Policy and Research – latest news

We are providing a summary of the latest news and policy developments to keep you up to date with what is happening across the UK.

September 20th, 2022

Almost 400,000 have exited the jobs market with long-term health problems since early 2020, ONS says. Read more.

Around two million children will be hit by a cruel government ruling rejecting a benefit deduction shake-up as energy prices rocket. Read more.

The number of children in Manchester who are eligible for free school meals has risen by nearly 14 pc in 18 months as the total topped 38,000 last year. More than two in five children in the city were entitled to free school meals in May 2022 when the last school census was completed by Manchester City Council. Read more.

Child poverty campaigners are urging the government to reconsider a proposal to pause deductions to benefits this winter to ease the financial pressure on struggling families. Read more.

Cost-of-living crisis: How to help your employees. Read more.

Research developments

78% of workers paid below the real Living Wage – 3.7m workers nationally – say the cost-of-living crisis is the worst financial period they have ever faced. Read more.

Half of Britons (49%) think a great deal or fair amount of period poverty exists in the UK, including 38% of men and 59% of women. Read more.

The pension adviser commissioned an independent survey of 1,254 adults and found 37per cent of those in work believe the cost-of-living crisis has made retirement impossible for the foreseeable future. Read more.


September 13th, 2022 

Government announces Energy Price Guarantee for families and businesses while urgently taking action to reform broken energy market. Read more.

More than one million more people will be forced into poverty this winter, pushing UK deprivation levels to their highest for two decades – even if the government freezes energy. The Legatum Institute warned the number of people in poverty will rise from 13.9million in 2019/20 to 15.2million in 2022/23 if energy bills stay at this summer’s levels. Read more.

UK families and individuals are facing the biggest energy crisis-driven income squeeze in Western Europe. That’s according to analysis by the International Monetary Fund (IMF) which suggests the cost burden between poor and rich households is far more uneven in Britain than in any other country in Europe. Read more.

Cost of living crisis: what governments around the world are doing to help. From cancelling student loan debt to raising minimum wage, different strategies aim to reduce effects of soaring prices. Read more.

Universal free school meals begin in Wales for the youngest children. Read more.

The disadvantage disparity index reached 3.21 this year, up from 2.91 when exams last took place in 2019 and its highest level since 2012, revealed a Department for Education analysis released on Monday. The figures, based on the key stage two exams (or Sats) results of 11-year-olds in reading, writing and maths, support previous findings that poorer children were disproportionately affected by learning loss after lessons moved online in March 2020. Read more.

Cost of energy crisis piles more pressure on UK’s National Health Service and social care. A Freedom of Information (FOI) request by the Metro newspaper found that Manchester University NHS Foundation Trust, one of the busiest in the country, expected its energy bills to rise by £4 million in the next financial year. Read more.

Research developments

The TUC believes the policy and design of Universal Credit are fundamentally flawed. They believe we need a replacement for Universal Credit. The TUC set up an informal working group of union representatives and experts to examine what a replacement for the Universal Credit system could look like. Read more.

New research shows that minority ethnic workers in the UK are disproportionately paid below the real Living Wage: 33% of Bangladeshi workers, 29% Pakistani workers and 25% Black workers are earning below the Living Wage, compared to 20% of White British workers; Over half (56%) of minority ethnic workers said they had been discriminated against at work, with over a third (34%) having been passed up for a promotion due to their ethnicity. Read more.

The Trussell Trust has published new research highlighting the devastating impact the cost-of-living crisis is having on people forced to survive on the lowest incomes. The research, a YouGov survey of 1,846 people in receipt of Universal Credit during August 2022, found more than two million people had skipped meals across the previous three months to keep up with other essential costs. Read more.


September 6th, 2022

A survey of more than 2,000 UK adults found 23% would do without heating over the winter months. That figure was even higher for parents with children under the age of 18, with 27% saying they would be forced to leave the radiators cold. Read more.

