Tony Greenham, the author of this blog, is Director of Economic, Enterprise and Manufacturing at the RSA. This blog was originally posted on the RSA website.
Brexit has marked a new low in the abuse of economics in political debate. From politicians playing fast and loose with statistics to policymakers peddling opinions as ‘facts’ we are not just confused; we are disillusioned. More than ever, we need to explore new ways to engage the public in meaningful debate about the economy.
In politics, the economy matters. Ever since Bill Clinton’s campaign chief coined the phrase ‘The economy, stupid’, politicians have been ever more keen to assert their economic competence.
No surprise that the Brexit camps have chosen to fight much of their battles on the grounds of the economy. But in doing so they have managed to generate much heat whilst putting us further in the dark.
Only one in five of us feel well informed about the referendum, and perhaps even more damaging we simply do not trust our senior political figures to tell the truth about the EU. Even the Bank of England’s reputation has been diminished, with only 35% trusting Governor Mark Carney against 38% saying they did not.
In a scathing 83 page report on the Brexit debate, the Treasury Selected Committee concluded that the “arms race of ever more lurid claims and counter-claims” on the economy was impoverishing political debate.
Nowhere is this more evident than in the use of the ridiculous phrase ‘economically illiterate’ levelled against political opponents. Mastering a huge and diverse academic discipline, with at least nine different schools of thought, can hardly be equated with the ability to read. More importantly, who says you have to be a trained economist to have a valid view on the economy?
Economists generally behave better than politicians, but still project confusing and conflicting certainty. While Paul Johnson of the Institute for Fiscal studies argues that economists are almost unanimous in their view that Brexit would shrink the economy, former senior IMF economist Ashoka Mody attacks this apparent consensus as crossing the line into groupthink. In reality, economic predictions depend heavily on the assumptions made by their authors but these are rarely discussed or made transparent to the reader.
So when you hear a statement such as:
“Leaving the EU will make every household £4300 worse off”
You should interpret it as follows:
“To be honest we cannot tell what will happen in the future, but we have tried really hard to have a good guess. To make this guess we have made some assumptions that you may or may not agree with, and you should know that if we made different assumptions we might get a completely different result. We have also relied on some theories about the way the economy works that are contestable, and if you applied different theories you might also get different results. Good luck with all of that.”
You can see the appeal of the former.
At least Paul Johnson, a speaker at our forthcoming launch event for the Citizens Economic Council, injects a rare moment of humility into the debate when he recognises that ultimately this is a political decision. A smaller economy might be a trade-off some people are willing to make for more sovereignty and, as an economist, he says “I can’t tell you how to trade these things off, how to make this choice.”
In other words, if Brexit is the question, economics cannot give you the answer.
So what?
You might reasonably wish a plague on everyone’s economic statistics and just ignore arguments about the economy.
We claim the opposite. We should aim to demystify economics, make economic debate more meaningful and accessible, and find ways to engage more people in active deliberations on economic decisions.
And this is an urgent task. The need for greater democratic engagement on economic issues has become more pressing over time for at least three reasons:
1. Erosion of public trust
Recent economic crises – banking, sovereign debt, Eurozone, scandals about tax havens, corporate asset stripping and persistent poverty even in rich nations, have damaged public trust in economic and political institutions. Doing better economic policy to citizens might help, but how about doing economic policy better with citizens.
2. The rise of pluralism in economics
Apparent economic stability during the period of the Great Moderation was taken as proof of the validity of a package of policies to liberalise markets, trade and finance, reduce taxation and increase labour market flexibility while controlling inflation. These ‘unquestionable’ policies were themselves supported by an equally strong orthodoxy within academic economics.
However, the crisis challenged the idea of a singular, certain and infallible body of economic theory and many have now called for a more pluralistic approach to economic research and policymaking. Recognising this lack of certainty in economic theory magnifies the importance of being open and transparent about the methods and assumptions that have been used to make economic policy choices.
3. Coping with rapid economic transformation in the 21st Century
Even where economic theory and evidence is well established, the future is highly uncertain.
Disruptive new technologies such as genomics, data analytics, robotics and artificial intelligence may change the world of work and the nature of production and consumption in dramatic ways. Degradation of eco-systems and climate change may create increasingly severe and unpredictable impacts. A growing population may see rising migration resulting from conflict, climate change and the search for a better life.
