to anyone who opens their eyes to see the immense growth in foodbanks and the queues waiting outside them, the people sleeping rough in the streets, the growth of homelessness, the sense of deep despair that leads even the Government to appoint a Minister for suicide prevention and civil society to report in depth on unheard of levels of loneliness and isolation. And local authorities, especially in England, which perform vital roles in providing a real social safety net have been gutted by a series of government policies. Libraries have closed in record numbers, community and youth centers have been shrunk and underfunded, public spaces and buildings including parks and recreation centers have been sold off. While the labour and housing markets provide the crucial backdrop, the focus of this report is on the contribution made by social security and related policies.
The results? 14 million people, a fifth of the population, live in poverty. Four million of these are more than 50% below the poverty line, and 1.5 million are destitute, unable to afford basic essentials. The widely respected Institute for Fiscal Studies predicts a 7% rise in child poverty between 2015 and 2022, and various sources predict child poverty rates of as high as 40%. For almost one in every two children to be poor in twenty-first century Britain is not just a disgrace, but a social calamity and an economic disaster, all rolled into one.
But the full picture of low-income well-being in the UK cannot be captured by statistics alone. Its manifestations are clear for all to see. The country’s most respected charitable groups, its leading think tanks, its parliamentary committees, independent authorities like the National Audit Office, and many others, have all drawn attention to the dramatic decline in the fortunes of the least well off in this country. But through it all, one actor has stubbornly resisted seeing the situation for what it is. The Government has remained determinedly in a state of denial. Even while devolved authorities in Scotland and Northern Ireland are frantically trying to devise ways to ‘mitigate’, or in other words counteract, at least the worst features of the Government’s benefits policy, Ministers insisted to me that all is well and running according to plan. Some tweaks to basic policy have reluctantly been made, but there has been a determined resistance to change in response to the many problems which so many people at all levels have brought to my attention. The good news is that many of the problems could readily be solved if the Government were to acknowledge the problems and consider some of the recommendations below.
In my travels across England, Wales, Scotland, and Northern Ireland I met with people living in poverty, whether old, young, disabled, in work or not. I talked with civil society, front line workers, work coaches, and officials from local, devolved, and UK governments; and visited community organizations, social housing, a Jobcentre, a food bank, an advice center, a library, and a primary school. I also met a range of Ministers in the central government and in Wales, as well as with the First Minister in Scotland. I spoke at length with politicians from all of the major political parties.
In the past two weeks I have talked with people who depend on food banks and charities for their next meal, who are sleeping on friends’ couches because they are homeless and don’t have a safe place for their children to sleep, who have sold sex for money or shelter, children who are growing up in poverty unsure of their future, young people who feel gangs are the only way out of destitution, and people with disabilities who are being told they need to go back to work or lose support, against their doctor’s orders.
I have also seen tremendous resilience, strength, and generosity, with neighbors supporting one another, councils seeking creative solutions, and charities stepping in to fill holes in government services. I also heard stories of deeply compassionate work coaches and of a regional Jobcenter director who had transformed the ethos in the relevant offices.
Although the provision of social security to those in need is a public service and a vital anchor to prevent people being pulled into poverty, the policies put in place since 2010 are usually discussed under the rubric of austerity. But this framing leads the inquiry in the wrong direction. In the area of poverty-related policy, the evidence points to the conclusion that the driving force has not been economic but rather a commitment to achieving radical social re-engineering. Successive governments have brought revolutionary change in both the system for delivering minimum levels of fairness and social justice to the British people, and especially in the values underpinning it. Key elements of the post-war Beveridge social contract are being overturned. In the process, some good outcomes have certainly been achieved, but great misery has also been inflicted unnecessarily, especially on the working poor, on single mothers struggling against mighty odds, on people with disabilities who are already marginalized, and on millions of children who are being locked into a cycle of poverty from which most will have great difficulty escaping.
Most of the political debate around social well-being in the UK has focused only on the goals sought to be achieved. These goals are in many respects admirable, even though some have been controversial. They include a commitment to place employment at the heart of anti-poverty policy, a quest for greater efficiency and cost savings, a determination to simplify an excessively complicated and unwieldy benefits system, a desire to increase the uptake of benefits by those entitled, removing the ‘welfare cliff’ that deterred beneficiaries from seeking work, and a desire to provide more skills training.
But Universal Credit and the other far-reaching changes to the role of government in supporting people in distress are almost always ‘sold’ as being part of an unavoidable program of fiscal ‘austerity’, needed to save the country from bankruptcy. In fact, however, the reforms have almost certainly cost the country far more than their proponents will admit. The many billions advertised as having been extracted from the benefits system since 2010 have been offset by the additional resources required to fund emergency services by families and the community, by local government, by doctors and hospital accident and emergency centres, and even by the ever-shrinking and under-funded police force.
Leaving the economics of change to one side, it is the underlying values and the ethos shaping the design and implementation of specific measures that have generated the greatest problems. The government has made no secret of its determination to change the value system to focus more on individual responsibility, to place major limits on government support, and to pursue a single-minded, and some have claimed simple-minded, focus on getting people into employment at all costs. Many aspects of this program are legitimate matters for political contestation, but it is the mentality that has informed many of the reforms that has brought the most misery and wrought the most harm to the fabric of British society. British compassion for those who are suffering has been replaced by a punitive, mean-spirited, and often callous approach apparently designed to instill discipline where it is least useful, to impose a rigid order on the lives of those least capable of coping with today’s world, and elevating the goal of enforcing blind compliance over a genuine concern to improve the well-being of those at the lowest levels of British society. I provide various examples later in this statement.
My report comes at a critical moment in the debate over Brexit. I take no position on its merits or on the optimal terms for undertaking it, but anyone concerned with poverty in the UK has reason to be very deeply concerned. Whatever happens in the period ahead, we know that deep uncertainty will persist for a long time, that economic growth rates are likely to take a strong hit, and that tax revenues will fall significantly. If current policies towards low income working people and others living in poverty are maintained in the face of these developments, the poor will be substantially less well off than they already are. This could well lead to significant public discontent, further division and even instability, thus underscoring the importance that steps be taken now to avoid such outcomes.
