As new reports highlight the increasing inequality in the UK economy; cities, towns and boroughs across the country have united to tackle issues of social exclusion in a new national network set up by the Leader of Birmingham City Council and the Bishop of Birmingham.

While in recent months economic statistics seem to be indicating a more positive outlook for the UK economy, it is clear that a significant proportion of our population are still not feeling the benefit of this improvement.  Only yesterday the Equality Trust released a report highlighting that the gap between rich and poor was rising and that inequality was costing the country £39bn a year.  Figures from Oxfam also released yesterday highlighted that the five richest families in the UK are wealthier than the bottom 20% of the entire population and the gap between the rich and the rest has grown significantly over the last two decades.

Continuing and increasing inequality has the potential to have a  long term damaging effect on our population, impacting on a wide spectrum of social outcome.   Duncan Exley from the Equality Trust highlighted it perfectly when he said yesterday “We know that inequality is a major cause of social problems from crime, to poor health to low educational performance, and that it is psychologically scarring, reducing trust in strangers and isolating individuals”.

Local authorities in towns and cities across the country are grappling with these issues every day.  However the challenge of dealing with social exclusion has been made more difficult because of the reduction in resources.  It is  this context that makes the launch of the National Social Inclusion Network and accompanying Birmingham Declaration so timely.

Led by the Bishop of Birmingham,  Birmingham’s Social Inclusion Process has over the past two years been trying to develop ways of dealing with social exclusion in the city.  The process quickly identified that the task of creating more inclusive cities has moved beyond what local or national government can do on their own, and that there was a need to build a network of local authorities to work together, share knowledge and understanding, as well as establishing a collective voice to challenge the Government to bring about changes that will make dealing with these issues easier.

This awareness resulted in the first National Social Inclusion Symposium being hosted by Birmingham City Council’s Leader, Cllr Sir Albert Bore and The Rt Revd David Urquhart, Bishop of Birmingham,  funded by the Barrow Cadbury Trust, in September 2013.  At this event 15 local authorities from across the country agreed to establish a National Social Inclusion Network and to sign a declaration to demonstrate their commitment.

By signing the declaration, participating authorities have agreed to:

• Be part of the National Social Inclusion Network
• Share learning and develop joint campaigning on key issues around social inclusion
• Build a strong collective voice to articulate the arguments for social inclusion for all communities across the country
• Identify action that can be taken around issues of shared concern

The authorities that have signed the declaration are Barrow-in-Furness, Birmingham, Bristol, Islington, Knowsley, Leeds, Leicester, Liverpool, Manchester, Newcastle, Plymouth, Sheffield, Southampton, Stoke-on-Trent and Tower Hamlets.

The work of the network starts now.  We are already sharing ideas of best practice from successful Birmingham programmes such as the fair money manifesto, places of welcome initiative  and the Birmingham Jobs fund; and we are learning about other projects from across the country.

Over the next few months we will continue to work together in a variety of ways across the network with the shared determination to address deep-rooted issues of inequality and disadvantage and deliver the changes needed.

If you would like to  follow the work of the network you can do so through the blog , via social media @fairbrum and #fairplaces or by getting in touch with our team [email protected]

In 2012 the Northern Ireland NEETS (young people not in education, employment, or training) Strategy was awarded an additional £41 million up to 2015.  Although throwing money at a problem may not always yield the best results, (as it’s the systems and processes behind the investment which are the crucial drivers), it is a step in the right direction for those young people.  What this investment demonstrates is an understanding of the issue and a commitment to “turning the curve”.

However, for young people with severe learning disabilities, life isn’t quite so rosy.  In April 2008 MLAs (Members of the Legislative Assembly) were told that of the 100 young people leaving special schools each year in Northern Ireland, 20% of those with additional complex/profound disabilities would have no choice but to go to a day centre, as there were too few opportunities and support systems to enable them to go on to further education.  Put bluntly the needs of these young people are once more being ignored, despite them coming under the NEETS category.   It was this anomaly that led to the establishment of the Post 19 Campaign in April 2010.