Analysis by Crisis finds that the outgoings of the lowest income households – those earning on average £12,650 – would exceed their average monthly incomes by a third. This is based on an energy price cap of £4,500.In the worst-case scenario, the analysis suggests that at least 1.7 million renting households on the lowest incomes will be spending on average 133% of their monthly income on rent, food and energy in January, pushing many to the brink of homelessness and financial destitution. Read more.

The latest Deadline to Breadline report from Legal & General has found UK households’ financial resilience has shrunk by 21% since 2020 (from 24 days to 19 days). People overestimate (by nearly six weeks – actually 41 days) how long they could fund basic living costs (such as housing costs, loans/ credit card repayments, utility bills and food) if they lost their income. Read more.

Data from the Bank of England showed that the annual rate of credit card borrowing was 13 per cent higher in July than a year before. The jump, the biggest since October 2005, comes as wages fail to keep pace with inflation, which has already hit 10 per cent, with some investment banks suggesting it could roughly double by the turn of the year. Read more.

Under-24s receiving universal credit rose from 26,392 new applicants in June to 39,007 in July, the highest jump so far this year for the 16 to 24 age group. That figure is almost 8,000 higher than the previous highest total of 31,353 recorded in February. Read more.

Research

Fuel poverty, cold homes and health inequalities in the UK -This report reviews the evidence on both the direct and indirect impacts of fuel poverty and cold homes on health; the inequalities in who this effects the most, and the relation between health inequalities and climate change. The report makes the case for prioritising reducing fuel poverty through policy suggestions at both the national and local level. Read more.

Households where the mother is aged 25 or under are one of the six priority family groups highlighted as being at a higher risk of poverty. Over half (55%) of children in households with a mother aged under 25 were in relative poverty in 2015-18, compared to 24% of children overall. Read more.

The Resolution Foundation thinktank said soaring energy bills would cut household incomes by 10% and push an extra 3 million people into poverty. Read more.

The social innovation foundation commissioned Opinium Research to survey 5,000 UK parents between August 18 and 22.It believes it is the largest survey of UK parents since the start of the pandemic in January 2020. The polling found 74% were concerned about paying for gas and electricity, while two-thirds (67%) were worried about paying for food and petrol. Worries were highest among parents earning the least – with 82% of parents in households earning £20,000 or less worried about paying for gas and electricity and 76% worried about paying for food. Read more.


August 30th, 2022

One in five schools with the poorest students said child hunger had increased in their community over the past year – and more report higher levels of poverty – polling seen by i revealed Read more.

Almost all teachers in the survey admitted that some of the children in their care need more basic hygiene items, as currently parents are having to pick between food and soap. More than three quarters said that hygiene poverty is a serious issue they see repeatedly in UK classrooms – and worry it could prevent children from reaching their potential at school. Read more.

Households in Great Britain face a leap in energy bills from October after the regulator raised the energy price cap, taking the average gas and electricity bill to £3,549 a year. Read more.

Britain’s independent brewers have urged ministers to step in to save the sector, as research revealed more than 70% of pubs do not expect to survive the winter if nothing is done to ease energy costs. Read more.

Youth homelessness charity Centrepoint points out that the new cost of an average energy bill is more than the amount of universal credit a young person aged under 25 receives (£3,183) in a year.  Centrepoint says its own research has shown a quarter of homeless young people have £20 or less of monthly income left after rent and bills and warn that the latest energy price rises, alongside other rising costs of living, will leave many struggling to pay for food and other essentials. Read more.

Already, 800,000 children living in poverty in England do not qualify for free school meals, according to the Child Poverty Action Group, and now headteachers are bracing for rising numbers from homes that cannot afford to feed them properly. Read more.

There are now 1.08 million people borrowing from a loan shark, recent research from think tank the Centre for Social Justice shows. This is over 700,000 more than the official estimate. This increase occurred before the cost-of-living crisis and dramatic rise in fuel costs. Read more.