There are many concerns linked to Brexit. Given the vast number of policies, programs and spending priorities that will need to be addressed over the next few years, and the major changes that will inevitably accompany them, it is the most vulnerable and disadvantaged members of society who will be least able to cope and will take the biggest hit. The IMF has suggested that a no-deal Brexit could cost the UK economy somewhere between 5% and 8% of GDP, representing a loss of thousands of pounds per household.
In my meetings with the government, it was clear to me that the impact of Brexit on people in poverty is an afterthought, to be dealt with through manipulations of fiscal policy after the event, if at all. But Brexit will have serious consequences in this domain and the challenges need to be dealt with head on. A lack of clarity is preventing families at risk of poverty from planning for its impact. People feel their homes, jobs, and communities are at risk. Ironically, it was these very fears and insecurity that contributed significantly to the Brexit vote.
The fall in the value of the pound has already increased the cost of living for people in poverty by £400 pounds per year, and researchers have estimated that the UK economy is already 2-2.5% smaller than it would otherwise have been. Almost all studies have shown that the UK economy will be worse off because of Brexit, with consequences for inflation, real wages, and consumer prices. According to the Joseph Rowntree Foundation, if the government does not adequately uprate benefits to account for inflation after Brexit, up to 900,000 more people could fall into poverty. This would strain a social support system that has been gutted in recent years.
The vote for Brexit reflects a great value being placed on the notion of sovereignty. But while people in a democracy are entitled to prioritize sovereignty through such a vote, it is imperative for steps to be taken to protect the most vulnerable and to ensure that the further fiscal consolidation measures called for by the Government and the International Monetary Fund should not be achieved at the risk of making that group of people even worse off.
The UK stands to lose billions of pounds in EU funds that will disproportionately affect the poorer areas that have most benefited from them, including almost £9 billion in poverty reduction funding between 2014 and 2020. Although the government has announced a “shared prosperity fund” to replace this funding, local and devolved governments told me they had no information about the fund or how it would operate—just five months before Brexit. Time is running out. Brexit could also have particularly harsh consequences for people living in Northern Ireland, with people living on the border and dependent on trade or cross-border employment.
If the European Charter of Fundamental Rights becomes no longer applicable in the UK, the level of human rights protections enjoyed by the population will be significantly diminished. The UK should not roll back EU-derived human rights protections on workplace regulation and inequality.
No single program embodies the combination of the benefits reforms and the promotion of austerity programs more than Universal Credit. Although in its initial conception it represented a potentially major improvement in the system, it is fast falling into Universal Discredit.
Social support should be a route out of poverty, and Universal Credit should be a key part of that process. Consolidating six different benefits into one makes good sense, in principle. But many aspects of the design and rollout of the programme have suggested that the Department for Work and Pensions is more concerned with making economic savings and sending messages about lifestyles than responding to the multiple needs of those living with a disability, job loss, housing insecurity, illness, and the demands of parenting. While some surveys suggest certain claimants do have positive experiences with Universal Credit, an increasing body of research makes clear that there are far too many instances in which Universal Credit is being implemented in ways that negatively impact many claimants’ mental health, finances, and work prospects.
In addition to all of the negative publicity about Universal Credit in the UK media and among politicians of all parties, I have heard countless stories from people who told me of the severe hardships they have suffered under Universal Credit. When asked about these problems, Government ministers were almost entirely dismissive, blaming political opponents for wanting to sabotage their work, or suggesting that the media didn’t really understand the system and that Universal Credit was unfairly blamed for problems rooted in the old legacy system of benefits.
The Universal Credit system is designed with a five week delay between when people successfully file a claim and when they receive benefits. Research suggests that this “waiting period,” which actually often takes up to 12 weeks, pushes many who may already be in crisis into debt, rent arrears, and serious hardship, requiring them to sacrifice food or heat. Given the delay, which will only be partially mitigated by a recent concession, it is no surprise that the majority of claimants seek “advance payments,” which in turn must be repaid to DWP in relatively short order. Additionally, debts to DWP and to third-parties can be deducted from already meager Universal Credit payments at a rate much higher than is the case with the older benefit system. While supposedly deductions are capped at a maximum rate of 40% of the standard allowance portion of the payment (which will change to 30% in a year’s time), the Government told me that in fact additional clawbacks can occur. These so-called "Last Resort Deductions" are for matters such as rent, gas, and electricity arrears, if it is judged to be in the best interest of a claimant or their household.
The rationales offered for the delay are entirely illusory, and the motivation strikes me as a combination of cost-saving, enhanced cashflows, and wanting to make clear that being on benefits should involve hardship. Instead, recipients are immediately plunged into further debt and inevitably struggle mightily to survive.
There are undoubtedly many people who have benefited from the Universal Credit system, and many of the Jobcentre staff play important roles in supporting and encouraging their clients. But many claimants also feel that they are forced to jump through hoops for the sake of it, fill out pointless job applications for positions that do not match their qualifications, and take inappropriate low-paid, temporary work just to avoid debilitating sanctions. One Conservative Party MP with whom I spoke criticized DWP for adopting a military-style command and control approach rather than seeking to empower their clients and instill confidence.
The digital-by-default feature of Universal Credit is highly controversial and a detailed assessment of this aspect is found on page 7 below.
When claimants contest assessments that they consider to be wrong, there is a clear sense that the Orwellian named anonymous ‘decision-maker’ rarely varies the approach. Similarly the requirement that before appealing a disability assessment to a tribunal a phase of mandatory reconsideration must take place is considered by many observers to be little more than a delaying tactic.
One of the key features of Universal Credit involves the imposition of draconian sanctions, even for infringements that seem minor. Endless anecdotal evidence was presented to the Special Rapporteur to illustrate the harsh and arbitrary nature of some of the sanctions, as well as the devastating effects that resulted from being completely shut out of the benefits system for weeks or months at a time. As the system grows older, some penalties will soon be measured in years.