The Post 19 Campaign now numbers 150 parents/carers of young people with severe learning disabilities as well as 21 SLD (Severe Learning Difficulties) Special Schools from across Northern Ireland.  The Campaign questions the lack of post-educational placements for these young people when they leave school at 19.

Equality and disability access issues apply to every creed, class and gender in Northern Ireland.  This is not a green and orange issue.

The Campaign  realises that the Stormont Assembly is accessible in a way in which Government is not in the rest of the UK.  But whilst the campaign can access politicians, and has backed up discussions with its research report ‘The Impact of Transition on Family Life 2012’ the outcome is still sympathy and support not constructive action for change.  So how can we turn this around?

I was fortunate to win the SMK Campaigners Award for Social & Economic Justice in 2013 (sponsored by Barrow Cadbury Trust and Shelter).  As an award winner I received a package of training and mentoring to enable me to drive the campaign forward.  With the assistance of my mentor Dr Michael Wardlow, Equality Commissioner for NI, we moved the focus away from the problems and towards solutions.

In our discussions with Ministers and government departments the Campaign is recommending alternative post educational placements which we identified in our research report.  One of these suggestions was to bring education, not necessarily formal or accredited, into the day centre, where peripatetic learning support teams could be employed to oversee the transfer of Individual Learning Plans from the special school sector.  This would ensure that young people with severe learning and additional complex and/or profound disabilities are no longer written off at 19 years as incapable of learning.  Radical? Not really. Practical? Absolutely!

To our delight the Department of Employment and Learning has included this proposal in its current inquiry due to finish in March 2014.  So progress is underway, but how far this goes is anybody’s guess.  But if all else fails there’s always Plan B – legislation.

Julie Jamieson is the 2013 SMK Social & Economic Justice Award winner

Families have been struggling under the cloud of ‘austerity’ since the 2007 recession. In recent months, there has been renewed debate across political lines over the consequences of austerity reforms and a stagnating economy for living standards. But while many households in the ‘squeezed middle’ are feeling the pinch, new research from Gingerbread shows that single parents’ finances have been hit particularly hard in recent years.

Bearing the austerity burden

Single parents are bearing a disproportionate burden of welfare reforms. The government’s own impact assessments for the wave of changes starting in April 2013 show that they are expected to make up from 20 to 50 per cent of those affected – yet single parents only make up seven per cent of all households.

Our Paying the Price report shows the harsh reality of these changes. Around 40 per cent of single parents we surveyed are paying extra council tax since the localisation of council tax support. Around one in eight single parents surveyed said they had already been hit by the benefit cap. And over a fifth of single parents said they had lost at least £100 per month due to the April 2013 reforms.

For those already living “down to the pounds and pence”, as one single parent put it, these are not insignificant sums. Single parents’ finances are already stretched to the limit – nearly eight out of ten single parents surveyed find managing household finances a constant struggle at best. Rising living costs affect single parents more than couples, as single parents on average spend a greater proportion of their budget on essential bills.

And despite recent ‘green shoots’ of economic growth, the logical response to tighter budgets – earning more – is not an option for many single parents. Out-of-work single parents are keen to find jobs, yet interviews revealed a lack of employment support and understanding among both employers and Jobcentre Plus advisers of single parents’ need for flexible work. And those in work often do not fare much better – nearly a fifth of single parents surveyed said they had lost employment income in the last year due to falling wages or hours, or redundancy.

Managing the downturn

Our research shows how single parents are working hard to manage within tighter finances. Micro-managing household budgets, cutting back on spending (particularly on themselves), scouring shops for the best prices, selling items online – these are just some of the strategies single parents are using to make ends meet.