Research developments

New research by Sense reveals that higher costs for food and energy this year have put nearly three quarters (72 per cent) of families with a disabled child or adult into debt, with more than half (55 per cent) admitting to borrowing money from friends and family. Two in five (40 per cent) say they will go without food to save money, with more than three quarters (77 per cent) saying the pressure is affecting their mental health. Read more.

More than half (58%) said it was having a ‘severe’ impact on the lives of people accessing service, with a further 33% saying the effect was ‘significant’. Dozens of comments left by the 253 survey respondents, about two-thirds of whom said they work in children’s services, made reference to rising food bank use. Some warned that local food banks were running out of supplies due to sharply increasing demand and the wider public no longer being able to afford to donate as much. Many others cited households facing desperate choices between heating and eating, with poverty leading to deteriorating housing conditions and for some the risk of homelessness.

“[The crisis is affecting] service users massively – most were already experiencing poverty before, now they are in dire straits,” one social worker said.  In all, 86% of survey respondents said they expected to see a large increase in demand for services over the next 12 months as winter arrives and the crisis bites even harder. Read more.


August 23rd, 2022

How to tackle the UK cost of living crisis – four economists have their say. This article highlights opinions from academics ranging from price controlling and winter rationing to commitment to quick implementation to protect the most vulnerable. Read more.

Research developments

The long squeeze: rising inflation and the current government support package. As poorer households devote more of their spending to energy, this means that the inflation rate the poorest quintile will experience is expected to rise to 18 % in October, compared to 11% for the richest quintile. Read more.

This bulletin contains highlights from official statistics on claims, starts, people and households (including payments) on Universal Credit for England, Scotland, and Wales (Great Britain).

Key findings

  • 9 million children in 2.1 million households with children were receiving Universal Credit as of May 2022, compared to 3.8 million children in 2 million households in February of this year.
  • Of children living in households on Universal Credit, 29% were aged 0-4 (1,127,023), and 34% were aged 5-10 (1,334,299), meaning that 63% of children living in households on Universal Credit were primary school age or younger.
  • 71% of families with children on UC – more than 1.5million households – are single-parent families.

Read more.

Most households are underestimating the massive energy price rises predicted in the coming months with some even believing they will fall, new research shows. Read more.

According to the latest ONS report, rising food prices are the biggest contributor to the alarming increase. There was an overall increase of 2.3% between June and July 2022, taking food annual inflation rate to 12.7% in July 2022, up from 9.8% in June. This has been fuelled largely by price rises for basics such as bread, milk, cheese and eggs. Read more.

Two-thirds of UK families could be in fuel poverty by January, research finds. The research shows 18 million families, the equivalent of 45 million people, will be left trying to make ends meet after further predicted rises in the energy price cap in October and January. An estimated 86.4% of pensioner couples are expected to fall into fuel poverty, traditionally defined as when energy costs exceed 10% of a household’s net income, and 90.4% of lone parents with two or more children. Read more.

This report looks at education inequalities, it highlights how the UK education system preserves inequality.

  • People with lower levels of qualifications are also more exposed to slow earnings growth over their lives, with less opportunity for pay progression throughout their careers. Strikingly, the most common annual salary for low-educated 45- to 50-year-olds (i.e. those with qualifications at or below GCSE or equivalent) is between £15,000 and £20,000 – the same as for 25- to 30-year-olds with those qualifications.
  • 16- year-olds who are eligible for free school meals are still around 27 percentage points less likely to earn good GCSEs than less disadvantaged peers. Children from disadvantaged backgrounds also make slower progress through secondary school: in the 2019 GCSE cohort, just 40% of disadvantaged children who achieved the expected level at age 11 went on to earn good GCSEs in English and maths, compared with 60% of their non-disadvantaged peers.

Read more.

Interesting findings about the impact of the Scottish Government Scottish Child Payment which households get in addition to child benefit.

The findings of this latest evaluation show:
Scottish Child Payment and its eligibility criteria are well understood,
Scottish Child Payment is taken up,
the application is clear and easy,
applications are processed in a timely manner,
awareness is raised about other forms of support, and
clients feel they have been treated with dignity, fairness and respect.