Recent statistics indicate dramatic fluctuations in sanctioning, perhaps reflecting different instructions from on high. For unemployed people, between 6% and 8% are subjected to sanctions, and 31% of sanctions were for a period exceeding three months, and one in eight were over six months. A recent book characterized the sanctions as being cruel, inhuman and degrading, and the Inquiry undertaken by the UN Committee on the Rights of Persons with Disabilities found “evidence of grave and systematic violation of the rights of persons with disabilities,” partly on the basis of the sanctions regime.
Many detailed studies have been undertaken which give substance to the harsh consequences that ensue for vulnerable claimants who are sanctioned. Departmental and Ministerial insistence notwithstanding, there is no clear evidence that recent high employment rates in the UK are due to sanctions, or that blunt and harsh sanctions are superior to far less harmful methods to encourage compliance with conditionality. Indeed, a real deficiency in the data DWP provides about sanctions makes it difficult to assess the regime. DWP does not make public sanctions data disaggregated by race or ethnicity, much less certain other claimant statuses such as single parents or carers. It is also impossible to determine from the data the number of sanctions that an individual has received, so it is not clear if the duration of sanctions is due to consecutive sanctions or rather an individual sanction of longer duration.What is clear from those with whom the Special Rapporteur has spoken, is that sanctions succeed in instilling a fear and loathing of the system in many claimants.
The government says it is taking an experimental “test and learn” approach to Universal Credit, but there seems to be an unacknowledged risk that this approach could treat vulnerable people like guinea pigs and wreak havoc in real peoples’ lives. “Test and learn” cannot be a decade-long excuse for failing to properly design a system that is meant to guarantee the social security of so many, and it does not remedy the damage done to those who were thrown into debt or out of their houses, or made to rely on food banks before the improvements kicked in.
As I spoke with local authorities and the voluntary sector about their preparations for the future rollout of Universal Credit, I was struck by how much their mobilization resembled the sort of activity one might expect for an impending natural disaster or health epidemic. They have expended significant expense and energy to protect people from what is supposed to be a support system. Scotland has repeatedly urged the Government to halt the rollout and paid DWP for the introduction of certain flexibilities for claimants, such as the ability to receive payments more frequently. This is a constant complaint, and while some beneficiaries are happy with monthly payments, a great many suffer as a result of the arrangement, and may end up visitng the food bank or forgoing heating just to stretch a very small amount out over an entire month. While cost has been cited by DWP as one justification for being inflexible and unresponsive, vast amounts have already been expended on automating the system and I am unaware of any precise costing estimate to justify the resistance to implementing this reform.
A Digital Welfare State
Relatively unnoticed amidst the turmoil of Brexit, the UK government announced the ‘total transformation’ of government in 2017. The 2017 Government Transformation Strategy was presented as “the most ambitious programme of change of any government anywhere in the world.” Not only will government services become ‘digital by default,’ as was first announced in 2012, but the inner workings of government itself will be transformed in a push for automation aided by data science and artificial intelligence.
There are few places in government where these developments are more tangible than in the benefit system. We are witnessing the gradual disappearance of the postwar British welfare state behind a webpage and an algorithm. In its place, a digital welfare state is emerging. The impact on the human rights of the most vulnerable in the UK will be immense.
Universal Credit as a Digital by Default Service
The UK government made Universal Credit the first major government service that is ‘digital by default.’ This means that an entitlement claim is made online and that the beneficiary then interacts with authorities mainly through an online portal. One wonders why some of the most vulnerable and those with poor digital literacy had to go first in what amounts to a nationwide digital experiment.
From the outset, the belief within DWP has been that the overwhelming majority of Universal Credit claimants are online and digitally skilled, and confident enough to claim and maintain benefits digitally. Despite contrary indications from some officials, the relevant documents show DWP’s assumption that most people are at ease and competent online.
Overall rollout of broadband internet in the UK may be high, but those figures hide the fact that many poorer and more vulnerable household are effectively offline and without digital skills. According to 2017 Ofcom figures, only 47% of those on low income use broadband internet at home. Only 42% of those who are unemployed and 43% of those on low income do their banking online. According to the Lloyds Bank UK Consumer Digital Index 2018, 21% of the UK population do not have five basic digital skills and 16% of the population is not able to fill out an online application form.
Universal Credit has built a digital barrier that effectively obstructs many individuals’ access to their entitlements. Women, older people, people who do not speak English and the disabled are more likely to be unable to overcome this hurdle. According to a 2017 Citizens Advice survey, 52% of its clients in ‘full service’ Universal Credit areas found the online application process difficult. According to DWP’s own survey from June 2018, only 54% of all claimants were able to apply online independently, without assistance. As of March of this year, only about one third of all Universal Credit claimants could verify their identity online via GOV.UK Verify, a crucial step in the application process.
Again, despite official protestations to the contrary, ‘digital by default’ is really much closer to digital only. Since Universal Credit was announced in 2010, DWP has always underlined that alternative routes to this benefit needed to be “kept to a minimum.” According to its own figures, 95% of Universal Credit claims they receive are made online. DWP points to the Universal Credit Helpline as an alternative route, but long waiting times and call center staff who, according to civil society organizations, are often poorly trained, make this a very frustrating alternative. Jobcentres, many of which have been closed, offer online access, but very little digital assistance is available and official policy is to keep ‘face-to-face’ help at a minimum. Only in really exceptional cases will work coaches make a home visit to offer digital support.
The reality is that digital assistance has been outsourced to public libraries and civil society organizations. Public libraries are on the frontline of helping the digitally excluded and digitally illiterate who wish to claim their right to Universal Credit. While library budgets have been severely cut across the country, they still have to deal with an influx of Universal Credit claimants who arrive at the library, often in a panic, to get help claiming benefits online. In Newcastle alone, the first city where ‘full service’ Universal Credit was rolled out in May 2016, the City Library has digitally assisted nearly 2,000 customers between August 2017 and September 2018.