To maintain social stability and allow communities to flourish in the face of such uncertainty and rapid change will require broad based support for economic decision making that has no guarantee of successful results. It will also arguably require more creative and innovative ideas about how to successfully organise and manage market economies.
The key to achieving this is to explore how deliberation and participatory methods can help bring clarity to our collective economic goals, generate better policies to achieve them, and bring more cohesion to our societal choices about the economy.
Too often we feel disempowered to express strong views about how to run the economy because we are not economists. But if we define economics in its broadest sense it is about how society allocates its collective resources to fulfil our needs and aspirations.
Surely everyone can have a legitimate view about that. What we lack are good processes for negotiating the sometimes difficult trade-offs involved – or in politician-speak the ‘hard choices’.
Well it does not seem that the referendum is providing a good process for this, so we will be exploring through the Citizens Economic Council, and a series of coming blog posts, how we can create better processes for economic debate and decision-making.
It is time for everyone to be an economist.
Book your free ticket for the launch event of the Citizens Economic Council on Wednesday 29 June from 6pm.
English local areas are getting more powers from central government. Under the Government’s plans for a “devolution revolution”, local leaders are to be given “radical new powers to take responsibility for driving local growth”. Much of the rationale for devolution has been framed around control and local economic growth. In contrast, there has been little specific discussion about what increasing devolution means for policies to tackle poverty. The Social Market Foundation’s new paper, Devolution and Poverty, examines whether and how we can tackle poverty locally, building on two roundtables with local leaders and policymakers.
There are a number of reasons why giving local areas more control could help tackle poverty. Unlike central government, local government is likely to have much more detailed knowledge and understanding of the causes and consequences of poverty in their areas. That means that they are often better placed to know where money should be best spent, and how to co-ordinate local services – such as skills, employment and childcare support – to help those in need. Localising power provides huge opportunities to try out new ways of delivering services to people. And finally, there could well be a political advantage too, in that building a political narrative around the case for tackling poverty may be easier at local, rather than national level.
However, whilst there are advantages to taking a local approach to tackling poverty, this does not mean that it is always easier or more effective to do so at local rather than national level. Some local areas simply do not have the same capacity to generate prosperity as others – at least in the short to medium term. Some areas have an existing stock of high quality infrastructure, jobs and skills, whereas others will not. Often these trends are highly entrenched and take a long time to shift. That also means that some types of devolution – such as allowing local areas to keep more of the tax revenues they generate – can leave poorer areas worse off, unless measures are in place to limit those losses.
Further, much of the devolution of powers so far has been focused on encouraging local leaders to take measures to boost local economic growth. But even if they are capable of doing so, a focus on growth will not automatically result in policies that effectively tackle poverty. Previous studies have found that it is not uncommon for poverty rates to either increase or stay static even in cities that are seeing economic growth, with London a prime example. A key worry in our roundtables was that often local residents did not have the skills and experience to make the most of new jobs that were being created.
Finally, if local policy is to be driven by local needs, strong local democracy and accountability is vital. Local policymakers at our roundtables worried that there was insufficient awareness of and involvement in the negotiation of devolution deals among local people.
In our paper, we argue that Government should think carefully about the pros and cons of devolution, and whether localisation of powers is always the best way to achieve particular goals. Government needs to explicitly set out where responsibilities for tackling poverty lie when it devolves powers: we examined nine devolution deals and found no explicit references to tackling poverty in them. It should focus on devolving powers for types of policy where local knowledge can be especially helpful – in the commissioning of employment services, for example. But it should be careful in how it devolves powers over tax and welfare, where the dangers of some areas falling further behind are strongest.
Nida Broughton is Chief Economist at the Social Market Foundation
The work of community organisations has always been underpinned by three key values. The first, and most obvious, is self-help: providing services when the state can’t or won’t, or when self-help is actually more effective or appropriate. Second is self-organisation. Community groups are often at their best when they’re movements for change in society, transforming attitudes about everything from homosexuality to disability to mental health. And finally, there’s independence: working strategically with local and national government to make life better by closing gaps in services and loopholes in the law.
That’s the history: what about today? In the current climate, community groups are facing unprecedented budgetary pressures. Making the Cut asked what impact is this having on frontline services and the people using them?
To get a better idea brap has been regularly speaking to community organisations in Birmingham for over a year. These organisations work with some of the most vulnerable in the city and cover a range of sectors, including housing, domestic violence, and youth employment.