The Scottish Child Payment is set to increase to £25 per week and be rolled out to all children up to 16 years old by the end of the year. Read more.


August 17th, 2022

New cost-of-living initiative announced by the government

The government has launched Help for households a scheme that will see major businesses such as Asda, Amazon, and Vodafone over the summer holidays and through to Christmas provide discounts and new deals designed to support struggling families. For example, Asda is extending its £1 café meal for children aged 16 and under, seven days a week and no minimum adult spend is required.

While we welcome initiatives aimed at helping struggling families, the latest announcement is not a step in the right direction towards genuine solutions that can help with the rise in costs and bills. Launching the initiative, Boris Johnson said: ‘This won’t solve the issue overnight but it’s yet another weapon in our arsenal as we fight back against the scourge of rising prices and inflation.’

The initiative will not resolve anything, rather it demonstrates the worrying reality that the government is not doing enough to help low-income households. At GMPA, we believe that to tackle the widespread and growing poverty serious government intervention is required to get more money into people’s pockets.

GMPA is calling for urgent government action to address poverty including:

  • Reversing the £20 per week cut to universal credit
  • Increasing all benefits and pensions in line with inflation
  • Scrapping the benefit cap and two-child limit on children’s benefit
  • Strengthening local welfare assistance schemes
  • Introducing a national anti-poverty strategy

Cost-of-living support is already out of date

Two recently published Select Committee reports have raised concerns about the adequacy of the government’s cost-of-living support.

The Work and Pensions Committee’s inquiry into the cost-of-living report echo’s our calls for longer-term support and investment in the social security system and local welfare provision. Some of the recommendations included: increasing the speed of uprating benefits whilst pausing deductions from benefits, reviewing the appropriateness of continuing to rely on short-term funds, development of a new strategy to boost pension credit take up, and ensuring local authorities are well supported to deliver the discretionary funds.

Similarly, the Business, Energy and Industrial Strategy published a report emphasising that the scale of the upcoming winter energy price increases has meant that the May 2022 support package is insufficient.

A number of other recent reports have highlighting growing pressures facing low income households and widening inequalities.

  • A survey by arbrdn Financial Fairness Trust and the University of Bristol reveals that one in six households (4.4 million) are now in ‘serious difficulties’, compared to one in ten (2.8 million) in October 2021. Of those 4.4 million in serious financial difficulties, to make ends meet 71% have reduced the quality of food they eat, 36% have sold or pawned possessions and 27% have cancelled or not renewed insurance.
  • The impact of rising inflation is geographically unequal, a report by the Centre for Cities highlights that inflation is up to 30% higher in cities in the North. Findings from the report revealed that the inflation rate in Manchester in May 2022 was 10.1% whereas, in London and Cambridge, it was 8.8%.
  • A study by the Trade Union Congress (TUC) indicates that the number of children growing up in poverty in key worker households has increased by 65,000 in the last two years, to nearly one million. The North West has the second highest rate of child poverty in key worker households in the UK. 3 in 10 (29%) key worker households in the North West have children living in poverty.
  • According to a report from the University of Edinburgh’s Smart Data Foundry economic inactivity rates have risen a third among the over-50s since 2019, and people aged 50-54 face double the financial vulnerability risk than those aged 70-74. The report highlights that a combination of lack of employment opportunities, poor social security support, inadequate guidance on pensions, and the cost-of-living crisis is leading to long-term financial insecurity for many.
  • The Joseph Rowntree Foundations’ recent report has shown the impact of a decade of stagnant economic growth and a weakened social security system. Between 2002/03 and 2019/20 the risk of living in very deep poverty has: increased by over half for people living in large families (three or more children), to reach 18%.  Increased by a third for people in families with a disabled person, to reach 15%, and increased by a third for people in lone-parent families, to reach 19%.

The cost-of-living crisis will continue to intensify as inflation soars and government support lags. Organisations and campaigners must continue to call on the government to do more to tackle the harsh economic realities for the most vulnerable.

 

i3oz9sPolicy and Research – latest news