“I only buy things that I really need. If it means sacrificing something else to buy something that I really need, I’ll do that. We’ll go without until I really, really need it”

But this is not enough to weather the financial storm for many single parents. In our survey, 40 per cent of single parents were in arrears on regular payments; and many had slipped quite far behind. Nearly 90 per cent of single parents surveyed have had to borrow money or seek welfare assistance when they ran out of money in the past 12 months. Around half of those surveyed had to rely on credit cards or overdrafts when they ran out of money; and one in eight had turned to payday or doorstep lenders. Worryingly, the single parents involved in our research suggest that this reliance on borrowed money is on the rise.

“I’m trying not to [take out loans]…when an unexpected bill come in, it’s so easy to say ‘Yes, I’ll have one, and then that’s going to be the last’ – until the next one. It’s just a circle”

A call for caution

It is, of course, welcome news that there are emerging signs of economic recovery in the UK. But this research serves as a timely reminder that not everyone is getting an equal share in these gains.

What is more, the financial situation for many single parents is only likely to get worse. The current welfare reform programme will be less than 60 per cent complete by the end of 2013/14. We do not yet know how universal credit will affect single parents, but recent analysis by the Institute of Social and Economic Research at the University of Essex suggests they will lose out in cash terms, whether in or out of work. And the Chancellor has recently warned of further fiscal consolidation until 2020. It is clear that for those single parents already struggling, there is much more financial pain to come.

Gingerbread will continue to track how single parent families fare under austerity as part of our Paying the Price project. We would, however, urge policy-makers to think hard before embarking on further reforms, particularly to the tax and benefit system. The government’s stated aims for their welfare reforms are fairness and affordability. Pushing single parents to the brink financially, increasing the risk of debt and demand for emergency financial support in the process, risks failing on both counts.

“What is already a struggle becomes a budgeting mission which never ends. There is no respite from watching every penny”

Paying the Price is a research project being carried out by Gingerbread, with funding from Trust for London and Barrow Cadbury Trust. Read the first report tracking single parents under austerity at www.gingerbread.org.uk/payingtheprice.

This week saw the launch of two reports supported by the Barrow Cadbury Trust under its Resources and Resilience programme. On Wednesday 21 November, the Centre for Social Justice (CSJ) released the first part of its Breakthrough Britain II research on debt – Maxed Out – Serious Personal Debt in Britain.   Then on Thursday the Fairbanking Foundation (FF) released A Better Kind of Banking.

On first reading, these reports cover quite different ground. However, the links are there. Maxed Out looks at the causes and consequences of problem debt, exploring the personal, socio-economic and structural factors that cause it. It isn’t surprising to hear that those on low incomes, the unemployed, single parents, older people and those with mental health conditions are among the most likely to fall into debt. However, the report raises the important issue of the growing scale of personal debt, and the impact of the rising cost of living on this. Individuals who previously managed to get by and endure an occasional financial shock, can no longer do so.

The CSJ estimates that 8.2 million households in the UK now have no savings at all (around 50 per cent of these are from low income households). More and more people are turning to high-cost lenders to cover income shortfalls and half of payday loan users (600,000) took out the loan because they had no other access to credit.  At a time of year when households’ fuel usage will be going up and many will have to borrow to afford Christmas, this is worrying news.

There are solutions to serious personal debt we are told, such as access to affordable credit, free debt advice and better promotion of alternative financial providers such as Credit Unions. CSJ also raises the issue of complex financial products and the need to make these simpler or more appropriate for users. Excessive charges for overdrafts and penalty fees deter many people from engaging with the mainstream banking system altogether.

A Better Kind of Banking offers examples of banking products that encourage saving and/or help customers manage their money better. For example, thinkmoney (not a bank) sets up two accounts for its customers, one receives the customer’s income and is used to pay their regular bills, with remaining funds automatically transferred into the second card account. The client can use this for their spending, but if they want to move some of their designated “bills money” to their card account, they contact thinkmoney and discuss the transaction with a Money Manager.  The Money Manager will try and re-jig their budget to make the transfer possible without missing a bill payment, but where this isn’t possible, give common-sense budgeting advice to clients. Customers also get regular texts on the state of their accounts so they can budget accordingly.