What we’ve found is that cuts to spending and changes to public service design are forcing individuals to go to community organisations for the support they need. Whether it’s welfare changes, the closure of local housing advice offices, reductions in youth services, or countless other things, people are increasingly turning to local voluntary sector organisations for help and advice. Between November 2014 and July 2015, for example, 77% of community groups said they had faced a ‘significant’ increase in demand for their service.
But that’s not all: over the same period, 88% of project participants had to make changes to their work because of cuts to funding. For most this meant changes to admin and management support. A lot of organisations have also said there is less funding for overheads and the ‘softer’ activities that help create a fuller, more holistic support service. At the same time funding has become more short-term, making it harder for organisations to invest in their sustainability and to plan long-term interventions. A youth service, for example, might find itself in the unhelpful position of spending a few weeks working with a troubled young person only to have them referred back to the organisation some months later. Having more time with the individual in the first place might have allowed the agency to really get to grips with the problems they faced, giving the young person the confidence and resilience to solve their problems independently.
What is more, community groups are finding it harder to lobby local and national government about the concerns they have. This is partly because with fewer resources and increased demand, most voluntary organisations just don’t have the time to challenge this cycle of diminishing returns. For most the time available to analyse policy, engage with decision-makers, and draw out the strategic implications of new policy, practice, or legislation on their day-to-day work has been massively reduced.
Additionally, the constraints on speaking out are also partly because contractual relationships can make it harder for community groups to say what they need to. Increasingly, commissioning contracts – not just locally but nationally too – are stipulating that organisations can’t speak out about the impact of funding cuts. And many organisations don’t want to risk the relationship they’ve built up with their commissioner because funding is so tight. The customer is always right.
Since the report was published a number of local councillors and council officials have expressed concern about its findings. As communities see the impact of funding cuts really start to hit vulnerable people, most decision makers have said they are keen to deepen their links with the voluntary sector (and, in fact, some community organisations have recently told us they’ve noticed a move toward greater partnership working). Some respondents have since promised to press for formal mechanisms with which the sector can talk to and engage new governing bodies (such as the West Midlands Combined Authority). Others have offered to explore how the contents of contracts between the council and community groups are communicated, as, they claim, the intention has never been to stifle the voice of the sector.
This is a crucial exercise. For we ignore the work, expertise, local intelligence, and advice of voluntary organisations at our peril. Many have a unique insight into the cumulative impact of welfare reforms and public service changes. There is a role for public authorities now, more than ever, to engage community organisations in discussion about how to ensure vulnerable and excluded groups aren’t being left behind. And there’s a role for us, too, as a society to think carefully about what kind of voluntary sector we want to see. Because at the moment there’s a danger we’ll lose the side of it that campaigns, and agitates, and demands. We can’t just be content for community groups to fulfil the first of the values we outlined at the start. Historically, community groups have built hospices, sheltered refugees, and made public transport accessible for the disabled. If we forget this role, we are forgetting its potential. We are forgetting its vitally important role of holding up a mirror to society and speaking truth to power.
Our new work supported by Barrow Cadbury Trust will feed into the ‘Making the Cut’ project by creating a series of voluntary sector “conversations” around social cohesion and inclusion in Birmingham. Watch this space.
For more information about the Making the Cut project go to www.brap.org.uk/projects/making-the-cut
Recent research in the UK also found that stories work the other way too. Ministers may think they are basing decisions on data or numerical evidence, but the real evidence suggests they are swayed at critical moments by hearing a moving, human story.
Stories are a kind of currency that politicians use, not just in speeches, but in conversations and pep talks. A good story can win them an argument at a critical moment. The recent film Lincoln showed the great president telling folksy stories at nervous junctures to shift the mood.
So when you are trying to persuade politicians and policy-makers that a new way of regenerating local economies is beginning to emerge, you may want to use the data – but, if there are no success stories, then they probably won’t take it in.
So where are the human stories about the new age of local enterprise, where people decide to take their own local economies by the scruff of their necks? Answer: they seem to have stayed local.
When I was working on these issues in Whitehall in recent years, it struck me – not just how little policy-makers thought about very local economic activity, but how few stories were in general circulation about it.
I wasn’t sure I could point to the most exciting examples in the UK myself. So with the help of Barrow Cadbury, we set about telling the most exciting stories of local renewal we could find in England: the result is a book of stories, more novelisation than thinktank report – though it is actually both – to try and get these tales of imagination, energy and dusting-yourself-down-and-trying-again into the political conversation.
