2012 review – are we looking at a decade of destitution?

A decade of national debt risks being followed by a decade of destitution, says Julia Unwin in her 2012 review.

The reality and the politics of poverty look increasingly desperate and frightening as 2012 comes to a close, says Julia Unwin. So how can we change this?

As we move towards the end of the year, I sense a growing outrage.

A decade of national debt risks being followed by a decade of destitution. Food banks open across the country, teachers report children coming to school hungry; advice services and local authorities prepare for the risks attached to welfare reform. There is evidence of a rising number of people sleeping rough, and destitution is reported with increasing frequency. And local authorities across the UK face unprecedented budgetary pressure.

The political rhetoric divides poor people against very poor people, and increasingly repeats the false notion that people who are poor can readily be divided into the mirage of ‘strivers’ and ‘shirkers’. This same rhetoric pits working families against those unable to find work, the hard pressed against the very poor, the settled against the incomers, and consistently and repeatedly ignores the facts. At a time like this it is easy to be swept along by outrage.

Outrage is not enough. We need to recognise the grim reality of grinding poverty and destitution. We need to understand what is really happening, make sure it cannot be ignored, and point consistently, creatively and credibly to the things that can be done. JRF's role is to do just that.

There is no doubt that working people will be hit by recent measures. For the first time, more people in poverty are in working households than workless households, excluding pensioners. This is a scandal of our time. But it’s also true to say that this is not a static group. There is a vicious circle, which means people move in and out of work, remaining poor, remaining benefit dependent as they struggle to improve their lives. That is the reality of people’s experience.

The fact that one in six people, almost five million, have claimed Jobseeker’s Allowance in the past two years is evidence of this reality. The insecurity and weakness of the labour market at the murky end means it doesn’t take much for a ‘striver’ to become a so-called ‘shirker’. The truth is, those out of work are striving – striving to find a job, an opportunity to make life better, one that is out of grinding hardship. And for those who are not in work the reality is challenging indeed. There are parts of the country where employment of any sort is scarce. No amount of striving will reverse that.

The longer-term picture is not a comforting one. The future prospects for growth seem vanishingly small, and without growth there will be little change to poverty levels. In fact, by 2020, the hollowing out of the labour market and changes to the welfare system mean one in four families will be in poverty in just eight years’ time. We need a jobs market that means work offers quality, pay and progression, and a pathway out of poverty.

One in four families in poverty is a worrying prediction as a decade of destitution and squeeze on living standards takes hold. Since 2008 alone, working families say they need a third more to make ends meet – a combination of cuts to tax credits, prices racing above inflation and stagnant wages means the increasing cost of essentials, such as childcare and travel, mean wages are quickly eaten up. We’re also seeing emerging trends related to housing – its high cost, lack of affordability and availability, and reductions in the support available to pay these costs. JRF’s housing and poverty programme will be launched in the New Year. It will examine the link between the two and report back on how these problems can be alleviated.

Our systematic review of spending cuts on local authorities showed the most deprived local authorities have been hardest hit by the cuts. It also found conflict within local authorities over whether the needs of vulnerable people should be prioritised. Analysis of the patterns of spending cuts show greater cuts in the most deprived authorities, compared with the most affluent.

However, there is hope. The Living Wage campaign is having significant successes. It’s no panacea, but it is a hugely important start on the journey of restoring dignity to work. Measures such as raising the income tax threshold and the improved tapers as part of Universal Credit will make life better for some people – but there are major design flaws in the system that need resolving to ensure welfare is a ladder, and not a trap.

JRF has launched a major programme of work to develop anti-poverty strategies for the whole of the UK. This non-partisan approach, designed to build consensus, share visions and develop evidence-based responses is our contribution to ensuring that 2013 is the year when we start to see real change and improvement, and are left with something more constructive, and more lasting, than simple outrage.