Another example, Secure Trust Bank offers a current account into which customers can pay their income and make direct debits and standing orders. Customers can upload money from their account onto a prepaid card, so they can only spend what they have on their card. As there is no credit facility, there is no need for credit checks. If the items being paid out of its customers’ accounts bounce then the Secure Trust Bank does not charge a fee.

Both of these accounts come at a monthly cost to the customer, which will limit who can engage with them. However, they are great examples of how banking products can help people to try and manage their income. Neither can combat the rise in living costs or prevent a financial shock, but they can help to limit the chance of a person falling into debt into the first place. The CSJ report cites ‘escalating penalty charges’ and ‘juggling of finances’ as some of the contributing factors to a spiral of debt. Any banking products that help customers avoid and manage these better must be a good thing. And, the report tells us, thinkmoney and the Secure Trust Bank have business models that work.

It seems likely that personal debt will continue to grow as Universal Credit is rolled out, the cost of living continues to go up and a rise in interest rates looms. It is even more critical then that more banks offer products that help customers save when they can and manage whatever they have better. The FF report is optimistic that a culture shift amongst the larger banks is coming, but believes that more public and competition scrutiny, improved infrastructure and better regulation is needed. These won’t come easily, but as the authors of the report point out, the ingredients are there.  A different kind of mainstream bank, “based on a culture and business model in which banks are paid for helping customers to manage their money more successfully, including saving and staying out of debt” is not an impossibility and if ever it was needed, it’s now.

On Tuesday, the new living wage was announced at £7.65 outside of London and £8.80 within the capital. This comes after the minimum wage was increased to £6.31 last month.

The living wage is calculated annually with separate rates for those living outside London (by the Centre for Research on Social Policy at Loughborough University), and for those living in the capital city (by the Greater London Authority’s Living Wage Unit).  The living wage is predicated on one simple fact: vast numbers of people in work do not earn enough to live on. The introduction of the minimum wage in 1999 has acted as a buffer against some of the most extreme forms of low pay but, with living standards rising and minimum wage increases failing to keep up with the rate of inflation, the minimum wage is not a buffer or a solution to low, insecure pay.

The Resolution Foundation’s report, Low Pay Britain 2013, found that the number of people being paid less than the living wage has rocketed in recent years, increasing from 3.4m in 2009 to 4.8m in April 2012, making up 20% of the workforce.

Low pay is a significant contributor to in-work poverty, and the institute for Fiscal Studies’ analysis demonstrated that hourly pay is a better predictor of in-work poverty than hours of work. However, the characteristics of a person’s job does contribute to the risk of low pay.

Low Pay Britain 2013 illustrated that some groups are more vulnerable to being in low pay than others:

• Women make up the majority of low paid workers whilst a recent report by the TUC illustrated that low pay amongst young women has trebled over the last 20 years.
• Low pay is higher amongst those in low- and middle-skilled occupations such as sales or customer services, as well as those on part time or temporary contacts.
• Older and younger workers are more likely to be paid below the living wage threshold.
• 16-20 year olds make up 83% of those in extreme low pay.

Current political discourse surrounding making work pay has continuously highlighted work as the best means of getting out of poverty. However, this is only possible if work pays enough for people to live on and if they are in secure roles with opportunities to progress. Without a living wage, in-work poverty persists and low wages will continually be subsidised by the taxpayer.  Since launching in 2001, the Living Wage Campaign has won over £210m of additional wages, lifting 40,000 families out of poverty, and over 430 employers have been accredited as living wage employers.

The living wage benefits both workers and employers, as highlighted by joint research from the Queen Mary University of London and Trust for London. Employees are not only better able to provide for themselves and families but also reported that being paid a living wage allowed them to spend more time with their families. Living wage employers benefitted from having more positive and loyal employees as well as better retention rates.

However, despite the traction the campaign has gained thus far, there is still a way to go. To support the millions of people currently in low-paid roles, more employers need to join the existing 450 employers already committed to paying the living wage, and across different sectors. This comes at only a small cost to the organisations. A commitment to the living wage, alongside secure employment, provides the best means of lifting people out of in work poverty whilst at the same time creating better workplaces.