Many claimants also rely on digital help from benefits rights organizations and charities that are already under pressure from a range of cuts and other demands. They currently receive minimal funding from DWP to deliver Assisted Digital Support, which only covers 2 hours of help with the original application and is not nearly enough to cover the demand for support. As of next year, Citizens Advice will be funded by DWP as the sole provider of Assisted Digital Support, with a total budget of £39 million spread out over several years, which must also cover personal budgeting support. Not only is this a small amount in light of the need, but it diverts funding away from public libraries and other organizations which have set up improvised digital support programs.
Around one third of new Universal Credit claims fail in the application process and never reach the payment stage. Many of those cases may be related to the design of the DWP system. I am unaware of any effort by DWP to estimate the number of people who do not even attempt to apply due to digital exclusion.
While Universal Credit is a very visible example of digital transformation, an even more significant digital change is happening within the walls of central and local authorities. The merging of six legacy benefits into one new Universal Credit system aimed at reaching millions of UK citizens is in fact a major automation project. The collection of data via the online application process and interactions with the online journal provide a clear stepping stone for further automation within DWP.
One example is the Real Time Information (RTI) system, which takes HMRC data on earnings submitted by employers and shares it with DWP, which in turn uses this data to automatically calculate monthly benefits. As DWP explained to the Special Rapporteur, Universal Credit is only possible because of the automated calculation of benefits via RTI.
But with automation comes error at scale. Various experts and civil society organizations pointed to problems with the data feed, including through wrong or late information transmitted by employers to HMRC. According to DWP, a team of 50 civil servants work full-time on dealing with the 2% of the millions of monthly transactions that are incorrect. Because the default position of DWP is to give the automated system the benefit of the doubt, claimants often have to wait for weeks to get paid the proper amount, even when they have written proof that the system was wrong. An old-fashioned pay slip is deemed irrelevant when the information on the computer is different.
Another area of major transformation is that of automated fraud and error detection and prevention. Serious investments have been made by DWP to undertake data matching to identify fraud and error in the context of the Generalised Matching Service. Over the years, millions of inconsistency matches have led to further investigations for fraud and error. At the local level, DWP has subsidized ‘risk-based verification systems’, mostly built by private IT vendors, which flag claimants for low, medium or high risk of fraud and error, thus allowing local authorities to investigate high risk cases more closely. At present, DWP is developing a “fully automated risk analysis and intelligence system for fraud and error,” which will go beyond automatically finding inconsistencies between different databases and aims to prevent fraud and error by using new tools including Artificial Intelligence.
An Artificial Future?
Artificial Intelligence is very much in fashion and there are many related initiatives in the UK. The Prime Minister aims to “propel Britain to global leadership of the industries of the future” including through the use of big data and artificial intelligence, and one of the ‘Grand Challenges’ of the November 2017 Industrial Strategy is to put the UK “at the forefront of the AI and data revolution.” The House of Lords will debate a recent report on Artificial Intelligence on Monday, and new institutions such as the AI Council, the government Office for AI and the Centre for Data Ethics and Innovation are being set up.
Government is increasingly automating itself with the use of data and new technology tools, including AI. Evidence shows that the human rights of the poorest and most vulnerable are especially at risk in such contexts.
A major issue with the development of new technologies by the UK government is a lack of transparency. Even the existence of the automated systems developed by DWP’s ‘Analysis & Intelligence Hub’ and ‘Risk Intelligent Service’ is almost unknown. The existence, purpose and basic functioning of these automated government systems remains a mystery in many cases, fueling misconceptions and anxiety about them. Advocacy organizations and media must rely on Freedom of Information requests to clarify the scope of automated systems used by government, but such requests often fail. Central and local government departments typically claim that revealing more information on automation projects would prejudice its commercial interests or those of the IT consultancies it contracts to, would breach intellectual property protections, or would allow individuals to ‘game the system.’
But it is clear that more public knowledge about the development and operation of automated systems is necessary. The segmentation of claimants into low, medium and high risk in the benefit system is already happening in contexts such as ‘Risk-based verification.’ Those flagged as ‘higher risk’ are the subject of more intense scrutiny and investigation, often without even being aware of this fact. The presumption of innocence is turned on its head when everyone applying for a benefit is screened for potential wrongdoing in a system of total surveillance. And in the absence of transparency about the existence and workings of automated systems, the rights to contest an adverse decision, and to seek a meaningful remedy, are illusory.
There is nothing inherent in Artificial Intelligence and other technologies that enable automation that threatens human rights and the rule of law. The reality is that governments simply seek to operationalize their political preferences through technology; the outcomes may be good or bad. But without more transparency about the development and use of automated systems, it is impossible to make such an assessment. And by excluding citizens from decision-making in this area we may set the stage for a future based on an artificial democracy.
Transparency about the existence, purpose, and use of new technologies in government and participation of the public in these debates will go a long way toward demystifying technology and clarifying distributive impacts. New technologies certainly have great potential to do good. But more knowledge may also lead to more realism about the limits of technology. A machine learning system may be able to beat a human at chess, but it may be less adept at solving complicated social ills such as poverty.
The new institutions currently being set up by the UK government in the area of big data and AI focus heavily on ethics. While their establishment is certainly a positive development, we should not lose sight of the limits of an ethics frame. Ethical concepts such as fairness are without agreed upon definitions, unlike human rights which are law. Government use of automation, with its potential to severely restrict the rights of individuals, needs to be bound by the rule of law and not just an ethical code.
While the overall innovation agenda may point in the direction of light-touch regulation and ethics, the Special Rapporteur would argue for a strengthening of the existing legal framework and its enforcement by regulators such as the Information Commissioner’s Office. While the EU General Data Protection Regulation includes promising provisions related to automated decision-making and Data Protection Impact Assessments, it is worrying that the Data Protection Act 2018 creates a quite significant loophole to the GDPR for government data use and sharing in the context of the Framework for Data Processing by Government.