The book ‘Prosperity Parade’ is published by New Weather on 24 March. The stories amount to a take on the emerging revolution in ‘ultra-local’ economics for places left high-and-dry by downturn and the global economy. Because, without them, this shift is often going unmeasured and unacknowledged. Whitehall can’t see it, policy-makers don’t track it or support it, and the high street banks have no interest in providing for their needs.
They include:
- How a small group of growers are turning Manchester’s food system inside out.
- How they wired-up Bath to earn money from its own energy.
- The story behind the success of the Bristol Pound, the Digbeth Social Enterprise Quarter, and the Wessex Reinvestment Trust.
- How two towns analysed where local money was flowing to and made it flow better – by tracking entrepreneurs (Totnes) or by investing local pension money (Preston).
But the real message is to the emerging enterprise revolution: don’t be shy – tell your stories.
David Boyle is co-director of the New Weather Institute and the author of Prosperity Parade:
http://www.newweather.org/2016/03/13/why-policy-makers-dont-see-the-next-local-economic-revolution/
Life costs more if you are disabled. Research by the disability charity Scope estimates that on average, disabled people spend £550 a month on disability-related expenditure.[1]
The financial penalty of disability manifests itself in a number of ways, from the high cost of specialised equipment such as powered wheelchairs, to spending more on taxis to get around; from higher energy bills, to more costly insurance premiums. These extra costs have a profound impact on an individual’s standard of living – they can limit family life and opportunities to learn, work and participate in society.
In response to this problem the Extra Costs Commission was set up in July 2014, as an independent inquiry to explore these extra costs for disabled people and their families in more depth. As a group of fifteen Commissioners with experience across banking, finance and consumer affairs, seven of whom were disabled people, we have sought to identify and find solutions to drive down these costs.
Whilst recognising the part welfare payments play in covering the additional costs of disability, these do not go far enough – in 2015/16, the average award for Disability Living Allowance and Personal Independence Payment will be around £360 a month.[2] As such, the Commission’s focus has been on the role that non-governmental actors, including private-sector markets, can play to tackle extra costs.
Based upon new evidence in the Commission’s interim report, we have concentrated on five extra cost areas in particular – energy, clothing and bedding, specialised equipment, taxis and private hire vehicles and insurance. These are the cost areas that were frequently mentioned by disabled people and where we consider changes could have the most impact.
We have also carried out research to learn more about disabled people’s experiences as consumers, and have spoken to businesses across different sectors to understand more about their relationship with disabled people.
The Commission’s final report has now been launched. This contains a series of recommendations targeted at four groups – disabled people and their families, disability organisations, businesses and regulators and government.
Disabled people and their families
One of our strongest messages is to disabled people themselves. There are over 12 million disabled people in the UK[3], and households with a disabled person spend £212 billion a year[4], the so-called ‘purple pound’. To build power behind this, it is paramount that disabled people are seen as a collective consumer force, similar to the gay community with the ‘pink pound’ and older people with the ‘grey pound’.
The Commission is calling on disabled people to adopt the identity of ‘disability’ willingly, an often rejected identity. By doing so and by being ‘bold and loud’ as consumers, disabled people will be in a stronger position to encourage companies to serve them better. This will involve disabled people sharing information about their needs and expectations as shoppers, speaking up when dissatisfied and being more demanding as consumers.
Businesses
Alongside this, change needs to happen within markets to reduce extra costs for disabled people. A shocking three quarters of disabled people have left a shop or business because of poor disability awareness or understanding – these organisations could be missing out on a share of £420 million a week of revenue. [5]
A failure to meet demand from disabled people limits choice and competition in markets. Not only can this drive up the cost of essential goods and services for disabled people, but it also has the potential to hit organisations’ reputations and profitability.
To this effect, the Commission is calling on businesses to take steps to acquire more intelligence about disabled people as consumers, to provide this group with appropriate products and deals suited to their needs. For example, 1 in 3 disabled people spend money on specialised equipment, [6] a market estimated to be worth over £720 million [7] – this is a lucrative market that businesses could do more to tap into. Additionally, businesses should ensure that they are doing all they can to attract disabled consumers. This will mean taking action to respond to customer feedback and ensuring that online platforms are fully accessible.
