Where next?

Britain in 2019 is scarred by poverty. We live in a nation with rough sleepers in our town and city centres, working families forced to turn to food banks, children and disabled people going without essentials, pensioners not asking for the help they need, and millions living in overcrowded and unfit homes.

Our social security system is in crisis. Since 2010 entitlements have been cut and the value of most benefits has fallen. The introduction of universal credit has been a disaster and – even if the new system can be made to work – it will cause many people financial hardship. And with punitive sanctions and conditions, and incompetent assessment regimes, people receiving benefits now question the fundamental fairness and humanity of the social security system.

So where do we go from here? At the start of the 2020s, more than 15 million people in the UK are on course to be living in poverty – the highest number ever. Five million of them will be children and 2 million will be pensioners: poverty remains a cross-generational phenomenon. And of the adults of working age in poverty, more than half will live in a working household and more than 2 million will have a disability.

Over the coming months, the Fabian Society will ask how a future government should set about mending social security and tackling poverty in the decade ahead. Our starting point for the debate is that ‘sticking-plaster’ solutions won’t be enough. A few tweaks to the existing benefit system to reverse the worst of the austerity cuts will not pass muster.

Instead, we need a long-term plan that starts by asking what we want to achieve in a decade or more’s time. A clear consensus should be built about how to think about and measure poverty, and a frank debate is needed on the level of ambition we should strive for. Is it realistic to aim to end poverty as we know it and ensure that everyone in the UK has living standards closer to the norm? Or, if not, what should success in the medium term look like?

We need to consider the level of support that people need and deserve in order to maintain an acceptable standard of living. That means looking at what is needed to meet all the different costs that households face – food, utilities, council tax, rent, raising children and the extra costs of disability, caring, going out to work and childcare. A consistent, evidence-based approach would look at the generosity of every component of every benefit – whether the beneficiary is a child, a pensioner or an adult below pension age.

The design principles of the social security system also need to be debated, not least because they are so different for pensioners and for younger age-groups. In 2016, in my report For Us All, I wrote that the UK faced a choice in the 2020s between either improving the generosity of its current means-tested system for non-pensioners by building on universal credit; or re-introducing a blended Beveridge-style approach that is closer to our pension system, with a far larger role for universal, contribution-based and voluntary provision.

That choice turns in part on what the public and politicians believe is fair. But it is also a question of how best to resolve a familiar ‘trilemma’ – a three-way trade-off between containing costs for taxpayers, making sure everyone has enough money for a decent life, and making work pay for people with low earnings or high living costs. In the context of evolving labour and housing markets and changing patterns of health, it is time to ask again whether we have the right balance between means-testing, universalism and contribution at different stages of our lives – and whether as a society we are paying enough.

Finally, in fleshing out an agenda for the next decade, we need to ask how to bring compassion, flexibility and competence to a social security system that so many people distrust. The practical workings of the system need to be designed around real-life, whether that’s the challenges of budgeting on a low income, the economic relationships between men and women or the daily pressures facing disabled people, carers and parents with young children.

That search for practicality should inform the process as well as the outcomes of reform. Universal credit was a ‘big bang’ change and it has proved an administrative disaster. In planning the next wave of reform, we should consider how to build on, reform and repurpose the structures that exist today.

With social security in such disarray, there is much to do. But today’s dire state of affairs also creates the conditions for thinking ‘big picture’ and plotting a new direction. Let’s imagine a Britain where poverty does not exist and then design the social security system required to bring that about. If the next government is to do one thing, this should be it.

This blog is the first in our Poverty and social security: where next? series. Read more about the project here.

Read the concluding report in the project here.

Photo credit: byronv2