The Dismantling of the Broader Social Safety Net
Before describing the ways in which the overall social safety net is being systematically dismantled, it is important to acknowledge some of the positive developments of which I was informed by the Government. The latest budget introduced several positive changes to Universal Credit, including a welcome increase in work allowances, as a consequence of which an estimated 2.4 million households will be better off next year to the tune of £630. The Joseph Rowntree Foundation estimates that 200,000 people will move out of poverty as a result of this change. By the same token, such improvements will be partly offset by the continuing freeze on benefits combined with the effect of inflation. The government has also taken steps to prioritize important social care issues through the launch of the government’s first loneliness strategy and the appointment of a Minister for suicide prevention.
There are many ways in which the overall safety net has been reduced since 2010, but this section focuses specifically on the effects of the benefit freeze and cap, the reduction of legal aid, the reduced funding of local authorities, and resulting cuts in other specific services.
- Benefit reductions and limits
Significant reductions in the amount of and eligibility for important forms of support have undermined the capacity of benefits to loosen the grip of poverty. Capping benefit amounts to working-age households, limiting support to two children per family, reducing the Housing Benefit for under-occupied social housing, and reducing the value of a wide range of benefits, have all made it much harder for people to make ends meet.
While the Government has commendably sought to protect the pension entitlements of older people, especially by introducing in 2010 a ‘triple lock’ to ensure that annual pension levels rise in accordance with whichever is highest among the rate of inflation, average earnings, or 2.5%. This helped to reduce poverty among pensioners, although the recent picture is less positive.
But the triple lock contrasts dramatically with the freeze on benefit rates for working age people since 2016. Poor households typically spend a higher proportion of their income on consumer goods than wealthy households and already often struggle to put food on the table after bills are paid. Despite this, the Government froze benefit rates in 2016, thus enabling continuing inflation to systematically reduce the value of the benefits. Poor families have thus had to do more with less as the prices of goods has gone up and the value of their income has declined. Households are expected to have to cope with a reduction of £4.4 billion in 2019/20 alone. This year, when the Chancellor could have used the windfall he received from the Office for Budget Responsibility to end the benefit freeze a year earlier than planned, he instead chose to change income tax thresholds in a way that will help those better off and will do nothing to move the needle on poverty.
(ii) Legal aid
There have been dramatic reductions in the availability of legal aid in England and Wales since 2012 and these have overwhelmingly affected the poor and people with disabilities, many of whom cannot otherwise afford to challenge benefit denials or reductions and are thus effectively deprived of their human right to a remedy. The LASPO Act (Legal Aid, Sentencing and Punishment of Offenders Act) gutted the scope of cases that are handled, ratcheted up the level of means-tested eligibility criteria, and substituted telephonic for many previously face-to-face advice services.
(iii) Local authorities’ cuts
In 2010, the Government pledged to radically reform public services by cutting funding to local authorities in England. This has had tremendous implications for local authorities, which are obligated to balance their books and whose revenue raising powers are limited. According to the National Audit Office, local governments in England have seen a 49% real-terms reduction in Government funding from 2010-11 to 2017-18 alongside a rise in demand for key social services.
As a result, they have transferred a greater share of service costs to users who are often the least able to pay. They have cut spending on services by 19% and focused their spending on statutorily mandatory adult social care and child protection services. The leader of one city council told me local governments have cut preventative, proactive services and then had to cope with a rise in crisis intervention– which can in fact be much more costly than preventative services.
More than 500 children’s centers closed between 2010 and 2018, and between 2010 and 2016 more than 340 libraries closed and 8,000 library jobs were lost. Anyone can rely on public services like the library, but they are of particular significance to those living in poverty who may need to access a computer or a safe community space. I spoke with a group of young people from London who made it clear how valuable a community center is as a safe space in a crowded city where people are squeezed by an immensely challenging housing market, and where being stuck out on the street could lead to crime and gang life.
Local welfare funds, a vital resource for people on the brink of crisis, have been another casualty of austerity. Many local governments in England have closed or cut their Local Welfare Assistance Schemes, leaving vulnerable people and those facing emergencies without anywhere to turn. At least 28 authorities have shuttered their local welfare funds and councils reported reducing their related expenditures by 72.5% between 2013 and 2018. From 2015 to 2018, the proportion of destitute people who reported receiving in-kind help from local welfare funds dropped sharply by 28%. The collapse of this resource for people who face sudden hardship has apparently been of no concern to the government, which decentralized responsibility for the funds and does not collect any information on what has become of them.
Local governments are even struggling with the basic services they are statutorily obligated to provide. Northamptonshire County Council has twice this year issued a formal notice indicating that it was at risk of unlawfully spending more than the resources it has available. As a result there are concerns that hundreds of vulnerable children are at greater risk of harm due to rapidly deteriorating frontline child protection services. In March 2018 the National Audit Office criticized the lack of ongoing, coordinated monitoring of the impact of funding cuts on local authority services and raised the alarm that statutory services are at risk.
The government plans to update its funding methodology for local governments from 2020-21, and in December 2017 it launched a formal consultation on the matter -- the Fair Funding Review. Many people with whom I spoke from local and central government expressed concern that this review could lead to even more negative policies affecting people living in poverty.
(iv) Cuts in other services
As I toured the country, I was told time and again about important public services being pared down, the loss of institutions that would have previously protected vulnerable people, social care services that are at a breaking point, and local government and devolved administrations stretched far too thin.
Cuts are being made without either measuring or accounting for their broader impact, such as increasing the need for crisis support and mental health services. People are being pushed toward much more expensive services that can’t turn them away, like accident and emergency rooms. Other parts of the government are now starting to feel the excessive resulting burden. And cuts that pare back the government’s ability to tackle poverty don’t even make economic sense. The Joseph Rowntree Foundation has estimated that poverty is costing the UK £78 billion per year in measures to reduce or alleviate poverty—not counting the cost of benefits. £1 in every £5 spent on public services is making up for the way that poverty has damaged people’s lives.
