A Devolved Approach to Opposing Poverty?

March 2013

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Julia Unwin argues that devolution offers a degree of protection and an opportunity to drive a different sort of debate and discourse in Wales.

The UK has a problem with poverty.  For a wealthy country, the levels of poverty we experience here are high compared to other nations. This is a problem that we cannot afford, because poverty is wasteful. It leaches capacity and capability at a time when we need to be globally competitive to have any chance of recovery. And it costs us a fortune – with research funded by JRF estimating the cost of child poverty alone to be in the region of £25billion.


The sweeping changes to our welfare system that are just over the horizon are held up as a solution to poverty, but I argue here that this is a misguided view. 


I do not say this because I do not think we should reform welfare.  On the contrary, reform is long overdue.  Our present system has grown through a process of accretion, into a complex mass of differing entitlements and delivery bodies, each with their own rules and paperwork.  Our welfare bill is expensive, and our welfare system is loathed by those who depend upon it and criticised by those who understand it. 


The ambition of universal credit to deliver a more simplified system that eases the transitions into work is undoubtedly right.  But as with any such large scale reform, the devil is in the detail, not least because we’re trying to implement these changes against a backdrop of public sector austerity and a flat-lining economy.  This is bound to make for a difficult birth. 


But the main reason why this is a misguided view is that it fails to appreciate two crucial issues.  The first is that welfare reform, on its own, will never end poverty.  To achieve this goal we must also tackle the twin challenges of a labour market that produces too many low paid insecure jobs offering insufficient earnings for people to make ends meet, and the fast rising cost of living that compound this problem.  In recent years rapid rises in rents, childcare, energy and food prices have forced up peoples’ essential spending. 


The second issue is that we cannot consider the introduction of Universal Credit in isolation.  This major reform is being introduced alongside a battery of other changes to the welfare system.  The changes to council tax benefit, the so called bedroom tax in social housing, the overall cap on benefits, the decision to uprate benefits below the rate of inflation - and there are a number of others I could list – each may in its own right seem a relatively small change, that can be assessed on its own merit and its impact measured.  In some ways this is of course true, and indeed the government has published impact assessments for a number of these changes. 


But what hasn’t been done is a cumulative assessment of the overall impact of these changes.  We can be sure that for some individuals and families they will combine to create a toxic mix, condemning them to poverty. 


And just as the impact will be different for individuals and families according to their circumstances, so too will it vary in different parts of the UK.  To take Wales as an example: the Welsh Government had the foresight to ask the Institute for Fiscal Studies to assess the impact of welfare reform in Wales.  The results do not make for happy reading.  Some of the points that stand out are:


  • Waleshas a higher dependence on welfare benefits compared to other places and as such will feel the effects of welfare reform more keenly than other places.
  • By 2014/15 Welsh households will have lost 4.1% of their income - £1,100 per year - due to tax and benefit changes.
  • The places in Wales that will feel the impact most disproportionately are, perhaps predictably, the South Wales Valleys and the inner city areas of Cardiff, Newport and Swansea.


The prospects are not good.  Indeed, I would go so far to say we are teetering on the brink of a decade of destitution.  And we may just be propelled into it by a public and media discourse which demonises poor people – as welfare queens, moochers, scroungers and skivers – and equates poverty with wickedness or hopelessness.  And this should not be taken as a party political point.  This language is not owned by any one political party rather it has seeped into our entire discourse. 


But standing on the side-lines wringing our hands over how unjust this is will do us no good.  I would suggest there are three courses of action we should take.


First, we must mitigate the effects of welfare reform and austerity where we can.  Already the Welsh Assembly Government has decided to make good the DWP’s cut to council tax benefit, for one year at least.  And while the room for manoeuvre is inevitably limited by the powers and resources available, there will be other opportunities to vary the pace and soften the impact of these changes.  Devolution offers a degree of protection and an opportunity to drive a different sort of debate and discourse in Wales.


Second we must adapt our services for changing times. Whether that means planning responses to destitution (such as through the provision of food banks), or trying to build resilience (for example through the creation of affordable credit) we must be prepared.


Third, and closely associated, we must gather evidence. Destitution and its close relative desperation are readily hidden.  The minimum we owe those being so sorely affected is the close and detailed gathering of evidence, so that in every town, city and country we can enumerate the difference made, understand precisely the impact, and be in a stronger position to argue forcibly for a new and better settlement.


In all of these tasks Wales, with its devolved powers, has an advantage over the regions of England.  Some may say it’s easy for an outsider to over-state the importance of devolution.  But I would argue it is easy for insiders not to appreciate the very real advantages that you have in the nature, scale, and capability of your governance. Now is the time to maximise its use.


The integrated poverty strategy published by the Welsh Assembly Government last year illustrates the ability to intervene, and in doubling the Flying Start programme demonstrates to the rest of the UK some of the decisive action that we all need. The refresh of the strategy later this year will be a crucial moment, and I am glad that JRF has been able to contribute in a small way to it.


At JRF we have recently launched a major four year programme of work to develop a costed, evidenced based anti-poverty strategy in each of the four nations.  It is too soon to know what will come out of this work, but we do know some of the issues we need for address.  For example, we need to understand the spatial nature of poverty, and what this tells us about how approaches must be sensitive to varying economic and social contexts.  We also need to tackle the murky bottom-end of the jobs market, which traps people in cycles of low pay and no pay, entrenching poverty.  And we need to understand the nature of modern family life, communities and relationships, how they contribute to resilience, and the forces that undermine or support them.


The risks we currently face are enormous. To blindly enter a decade of destitution without mitigating, interfering, recording and reporting would be a gross neglect of responsibility. So too would a simple acceptance of this sort of change. For JRF, our mission is to search out the reasons for and demonstrate the solutions to poverty, in order to influence real and lasting change.  But we will need to work with many others to ensure that we can make a difference.


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Frank Callus 14 June 2013


A persuasive piece. I would ,however, suggest that resilience needs to be interpreted more widely than the capacity to withstand financial difficulties through the provision of credit unions. Resilience is that quality that defines capacity to address challenge - economically, intellectually and in the realms of first engagement with employment.


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