Disability organisations
To support several of the Commission’s recommendations, disability organisations are well-placed to use their brand profile and knowledge of disability to improve information and services to disabled people and businesses to allow them to drive down the extra costs of disability.
For disabled people, this could involve providing advice and guidance that incorporates a focus on consumer matters, or setting up an affiliate scheme to obtain discounts. For businesses, the emphasis should be on helping them to understand more about the needs and expectations of disabled people as consumers. One area where this could happen is insurance, where disability organisations could support insurers to develop and improve customer service and offers for disabled people.
Regulators and government
Lastly, where action by the above groups is insufficient, regulators and government should intervene in instances where market features result in unfair extra costs for disabled people.
The Commission recommends specific action to ensure the affordability of products in relation to the insurance industry and taxis and private hire vehicles. Improving digital inclusion for disabled people is another area that we have looked at, as access to the internet is a key part of being a savvy shopper.
The Commission is pleased that several organisations have committed to taking forward recommendations in the final report. We hope that other organisations will step forward to join this movement to drive down the extra costs of disability. Though the Commission has formally ended, it will reconvene in June 2016 to review progress that has been made on the recommendations contained in the final report.
Find out more about the work of the Extra Costs Commission
[1] Brawn, E: Priced Out, Scope, April 2014
[2] Ibid
[3] ONS: Family Resources Survey 2012/13, July 2014
[4] DWP press release on ‘purple pound’ figures, 27 August 2014: https://www.gov.uk/government/news/high-street-could-be-boosted-by-212-billion-purple-pound-by-attracting-disabled-people-and-their-families
[5] Extra Costs Commission: Interim technical report, March 2015
[6] Extra Costs Commission call for evidence from disabled people and their families, 2014
[7] Consumer Focus: Equipment for older and disabled people: an analysis of the market, November 2010
Sumi Rabindrakumar, Gingerbread’s Research Officer, blogs about Gingerbread’s new report on childcare which highlights the need to make work pay for low income families
The cost of childcare has increasingly made the headlines of late, striking a chord with many parents. For single parents, this is a particular worry; as the main carer for their children, they rely on childcare to ensure they can juggle the demands of work, care and the unpredictable events life throws up.
Gingerbread’s new research shows that single parents’ childcare arrangements can involve a complex patchwork of different providers to keep costs down and make ends meet. And it often means relying on unsustainable or unreliable ways to manage caring responsibilities, from elderly parents to low-paid self-employment.
“If it wasn’t for my parents and sister, I would have to give up work.”
Will universal credit help?
New support for low income families – increasing support from 70 to 85 per cent of childcare costs – was initially restricted to families on Universal Credit who paid income tax. After campaigning by Gingerbread and other groups, the proposal was extended to all families on Universal Credit. The total cost of this policy is around £400 million – not a sum to be sniffed at, and certainly welcome relief for many parents, as shown by Donald Hirsch’s analysis for our report. But a number of things shouldn’t be overlooked about this extra support:
- It comes on the back of a cut in childcare support for low income families in 2011 (from 80 to 70 per cent of costs); single parents have been under significant financial strain as a result
- It will only be introduced from 2016 – six months after higher income families will see additional support in the form of ‘tax-free’ childcare
- It is only available under Universal Credit – most single parents are some way off transferring to this new benefit and will, in the meantime, be stuck on the lower level of support
- Work still won’t make economic sense for parents with high childcare costs. As they increase their work hours, and as a result childcare bills, costs are likely to exceed the cap on fees eligible for support; these losses are even greater for low-paid single parents
- Many – if not most – single parents will still be short of a decent income, as measured by members of the public, particularly those working part-time or on a low wage.
“I cannot afford to go back to work full-time and cover rent and childcare. Every day I worry about money”
Making work pay
Single parents are struggling now. Around half of single parents surveyed have borrowed money to cover childcare payments in recent years. Many single parents who want to work can’t. Only one in ten single parents surveyed said childcare was not a barrier to apply for or to take up a job. The Government has made a clear commitment to ‘make work pay’. We know the income struggles of single parents won’t be solved by childcare policy alone, but it forms a big part of the jigsaw. That’s why we’re calling for urgent action – to ensure additional support is brought forward, for all low income families regardless of whether they’re on Universal Credit or tax credits – and to increase the cap on support to reflect soaring childcare costs over the past decade.