Like many others I’ve been watching the debate about energy company profits and price rises. I find myself disillusioned with the whole thing; I feel helpless and outside of the discussion; I don’t feel I have a voice and neither do the people I work with. Individuals are of little relevance or consequence – it’s about the wants of corporate finance, majority shareholding institutions concerned more with money than the needs of people. Those on the margins don’t matter, dividends do!

Whilst politicians consider whether levels of profit are too high or if it should be made easier to switch supplier, what I and my colleagues know, and can evidence, is that many people are suffering real hardship. One of the services we run at Birmingham Settlement is a debt advice service and the numbers of people coming to us for advice has spiralled this year. Yesterday we had 53 people through our door seeking financial help and advice – the largest number we’ve ever had in a single day.

I would like politicians and energy company CEOs to spend time with some of the people who through circumstance beyond their control cannot afford the fuel needed to heat their homes or cook their food. We work in partnership with others such as food banks to provide support where it is most needed and I’m afraid a response we are increasingly hearing from clients is ‘there’s no point, I can’t afford the fuel to cook the food’.

I was involved in a discussion a few days ago about whether the UK was the 5^th, 6^th or 7^th largest economy in the world – it seemed to depend on which report you read; the discussion went on to whether it was right for people to be limited to three food parcels per family, irrelevant of circumstance. I was amazed that the idea of food banks now seems to be an acceptable concept, everyday language – is it really acceptable in 2013 that the second largest city in one of the biggest economies in the world has such a problem; that its own citizens cannot cook the contents of a food parcel because they have no fuel?

I am reminded of Maslow’s Hierarchy of Needs – the most basic human life needs include food, drink, shelter, warmth – how on earth can we expect people to grow and prosper if they can’t cook a meal?

Winter is almost on us and for too many this means additional hardship as they will not be able to meet the costs of soaring fuel bills; they will no doubt face the consequences of not being able to contribute to the billions handed out in dividends to the privileged few.

At Birmingham Settlement we have suggested a practical measure that could really make a difference. We are asking the energy companies to give every household access to an hours’ supply a day irrespective of debt and personal circumstance. This means if prepayment meters have no credit fuel would still be available for one hour everyday – we suggest between 12 noon and 1 pm. Energy providers (electric and gas) have the technology to make this happen. The residential supply of water cannot be legally disconnected, where as fuel is increasingly disconnected; and to the poorest families in our society. This is wrong! Profit making energy companies need to show social responsibility – support society by putting more back, and now!

Birmingham Settlement has begun an e-petition to ask the Government to legislate for the basic human right for every household to be able to cook a hot meal each day under a Fuel for Food campaign – you can support us by signing the e-petition here.

Over the last weeks we have witnessed commemoration of the March on Washington, the high-point of the US civil rights movement. A timely reminder of the difference that movements can make, but also a challenge to this generation to take action to end injustice. In 2013, racism is still a problem which pervades our society. Since our inception in 1968 Runnymede has been fighting to achieve race equality in the UK. We’ve done this through research, network building, and policy engagement. But recently, we’ve been feeling as if this isn’t enough. Race equality seems to have been filed in the ‘too difficult’ box. In order for discrimination to stop, the struggle against racism needs to be part of the public consciousness. We need to change our approach; we need everybody to not just feel that racism is not good for society, but to act to eliminate it.

Although the Equalities Act 2010 protects ethnic minorities from racial discrimination, your ethnic background still significantly impacts your life chances. In education, if you are from a Black Caribbean background you are three times more likely to be excluded from school, and data revealed by the BBC shows that 87,915 racist incidents were recorded between 2007 and 2011 in British schools. After school, youth unemployment is experienced by one in five white men, but one in two young black men. When seeking work you will have to send out 78% more job applications if you have a ‘foreign sounding’ name. On the street, you will be 7 times more likely to be stopped and searched if you are black than your white counterparts, and 2 times more likely if you are Asian. In health, black and Asian people with dementia are less likely to receive a diagnosis or receive it at a later stage than their white British counterparts. Chillingly, 106 people have been killed in racist and suspected racist attacks since Stephen Lawrence’s death in 1993.