The voluntary sector has done an admirable job of picking up the slack for those government functions that have been cut or de facto outsourced. One pastor told me that because the government has cut services to the bone, his church is providing meals paid for by church members. But that work is not an adequate substitute for the government’s obligations. Food banks cannot step in to do the government’s job, and teachers—who very well may be relying on food banks themselves—shouldn’t be responsible for ensuring their students have clean clothes and food to eat.
By emphasizing work as a panacea for poverty against all evidence and dismantling the community support, benefits, and public services on which so many rely, the government has created a highly combustible situation that will have dire consequences. As one city council leader told us, “If there is another recession, our capacity to react to it has been completely cut.” Government officials dismissed such concerns and claimed that Universal Credit would work equally well when a future recession brings high levels of unemployment.
Measuring and Monitoring Poverty
It became clear from my many meetings and encounters in the UK that people want to work, and are taking hard, low paying, and insecure jobs in order to put food on the table. They want to contribute to their society and communities, support their families, live in safe, affordable housing, and take control over their lives. A just and compassionate UK can ensure these people are able to escape the restrictions of poverty. But a social safety net is not just for people already in poverty. It is equally important for a very large number of people whose margin of error is small and for whom a single crisis can lead to disaster. Many of the people I heard from ended up struggling to overcome financial hardship because of a surprise health condition, a divorce, or a child’s disability. More and more working people are trapped in poverty by a rising tide of low pay, debt, and high living costs, and a majority of the UK population will use some form of benefits over an 18-year period. In other words, a majority of the British people have a personal stake in the welfare system functioning effectively.
To address poverty systematically and effectively it is essential to know its extent and character. Yet the United Kingdom does not have an official measure of poverty. It produces four different measures of people who live on “below average income.” This allows it to pick and choose which numbers to use and to claim that “absolute poverty” is falling. Seen in context, however, other measures show that progress in reducing poverty has flat lined, child poverty is rising, and poverty is projected to rise in the coming years. The bipartisan Social Metrics Commission’s New Poverty Measure represents an attempt to create a single comprehensive measure of poverty, and these are the numbers I reference here unless otherwise noted. I would urge the Government to respond to the Commission and adopt its approach, which has received an impressive degree of cross-party support.
The government told me that there are 3.3 million more people in work than in 2010, that so called “absolute poverty” is falling, and that the social support system is working. An elected official added that there is no extreme poverty in the UK and nothing like the levels of destitution seen in other countries. But there is a striking and almost complete disconnect between what I heard from the government and what I consistently heard from many people directly, across the country.
People I spoke with told me they have to choose between eating and heating their homes, or eating and feeding their children. One person said, “I would rather feed my kids than pay my rent, but that could get us all kicked out.” Children are showing up at school with empty stomachs, and schools are collecting food on an ad hoc basis and sending it home because teachers know that their students will otherwise go hungry. Many families are living paycheck to paycheck. And 2.5 million people in the UK survive with incomes no more than 10% above the poverty line. They are thus just one crisis away from of falling into poverty through no fault of their own.
In Jaywick, Erin described how she and her husband used to work full time and had a savings account, but one crisis changed her life. “I needed full time care, and my husband had to leave his job,” she said. “Suddenly we were living on disability. Then our landlord gave us eight weeks to vacate the apartment. We discovered that no one will let you view a house when you’re on disability benefits…. I do not know where I’ll be putting my child to bed soon. Should he be made homeless?”
Cuts to social support, preventative services, and local councils mean that when people need help, there are fewer resources to support them, causing them to rely on charities and crisis services. One front line worker told me that they are referring people to food banks because “people have exhausted the possibility of borrowing from their families and friends, defaulted on their loans, and have nowhere else to go.”
I also heard story after story from people who considered and even attempted suicide, and spoke with multiple organizations that have instituted suicide prevention training for frontline staff in recent years. One person said, “The cumulative impact of successive cuts has been devastating. People are coming to me because they are suicidal, they have turned to sex work, they can’t live with themselves.”
These aren’t just anecdotes. They are reflected in the numbers. In England, homelessness is up 60% since 2010, rough sleeping is up 134%. There are 1.2 million people on the social housing waiting list, but less than 6,000 homes were built last year. Food bank use is up almost four-fold since 2012, and there are now about 2,000 food banks in the UK, up from just 29 at the height of the financial crisis. Not only does the government not measure food poverty, but a Minister dismissed the significance of foodbank use as being only occasional and noted that foodbanks exist in many other western countries. The clear implication was that their rapid growth in the UK should not be seen as cause for concern, let alone for government action.
Employment as the Cure-All for Poverty
The government says work is the solution to poverty and points to record employment rates as evidence that the country is going in the right direction. But being in employment does not magically overcome poverty. In-work poverty is increasingly common and almost 60% of those in poverty in the UK are in families where someone works. There are 2.8 million people living in poverty in families where all adults work full time. Families with two parents working full time at the national minimum wage are still 11% short of the income needed to raise a child. One person told me “I know people who are working five jobs to make the national minimum wage, which isn’t a living wage.”
Low wages, insecure jobs, and zero hour contracts mean that even at record unemployment there are still 14 million people in poverty. Government Ministers emphasized that only 3% of the workforce on zero hours contracts, with no benefits or security. But that amounts to almost one million workers, and a great many of them will be among the most vulnerable members of society. And the Equalities and Human Rights Commission found that 10% of workers over 16 are in insecure employment. Jobs aren’t even a guarantee against people needing food banks. The Trussell Trust told me that one in six people referred to their food banks is in work. One pastor said “The majority of people using our food bank are in work…. Nurses and teachers are accessing food banks.”
