Persisting inequalities underline the poverty challenge for Government

An improving economy, falling levels of unemployment, fewer adults on means-tested benefits and higher attainment among 11-year-olds in school were among the improvements. But more than two million children continued to live in homes where no adult had a paid job, and the number of people in households with very low incomes even increased. These trends underline the huge task facing the Government’s anti-poverty strategy, whose effects are only just beginning to kick in.

Compiled by researchers at the New Policy Institute and published by the Joseph Rowntree Foundation, the monitoring report identifies the latest trends using 50 different indicators – including official statistics on income, work, health, education and housing. Comparing the latest statistics with figures in a baseline study published a year ago, it finds that:

• The number of people living in households with less than half the national average income in 1997/8 was little changed from the previous year. After housing costs, this put 14 million people below a government-recognised ‘poverty line’ including 4.4 million children. 
• Between 1995/6 and 1997/8 the number of people on very low incomes (less than two-fifths of the national average) grew by more than a million, from 7 million to over 8 million (after housing costs).
• The number of working-age adults receiving means-tested social security benefits fell by 10 per cent between 1995 and 1998. But there was no comparable drop in the number of households with children on means-tested benefits. More than 2 million children continued to live in homes where no adults were in paid work.

The researchers stress that it is too early to assess the impact of important policy changes designed to tackle poverty that have come into effect or been announced in the past nine months. 

These include the national minimum wage, the Working Families Tax Credit, increases in Child Benefit and the Minimum Income Guarantee for pensioners.

Peter Kenway, co-director of the New Policy Institute said: “Time will tell if the measures announced in recent budgets can succeed in turning the tide of poverty and social exclusion. But these figures show that an improving economy and falling unemployment are not enough on their own. As the Government’s policies for tackling these problems start to bite, poverty is at levels close to the high-water mark reached in the early 1990s.”

The Government is committed to publishing its own, annual assessment of progress in tackling poverty and social exclusion. The NPI/JRF report uses a wider set of indicators, including figures that were not available when the Government published its report in September. Indicators in last year’s baseline report have been updated by at least a year’s, and in some cases two years’, data. The main areas covered by the report are:

Income: The 1997/8 figure of 14 million individuals in households with less than half the national average income (after housing costs) compares with 5 million recorded 20 years ago. Latest figures suggest that one in ten people live in households with net incomes of £132 or less per week and that the incomes in the bottom tenth are only £4 a week higher in real terms than in 1994/5. Four out of ten lone parents have incomes below two-fifths of the national average.

Children: Some 4.4 million children were living in homes with less than half average income in 1997/8 (after housing costs) compared with an estimated 1.4 million in 1979. Inequalities in health and education are marked. For example, children whose parents are unskilled or partly-skilled are 20 per cent more likely to be born underweight than those whose parents are professionals, managers or have other work skills – and twice as likely to die in an accident. Overall educational achievement levels have continued to improve, but there are some signs that the poorest children are not sharing fully in this improvement. Pregnancies among girls under 16, as well as school exclusions, have now stopped rising.

Young adults: The number of young adults with basic educational qualifications has continued to rise. Nevertheless, 160,000 young adults aged 16 to 18 (one in 11) were not in education, training or work at the end of 1997. The number of jobless 18- to 24-year-olds fell. The number of young people with criminal records also continued to grow.

Adults: Unemployment fell from about 3 million in 1993 to under 2 million in 1999 and indicators of insecurity at work – such as the extent of temporary employment – have stopped rising. However, there are still more than 4 million adults without jobs who would like to have paid work. Health inequalities continue to increase. For example, unskilled and low-skilled women are nearly three times as likely to suffer from obesity as professional women. The number of local authority areas where premature death rates are above the national average has risen by 40 per cent since 1991.

Older people: Although occupational pensions are more common, 1.3 million pensioners continue to rely entirely on state provision. The poorest are almost twice as likely to live in badly-insulated homes – a figure reflected in 20,000 to 50,000 ‘excess’ winter deaths each year. The five years up to 1998 have seen a significant reduction of 25 per cent in the number of pensioner households who are getting any help from their local authority to live independently at home.

Communities: There is continuing polarisation between council and other 'social' housing - where more than two-thirds of heads of household ware without work - and other tenures where the figure is around one in three. More than a third of those in social housing have weekly incomes of less than £100. The poorest homes are twice as likely to be burgled as households on average – a figure that also applies to lone-parent households – but are much less likely to have household insurance. There has been no improvement for the last three years in the proportion of low-income households without a bank or building society account.

Guy Palmer, co-director of the New Policy Institute, said: “While some indicators are clearly getting better, there is no general pattern of improvement. Inequalities in health and education are, if anything, getting worse. Particularly worrying is the continuing polarisation between those in social housing and other tenures. We shall continue to track these social exclusion indicators closely to discover whether the Government's recent policy initiatives make an impact on the persisting poverty and inequality revealed in this latest report."

Note to Editors

Monitoring Poverty and Social Exclusion 1999 by Catherine Howarth, Peter Kenway, Guy Palmer and Romina Miorelli is published by the Joseph Rowntree Foundation, and is available from York Publishing Services Ltd, 64 Hallfield Road, Layerthorpe, York YO31 7ZQ (01904 430033), price £16.95 plus £2 p&p. 

A summary of findings from the report is available here.

The findings can also be viewed on the New Policy Institute Web Site www.npi.org.uk 

(Issued by David Utting, JRF Adviser, 020-7278 9665 )