In fact, as our report shows, making childcare policy more effective could mean work pays for both parents and the state, if it gets people paying more in taxes. With a new government on the horizon, now is the time for a clean slate on childcare policy. We need a system that is coherent, affordable and works for all parents. Rolling out a policy undermined by outdated limits and high childcare costs does both struggling parents and the wider economy no good at all.
“I got myself educated, and into a career; I saved money instead of spending frivolously. Yet there is no way that I can break even, whether I work or not…I can be let go from the job at a week’s notice, but I’ll still be liable for six weeks of nursery payments.”
‘Paying the Price’ is a research project being carried out by Gingerbread, with funding from Trust for London and Barrow Cadbury Trust. ”The childcare challenge’ is the third report from the project; Read Donald Hirsch’s supporting paper.
I know from my own personal experience that disabled people often pay more than others for the same goods and services. That’s why I agreed to lead an independent panel of business people – the Extra Costs Commission – on a year-long inquiry into how we can bring down the premium that disabled people and their families pay.
We are taking a close look at which markets could be better at supplying goods and services to disabled people. We’ve reached the half way stage and today our interim report sets out a blueprint for business to value and serve the so-called ‘purple pound’.
But, first to get an idea of what we are grappling with, let’s take a look at the impact of extra costs on one family. Thirty nine year old Emily lives in Eastbourne with her husband and four children – Lucy, 16, William, 12, Oscar, six, and Reuben, who’s four. Both the younger boys have autism, and Emily has had Myalgic Encephalopathy (ME) for many years, which means her energy and movement have been limited. She is recovering now, and has recently returned to work, but she still uses a wheelchair for long distances. In every aspect of life her family is trying to meet the extra costs of disability.
Government action to address these extra costs has focused on raising the income of disabled people through the welfare system, through extra costs payments (Disability Living Allowance, Attendance Allowance and the Personal Independence Payment). Until now, very little has been done by anyone to tackle the root causes of the problem – by looking at how to reduce disabled people’s outgoings in the first place.
This is a missed opportunity.
Today’s report makes the economic case for addressing the issue. Disabled people are loyal consumers, but our research shows that they aren’t afraid to take their custom elsewhere when they receive poor customer service. We’ve highlighted that where shops and businesses don’t meet the needs of disabled consumers, they are losing out on £1.8 billion a month that is being passed over to companies who have recognised the potential of delivering to this group.
According to the Department for Work and Pensions, the ‘purple pound’ in total is worth £212 billion a year. In our report, we’ve set out ways businesses can capitalise on this market, by finding out more about disabled people’s preferences and needs, responding to incentives such as accreditation and awards schemes, and creating an affiliate scheme like a Nectar card to help them serve this group more effectively. The challenge for disability organisations is to increase awareness of the ‘purple pound’ with businesses, provide more information and advice to disabled people to help them make the best value purchasing decisions, and work with disabled people to drive down the extra costs that they face.
It works for everyone. Companies can improve their financial returns, and disabled consumers and their families will get better deals Our interim report should be seen as invitation to a conversation with all those who might play a role in delivering change.
Austerity policies have put communities and organisations across the UK under intense pressure. While the negative social consequences are well documented, less attention has been paid to the range of creative responses to austerity measures coming from local authorities, housing associations, grant-makers and funders, charitable and voluntary sector, campaigners and activists.
While these are difficult times, groups across the UK are finding ways to maintain and even expand their activities. Driven by the aims of promoting wellbeing and tackling inequality, they are taking action to mitigate the effects of austerity, to challenge it, and to imagine alternative responses.
The landscape of responses
In our new report, out today, we draw together a set of existing examples to map out the range of strategies that communities throughout the UK are using to respond to austerity, building a strong knowledge base to support new groups in their ambitions and catalyse further pursuits that aim to achieve social justice.
We show how different groups across the UK have been:
• Adapting by making austerity more liveable or workable.
Innovative local authorities have taken creative approaches to public spending which foster local economies, and have tried to make the most of existing assets rather than selling them off. Examples include public service reforms intended to build upon and mobilise local assets to improve service delivery, as well as the delivery of services that help people meet basic needs of housing, food and energy. The Monkey project in County Durham was set up by a group of housing associations and charities to provide free support to social housing tenants struggling with the cost of living due to falling wages and benefit cuts. The project can provide one-to-one advice, affordable new and good-quality reused furniture, discounts on new carpets and low-cost home contents insurance.