The Hardest Hit
The costs of austerity have fallen disproportionately upon the poor, women, racial and ethnic minorities, children, single parents, and people with disabilities. The changes to taxes and benefits since 2010 have been highly regressive, and the policies have taken the highest toll on those least able to bear it. The government says everyone’s hard work has paid off, but according to the Equalities and Human Rights Commission, while the bottom 20% of earners will have lost on average 10% of their income by 2021/22 as a result of these changes, top earners have actually come out ahead. According to 2017 research by the Runnymede Trust and Women’s Budget Group, as a result of changes to taxes, benefits, and public spending from 2010 through 2020, Black and Asian households in the lowest fifth of incomes will experience largest average drop in living standards, about 20%.
Women are particularly affected by poverty. Reductions in social care services translate to an increased burden on primary caregivers who are disproportionately women. Under Universal Credit, single payments to an entire household may entrench problematic and often gendered dynamics within a couple, including by giving control of the payments to a financially or physically abusive partner. Changes to the support for single parents also disproportionately affect women, who make up about 90% of single parents, and as of August of this year, two-thirds of Universal Credit recipients who had their benefits capped were single parents. Single pensioners are also driving the uptick in pensioner poverty, and are significantly more likely to be women.
Many of the recent changes to social support in the UK have a disparate impact on children, including the deeply problematic two child policy, the outrageous rape exception, and the benefits cap. The Equality and Human Rights Commission forecasts that another 1.5 million more children will fall into poverty between 2010 and 2021/22 as a result of the changes to benefits and taxes, a 10% increase from 31% to 41%. Sanctions against parents can have unintended consequences on their children. According to the Social Metrics Commission, almost a third of children in the UK live in poverty. After years of progress, child poverty is rising again, and expected to continue increasing sharply in the coming years. According to Child Poverty Action Group, the child benefit will have lost 23% of its real value between 2010 and 2020, due to sub-inflationary uprating and the current freeze. And low paid jobs and stagnant wages have a direct effect on children, with families where two adults earn the minimum wage still falling short of the adequate income needed to raise a child. Because of changes to benefits and taxes, the Equality and Human Rights Commission projects the poverty rate for children in single parent households to jump to a shocking 62% by 2021/22.
(iii) People with disabilities
Nearly half of those in poverty, 6.9 million people, are from families in which someone has a disability. People with disabilities are more likely to be in poverty, and are more likely to be unemployed, in insecure employment, or economically inactive. They have also been some of the hardest hit from austerity measures. As a result of changes to benefits and taxes since 2010, some families with disabilities are projected to lose £11,000 on average by 2021/22, more than 30% of their annual net income. People with disabilities told me again and again about benefits assessments that were superficial and dismissive, and that led to findings that contradicted the advice of their doctor.
Despite the protections offered by the triple lock, pensioner poverty has begun to rise after decades of decline. Between 2012/13 and 2016/17, the number of pensioners living in poverty rose by 300,000. As was made clear to me in a number of submissions and through powerful personal testimony, a group of women born in the 1950s have been particularly impacted by an abrupt and poorly phased in change in the state pension age from 60 to 66. The impact of the changes to pensionable age is such as to severely penalize those who happen to be on the cusp of retirement and who had well-founded expectations of entering the next phase of their lives, rather than being plunged back into a workforce for which many of them were ill-prepared and to which they could not reasonably have been expected to adjust with no notice.
(v) Asylum seekers and migrants
Destitution is built into the asylum system. Asylum seekers are banned from working and limited to a derisory level of support that guarantees they will live in poverty. The government promotes work as the solution to poverty, yet refuses to allow this particular group to work. While asylum seekers receive some basic supports such as housing, they are left to make do with an inadequate, poverty-level income of around £5 a day. For those who have no recourse to public funds as a result of their immigration status, the situation can be particularly difficult; such individuals face an increased risk of exploitation and enjoy restricted access to educational opportunities.
(vi) Rural poverty
Despite the idyllic traditional image of the English countryside, poverty in rural areas is particularly harsh. Rural dwellers are particularly impacted by cuts to transportation and public services, are at a higher risk of loneliness and isolation, and often face higher fuel costs.
An organization working on rural poverty that I met with in Bristol told me, “If you’re poor in the countryside it’s twice as bad, because you don’t have access to services. People can’t afford the bus and the bus doesn’t go where you need it to anyways.” Without adequate access to transportation, people can’t get to work even when they are able to get a job. One person told me that it was easier for her to go to find a job by going to another city and staying with friends there than it would have been to find a job at home without public transportation.
And with the government’s new dependence on digital-by-default benefits applications, lack of broadband internet or access to libraries are particularly painful. Government officials assured me that anyone can walk off the street and get support to make an online claim for benefits, but that’s simply not the case for people living outside major cities.
Devolved administrations have tried to mitigate the worst impacts of austerity, despite experiencing significant reductions in block grant funding and constitutional limits on their ability to raise revenue. Scotland and Northern Ireland each report spending about £125 million per year to protect people from the worst impacts of austerity. And unlike England, Scotland, Northern Ireland, and Wales have continued to provide access to welfare funds for emergency hardships.
But mitigation comes at a price and is not sustainable. The Scottish government has urged the UK to put an end to the benefit freeze and the two child limit on certain benefits, and told me that they have reached the limit of what they can afford to mitigate, because every pound spent on off-setting cuts means taking away from other vital services. Northern Ireland’s mitigation package runs out in 2020, leaving vulnerable people facing a “cliff edge scenario.” But more broadly, it is outrageous that devolved administrations need to spend resources to shield people from government policies.
Scotland, despite having the lowest poverty rates in the United Kingdom, has the lowest life expectancy and the highest suicide rate in Great Britain. I met with children in Glasgow’s North East, where, according to one local councillor, 48% of people are out of work, life expectancy is six years lower than the national average, about half of families are single-parent households, and about a third of households lack an internet connection.