It is everybody’s responsibility to change this. Racism is a product of society and as a society we have the power to end it. It can be solved, if we work together. We believe that it everybody makes changes in their own lives, workplaces and communities, we can cause a fundamental shift where treating people equally and accepting difference will become the norm.

This September we are launching ‘End Racism This Generation’, a movement to end racism in the UK. The key to its success will be informing people about the continued existence of racism and the damage it causes to all of us, and sharing knowledge of what works in combating it.
Fighting for racial equality is everyone’s business. End Racism This Generation will create an online platform where those who want to make change can gather, learn, and create new networks for change. We will also be hosting events all around England and Wales to connect people together and spread the message.

People will be able to pledge the action they plan to take on the End Racism This Generation website. Their pledges will be mapped by area, which will allow individuals, organisations and businesses to see what is going on around them. It will present the opportunity for people to create partnerships to end racism. Crucially, these pledges will inspire others to take actions, and show what works.

We want the pledges to be non-restrictive, no action is too small, no pledge too insignificant. We want everybody to feel empowered to end racism, regardless of the resources at their disposal. A pledge could simply be to find out more about racism in the UK or to spread the word on how to tackle it through social networks. On a larger scale, organisations could pledge to show how their work already reduces racial inequality or use the momentum of the campaign to launch new activities. Businesses can pledge to work harder to ensure employees reflect the make up of the population at all levels of the business, including the boardroom. Schools and universities can pledge to take action in ensuring equality of educational experience for its minority ethnic students. And everybody can support the campaign by a donation, by giving money, time or offering the resources at their disposal.

We want this collective action to signal a shared commitment to work towards a Britain without racism; a Britain which accepts differences between people but treats them equally in all aspects of their lives. No one person, or organisation can achieve this by themselves but together we can end it.

You can find out more about the campaign on the Runnymede Trust’s website, on Twitter and on Facebook.

Welfare reform, the ‘bedroom tax’, tougher sanctions for those receiving Jobseeker’s Allowance, reductions in council tax benefits, reductions in benefits; all happening at once with reduced funding to administer and/or advise those affected – for many the nightmare has just begun; and we haven’t even hit universal credit yet.

What seems to have been overlooked is that many people on benefits already live hand-to-mouth and change at this level is enough to upset the balance and literally send families and individuals lives into chaos; so a whole raft of changes introduced at once with more to come has been nothing short of catastrophic for many.

I’m not saying things shouldn’t change but change on this scale needs to be properly thought through and resourced; implemented at a realistic pace and most importantly, it must be fair.

The number of new food banks opening up and the caps being placed on the number of food parcels people can have shows the reality of the situation – I was on the High Street at the weekend and without moving could see four shops advertising loans or offering cash for goods – to me it’s the payday loan companies benefitting most from these changes and not the taxpayer.

Some statistics from Birmingham Settlement to demonstrate the point: last year for our biggest single advice contract we had 1200 contacts; in April and May alone this year we’ve seen 660 – that’s more than 50% of last years’ total in just two months. At the same time our funding has reduced and we have had to cut our delivery team from 12 to 8.

There has also been a significant increase in the number of people being referred from other agencies who are also struggling to cope – in the last six weeks two advice agencies near us have closed due to lack of funding.

Money advisers at Birmingham Settlement. Their time and resources are increasingly stretched.

We are advising people that they may have to wait up to three hours, sometimes more, and the fact that most people are prepared to wait says it all; some days we have to simply close the doors because we cannot see any more people.

There is also a real danger to staff struggling to maintain the service. I was in the corridor outside our offices with an adviser last week and he was stopped by an existing client seeking advice, once outside the building he was stopped again by another client – the pressure being placed on small responsive agencies (and their staff) like the Settlement is immense, and is not sustainable.