• Challenging by speaking out against austerity.
Local authorities, charities, campaigners and activists have used research and evidence to show the negative effects of austerity on people’s lives. Others have developed campaigns that challenge landlords and payday lenders on business practices that capitalise on the desperate conditions of low income families, and have challenged government policies that advance austerity. Psychologists Against Austerity are an example of a new group, formed of community psychologists who are speaking out about the impact of austerity on mental health, using psychological and evidence-based research. Focus E15 Mothers are another example of a strong and articulate challenge to austerity. They challenged the local effects of austerity in Newham and the narrative that young, low income mothers do not have a right to affordable housing within London.
• Imagining by becoming advocates of alternatives and wider structural change.
A handful of groups are looking beyond present circumstances to envisage ways of organising politics, the economy and public services beyond the current era of austerity. This involves a mixture of theory and practice on ideas such as ‘guerilla’ local economic development, investing rather than cutting, and developing services that are able to prevent problems before they occur, rather than curing them at a late stage. Examples include groups such as the Early Action Task Force which have developed a series of recommendations for hardwiring prevention into public budgets, and Preston City Council which is working closely with the Centre for Local Economic Strategies (CLES) to spearhead new approaches to community wealth building through employee ownership.
Future possibilities
Austerity remains, for now, at the heart of the mainstream policy agenda. If cuts continue beyond this year’s election, local authorities’ budgets will be stretched to breaking point. The case against austerity and need for alternatives can only grow clearer.
“I don’t want to go to the Job Centre anymore. I’ve got bad blood pressure, and I don’t want to accept this pressure from them. These people are pushing you, pushing you, and in the end I feel like I am in dessert. There is no job, and I can’t take it….”
Nadya, a single mother from Sheffield.
Recently the Fawcett Society launched our new report: Where’s the Benefit? An Independent Inquiry into Women and Jobseeker’s Allowance. The report was a culmination of months of work examining how changes made to the benefits system specifically Job Seekers Allowance (JSA), have impacted on women. The results were very concerning. We found that the benefits system concerned with job seeking is making some groups of vulnerable women even more likely to experience poverty, ill-health, exploitation and abuse. Lone parents, women who suffer violence at home and women who have difficulties with English are being particularly hard hit. We also found evidence of failings in both the design and the implementation of the JSA system. For example, although special arrangements should be made to protect claimants who are experiencing violence from a partner, claimants are not routinely told that this is possible. Lone parents, nine out of ten of whom are women, are often expected to look for full time work involving up to three hours travel every day even when this makes it impossible for them to also look after their children.
“Barbara called the Helpline in distress…the Work Programme Adviser gave her an appointment at 9.30am [but] she needed to travel on 2 buses [to take] her daughter to school. The Adviser told her to get her child into after school care even though the local service is full and also said it was alright to leave her for a couple of hours on her own.”
Submission from One Parent Families Scotland.
Some women are being expected to meet near impossible conditions in order to receive a basic benefit. When those conditions aren’t met these women are sanctioned, often losing all of their benefits – sometimes repeatedly – as the result of a system that doesn’t take account of the specific circumstances of many women’s lives.
“I think we’re a much easier target to be sanctioned, because, as women, we are less likely to kick off and be violent, much, much less likely, and I think that’s what makes us easier targets. And 99% of the time we’ve got children hanging off us so we haven’t got time to be arguing with these people, so you are having to take it and think, I’ll deal with that later, or I’ll deal with that tomorrow.”
Focus group participant.
We examined a vast amount of evidence including research that other people had written, undertook focus groups up and down the country, one to one interviews and had a day of evidence where we heard from women affected by the changes as well as NGOs, academics and expert practitioners who told us just what was happening. An expert panel reviewed all the evidence before making recommendations, including Amanda Ariss – the CEO of the Equality and Diversity Forum who was the chair, Carlene Firmin MBE – Head of the MsUnderstood Partnership and Research Fellow at the University of Bedfordshire, Baroness Meacher, Sir Keir Starmer QC and journalist Rosamund Urwin. The panel reviewed the evidence and attended the live hearing making recommendations for the final report.
The Inquiry made 12 recommendations including:
- Specialist advisers should be available to support claimants such as lone parents, women experiencing domestic and sexual violence and women with difficulties speaking and understanding English. These advisers could ensure that the policies already in place to protect vulnerable women are followed in practice.