However, Scotland has recently put in place schemes for addressing poverty, including its Fairer Scotland Action Plan and Tackling Child Poverty Delivery Plan. It has also used newly devolved powers to establish a promising social security system guided by the principles of dignity and social security as a human right, and co-designed on the basis of evidence. The system eschews sanctions entirely and, in contrast to Universal Credit, is decidedly not digital by default. Rather, the stated goal it to make benefits equally accessible however people want to access them.
It is too soon to say if these ambitious steps—and Scotland’s new powers of taxation—will make a difference for poverty, health outcomes, and life expectancy in Scotland. However, it is clear to me that there is still a real accountability gap which should be addressed. The absence of a legal remedy or a more robust reference to international standards in the Social Security (Scotland) Act is significant and should be addressed. I will be following closely the forthcoming recommendations from the First Minister’s Advisory Group on Human Rights.
Civil society groups also raised concerns about a general lack of awareness of local welfare funds for people in crisis and the considerable variation in how local authorities process applications for these emergency grants; in Glasgow only 3% of local welfare fund applications were decided in a day, whereas other councils managed to decide these claims within a day 99% of the time.
Wales faces the highest relative poverty rate in the United Kingdom, with almost one in four people living in relative income poverty. Like the rest of the United Kingdom, employment has not proven to be an automatic route out of poverty in Wales. In-work poverty has grown over the last decade, despite considerable improvement in the employment rate. Twenty-five percent of jobs pay below the minimum wage, and low-paid, part-time or insecure jobs are often disproportionately taken up by women, due to difficulties in balancing work and caring responsibilities.
Faced with these challenges, the Welsh Government has determinedly shifted its focus to increasing economic prosperity and employment as the gateway to poverty reduction. A poverty-specific action plan and the post of the Minister for Communities and Tackling Poverty were scrapped in 2017, in favour of adopting a “whole Government” approach to poverty reduction. The new Prosperity for All Strategy, however, has removed the strategic focus on and the Ministerial responsibility for poverty reduction, and lacks clear performance targets and indicators to measure progress and impact.
In the absence of devolved power over social security benefits, the Welsh Government’s capacity to directly mitigate the reduction in benefits is limited, thereby shifting the burden to low-income households. There is a wide consensus among stakeholders that the benefit changes are one of the structural causes behind the increase in poverty, rough sleeping, and homelessness in Wales. Parliamentarians and civil society voiced serious concerns that Universal Credit may exacerbate the problem, particularly in light of the Welsh Government’s inability to introduce flexibilities in its administration, unlike its Scottish counterpart.
In Northern Ireland, the lack of a government forecloses the possibility of any major efforts to tackle poverty and results in an accountability vacuum. Like Scotland, Northern Ireland has taken steps to mitigate some of the worst effects of austerity measures, and is taking a different and seemingly more humane approach to certain aspects of Universal Credit. But a £500 million mitigation package is set to run out in 2020, and its expiration could have dire consequences for people living in poverty. According to the government, rates of long term unemployment are more than twice those of the UK as a whole.
In Belfast, I was struck by the extent to which communities in the city are still segregated by physical barriers and I was concerned to learn about persistent inequalities along religious lines. A startling 69% of those long-term unemployed are Catholic, compared with 31% Protestant as of 2016. People in Belfast told me that the government was not building sufficient social housing in predominantly Catholic areas, and Northern Ireland’s Equality Commission found that Catholics experience longest wait times for social housing among all religious groups.
The experience of the United Kingdom, especially since 2010, underscores the conclusion that poverty is a political choice. Austerity could easily have spared the poor, if the political will had existed to do so. Resources were available to the Treasury at the last budget that could have transformed the situation of millions of people living in poverty, but the political choice was made to fund tax cuts for the wealthy instead.
It was a British philosopher, Thomas Hobbes, who memorably claimed that without a social contract, life outside society would be “solitary, poor, nasty, brutish, and short.” The risk is that if current policies do not change, this is the direction in which low-income earners and the poor are headed. Loneliness rates have soared in recent years and life expectancy rates have stalled in the United Kingdom, with the latest statistics showing a sharp drop in the annual improvement that has been experienced every year since the records began, and an actual drop for certain groups.
The compassion and mutual concern that has long been part of the British tradition has been outsourced. At the same time many of the public places and institutions that previously brought communities together, such as libraries, community and recreation centers, and public parks, have been steadily dismantled or undermined. In its fiscal analyses, the Treasury and the Government constantly repeat the refrain that fiscal policy must “avoid burdening the next generation.” The message is that the debt burden must be paid off now. The problem is that the next generation’s prospects are already being grievously undermined by the systematic dismantling of social protection policies since 2010.
The negotiations surrounding Brexit present an opportunity to take stock of the current situation and reimagine what this country should represent and how it protects its people. The legislative recognition of social rights should be a central part of that reimagining. And social inclusion, rather than increasing marginalization of the working poor and those unable to work, should be the guiding principle of social policy.
The UK should introduce a single measure of poverty and measure food security.
The government should initiate an expert assessment of the cumulative impact of tax and spending decisions since 2010 and prioritize the reversal of particularly regressive measures, including the benefit freeze, the two-child limit, the benefit cap, and the reduction of the housing benefit for under-occupied social rented housing.
It should ensure local governments have the funds needed to tackle poverty at the community level, and take varying needs and tax bases into account in the ongoing Fair Funding Review.
The Department of Work and Pensions should conduct an independent review of the effectiveness of reforms to welfare conditionality and sanctions introduced since 2012, and should immediately instruct its staff to explore more constructive and less punitive approaches to encouraging compliance.
The five week delay in receiving benefits under Universal Credit should be eliminated, separate payments should be made to different household members, and weekly or fortnightly payments should be facilitated.
Transport, especially in rural areas, should be considered an essential service, equivalent to water and electricity, and the government should regulate the sector to the extent necessary to ensure that people living in rural areas are adequately served. Abandoning people to the private market in relation to a service that affects every dimension of their basic well-being is incompatible with human rights requirements.
As the country moves toward Brexit, the Government should adopt policies designed to ensure that the brunt of the resulting economic burden is not borne by its most vulnerable citizens.