It’s interesting that Birmingham City Council recently said they had seen a 91% increase in rent arrears since the inception of welfare reform; and a couple of Housing Associations in the North East reported a 300% increase in arrears – and they have empty properties because people aren’t prepared to move into family accommodation – clearly there is a problem.

At Birmingham Settlement we see hundreds of people and it seems to me we’re penalising those who are least able to deal with the situation – it’s out of their hands.

I propose that a much fairer solution would be to send the bill to the housing provider or local authority. If this was the case, pressure would be taken off the people who literally cannot pay; whilst you could be assured the provider would work quicker to find an alternative solution or accommodation – and perhaps even plan for future needs? Obviously, there could be problems as the tenant could, in theory, be offered something totally unsuitable (think of an elderly or disabled lady with mobility needs on the top floor of a tower block), so there would need to be some safeguards. However, at least the problem would be addressed by those who have a voice or ability to influence – and it’s good to see some providers are beginning to stand up and use their position. The reality is that unfortunately our clients don’t have a voice. Who is fighting for them?

Government has said there is flexibility in the system, but the reality doesn’t seem to reflect this – and welfare changes are being applied across the board with little apparent discretion. Even if there was discretion – what allowances would be made and how would they be implemented? That’s another reason why we need to shift responsibility to the provider.

We often talk about inequality and the need to close the gap between the haves and have nots. Indeed, an independent inquiry by MPs recently concluded that the poorest and most deprived parts of the country are the worst affected by public spending cuts. Here in Birmingham we can certainly agree on that.

Last week’s spending review brought little positive news for key departments and affected individuals; the prison budget was were reduced by £180m, a 6% cut to the transport resource budget has been proposed and civilian posts on the armed forces have been cut. Some specific components of the review have great implications for charities and those rely on in their services, notably cuts to the welfare budget, local government spending and the Charity Commission’s budget, meaning that times will only get tougher for the sector.

The review sees a 10% cut to local government spending making it particularly hard hit. This comes in addition to the previous 33% real terms cuts to council budgets directly affecting their service provisions. However, Local Enterprise Partnership (LEPs) can bid for funding from a local growth fund of £2bn (lower than the £70bn recommended by Lord Heseltine in his review of economic policies), a move declared to be: “a welcome step in the right direction” by Alex Pratt, chairman of the Buckinghamshire Thames Valley LEP.

Changes to the welfare budget will likely have the greatest immediate impact on many beneficiaries of charities working with vulnerable communities. A new cap will be introduced to the welfare system affecting housing benefit, tax credits and disability benefits. Alongside the welfare cap comes a cut to the benefits of claimants who do not speak English unless they take language courses and a ‘temperature test’ for winter fuel allowance preventing pensioners living in warm countries from claiming it.

Dubbed the ‘Wonga Week’ by some, the waiting period before jobseekers are able to claim benefits will be extended to seven days from the previous three, which has been perceived as a change that could encourage greater take-up of payday loans. Payday loans have received heightened attention due to an increased reliance on their services, alongside and increase in the sheer amount of debt stemming from payday loan. On average, the average amount owed on payday loans has increased by £400 to £1657.

Particularly in light of a greater reliance on food banks and increased payday loan debt, the consequences of the welfare cap are potentially significant for both charities and their beneficiaries; as a result, analysis of this will soon be published by NCVO.

The Charity Commissions’ budget will be reduced from £21.4million to £20.4million and the department for Culture, Media and Sport will be cut by 7%.

The resource budgets for the Treasury and the Cabinet Office will be cut by 10%, whilst the Office for Civil Society will retain its funding of £56m and additional support will be provided for the National Citizenship Service.

Issues arising from cuts affecting the sector are twofold, as cuts to welfare and local government spending may lead to a further increased demand for their advice and support services, whilst the Charity Commission faces a direct cut to its funding, potentially reducing it’s ability to support and champion the sector. In the coming weeks NCVO will be working to build a fuller picture of the impact of these changes on voluntary and community organisations.