- The conditions demanded of claimants should take account of the impact of caring responsibilities, language barriers and the impact of domestic and sexual violence.
- Claimants should be told about policies which are there for lone parents and people experiencing domestic or sexual violence.
- All claimants should receive a thorough diagnostic interview after three months of claiming JSA, to ensure they are receiving the support they need to move into sustainable, quality employment and are not being required to take up activities, at a cost to the public purse, that make little or no contribution to their job search.
Inquiry Chair Amanda Ariss said: “It is deeply worrying that a benefit that exists to support us all if we find ourselves out of work is putting vulnerable groups of women and their children at risk of unnecessary financial hardship, mental and physical ill-health and, in extreme cases, exploitation and abuse. This makes no sense. These women are not being provided with the support they need to move into work, which would benefit the women themselves, their families and the wider economy. Instead they are forced to meet conditions that are sometimes close to impossible, with the constant threat of sanctions should they slip up. It doesn’t have to be this way. With some modest changes to the design and implementation of JSA we could have a system that supports women to move into quality, sustainable work.”
The 20th Century can lay claim to being the suburban century. The growth of suburban housing development in the 1930s, the mass production of the car and slum clearance after the war all meant that suburbs became places where young families (both blue and white collar) flocked in their thousands. The opposite was true in city centres characterised by falling populations and growing concentrations of poverty.
However, since the turn of the 21st Century the trend has been in reverse with many of our city suburbs suffering from relative economic decline and social deprivation. The socio-economic geography of suburbia is changing, and on current trends suburbs are losing out to now thriving inner cities.
Population growth in urban areas
Our work at the Smith Institute for Barrow Cadbury is showing that population growth in our major urban areas was significantly faster than outer areas. Greater Manchester’s urban population, for example, grew by 17% and the West Midlands by 16%, whilst their suburban populations have both grown by just 5%. What seems to be driving this change is a mix of policy interventions (including urban regeneration), businesses (re)locating to urban areas, and changes in perceptions of our cities.
In public policy terms, ‘placemaking’ (a people-centred approach to the planning, design and management of public spaces) has for the last decade been dominated by urban renewal and regeneration. As part of this agenda the focus has been on redeveloping city centres to make them attractive places for businesses, consumers and residents. The agglomeration of businesses (especially in service industries) has also led to economic activity becoming more concentrated in the heart of our cities. One of the more startling findings of our research to date has been jobs growth. For example, in outer London 11,000 additional jobs were created over the last ten years whilst in inner London the figure was a staggering 505,000. It is not just the number of jobs that have grown rapidly in city centres and stagnated in suburban areas, but also the quality of jobs, with more skilled work located away from suburbs.
The suburban job market
This could of course mean that those performing those jobs are suburban residents travelling into the centre, with suburbs remaining places of affluence. However, evidence shows that this is not the case. In Greater Manchester the number of jobs performed by suburban residents has increased by 6% versus a 47% rise for those living in urban areas.
This change in the economic fortunes of city centres is mirrored in other social indicators. Whilst it is still the case that urban areas have higher concentrations of deprivation, poverty rates seem to be narrowing. Other social indicators also seem to be following a similar trend, such as crime and education. In London, for example, educational achievement (5* A-Cs) is now the same in inner and outer London. In addition, the dynamics of the housing market and the way social housing is funded also means that more affordable housing is to be found in suburban areas.
Serious economic decline
All suburbs are different, and many remain places of relative affluence and wealth. However, a growing number have and are experiencing higher rates of poverty and are arguably in serious economic decline. This has significant implications for public policy and for those in the third sector providing support for people on low incomes. Challenges such as access to work may be more problematic in suburbs than urban areas, not least because public transport is not as regular or affordable. This is also true for other services which are more costly to provide over a larger distance. Over the coming months the Smith Institute will be examining some of these concerns and discussing what can be done to achieve a lasting suburban renaissance.
Creating places with access to jobs, high-quality public services, decent homes, and a safe environment are critical for growth in both urban and suburban neighbourhoods. However, the evidence suggests that many of the city suburbs are struggling with rising rates of poverty and relatively lower earnings. Knowing more about what is happening is critical to setting out a range of policy responses that can prevent many of our suburbs slipping into a spiral of decline.
Find out more about the work of the Smith Institute. Read Poverty in suburbia: a Smith Institute study into the growth of poverty in the suburbs of England and Wales published in April 2014.