Voluntary sector irrelevance or key to a successful and inclusive economy?

When we saw the “new ideas in economics” strand of the Barrow Cadbury Trust’s Poverty and Inclusion programme [now the Resources and Resilience programme], we were surprised, and pleased. It’s long been an ironic state of affairs that charitable trusts have shown limited interest in exploring the systems by which we organise our livelihoods that cause the social problems the trusts exist to solve.

To us, it was an opportunity to research the assumption at the heart of Localise West Midlands’ mission: that in a more localised economy, more people have a stake, which redistributes economic power and resilience, reducing disconnection and inequality. Not, perhaps, a ‘new’ idea, when you consider 1960s Schumacher – but newly in need of exploration in the face of growing inequality and economic failure.

The chasm between charity and economic development thinking is mutual. There are plentiful ideas around what we have been calling community economic development: social inclusion as CSR, community-led job creation, co-ops and social enterprises, local procurement initiatives. To many economic development practitioners these are very nice projects that go into a little box labelled “voluntary sector” and have little to do with the real economy, which is about big sites, tax breaks for multinational corporations – “prostituting ourselves for inward investment” as the Centre for Local Economic Strategies‘ Neil McInroy colourfully puts it.

Our project, Mainstreaming Community Economic Development, is an attempt to take localised economies out of this little box. Firstly, to see the social potential not only of voluntary sector initiatives with social objectives, but also of private sector activity that is locally controlled and based, where the community’s participation is as owners, investors, purchasers and networkers.

And secondly to challenge what is given economic priority. Given the benefits of localised approaches, shouldn’t we try to integrate them better into our economic interventions? Shouldn’t they get a fair crack at subsidies and support structures? Shouldn’t we use cost benefit analysis to see which types of activity most maximise the returns to the local area and to those in disadvantage? It doesn’t fit into a little box, it’s just a consideration in all good decisions.

Localised economies are more successful and inclusive

In its first stage, a review of the literature evidence for the benefits of localised economies, we found good evidence that local economies with higher levels of SMEs and local ownership perform better in terms of employment growth (especially disadvantaged and peripheral areas), social inclusion, income redistribution, health, civic engagement and wellbeing.
Such economies also support local distinctiveness and diversity, which we see as positives because of their contribution to economic resilience, economic options to suit a diversity of people, sense of place and belonging, area quality, added interest and richness of experience.

Absentee landlords vs local commitment

We found that a local economy largely controlled by ‘absentee landlords’ – distant private and public sector controllers with little understanding of the local area – is a recipe for economic failure. Locally-inappropriate decisions and ‘footloose’ businesses leaving the area for better economic conditions seem to combine to weaken local businesses and create a self-reinforcing cycle of decline and exclusion.

Many of our private sector case studies showed local commitment. From Birmingham Wholesale Markets to renewable energy consultancies, they demonstrated ‘enlightened self-interest’ in understanding their interdependency with local communities. Their role in an inclusive economy can’t be underestimated. If only their voices were louder than those of absentee landlords in today’s ‘pro business’, London-centric political environment.

Mainstreaming and scaling up localisation

Informed by this and our case studies we set out proposals for a strategic approach centred on local supply and demand chains, participation and control. Taken strategically, every regeneration project, every economic development decision, every spatial plan, would be based on maximising benefit to and ownership by local people, and particularly its excluded communities.

While much can be done locally, to enable CED to scale up requires national change to decentralise economic and governmental power and make changes around policy, support services, subsidies, tax, banking, infrastructure and measures of success, creating a level playing field for indigenous economic activity.

Politically, it’s helpful that localisation approaches are inherently pro-business, but also respond to public concerns over the concentrations of wealth and power that created the 2008 Crash. As we take it forward, civil society interest, international examples like Mondragon and careful use of language may help this agenda to stay out of that little box long enough to contribute towards a better economy.