Destitution by design

A leading anti-poverty thinktank has called on the UK Government to call time on destitution. There’s only one problem – ‘flagship’ government reforms to social security helped fuel the rise of hunger and hardship in the first place

By Mark Cantrell

Migrant Mother — Image courtesy of Pixabay

THE British Government is deliberately plunging some of the country’s poorest and most vulnerable people into destitution – and it must stop.

That’s more or less what anti-poverty thinktank, the Joseph Rowntree Foundation (JRF) declared earlier this month, when it published new research looking at the causes and mechanisms that allow people to fall – or even nudges them – into destitution “by design”.

The organisation claims over 1.5 million people in the UK experienced destitution at some point during 2017: a figure that includes 365,000 children.

They are the victims not only of outrageous fortune – but also of official policy, chief among them changes to a social security system that was originally devised to alleviate such instances of extreme hardship. Now, as the JRF indicates, it has become one of the primary vehicles driving people into destitution.

“Many of us rely on public services such as social security when hit with unexpected circumstances like job loss, relationship breakdown or ill-health,” said Campbell Robb, the JRF’s chief executive. “Yet actions by Government, local authorities and utility companies are leading to ‘destitution by design’: forcing people into a corner when they are penniless and have nowhere to turn. This is shameful.”

For the purposes of the study, the researchers classed people as destitute if they or their children lacked two or more bare essentials over the previous month because they couldn’t afford them, or that their income was so low that they were unable to buy them for themselves. They include:

Shelter: where people have had to sleep rough for one or more nights
Food: where people have had fewer than two meals a day for two days or more
Heating: where people have been unable to heat their home for five days or more
Lighting: where people have been unable to light their home for five days or more
A lack of appropriate clothing and footwear
Lacking basic toiletries such as soap, shampoo, toothpaste and a toothbrush

These are bare essentials we all need, and frankly most of us can afford to take for granted, but for those in the JRF’s report, they have effectively become luxuries that can be lost not only to misfortune, but also on the whim of officialdom.

Tellingly, perhaps, there was a 25% decline in levels of destitution between 2015 and 2017, with a reduction in the use of punitive benefit sanctions considered a “significant factor” behind this fall.

Punishment detail

SANCTIONS are part of the new Universal Credit regime, which is being gradually rolled out across the UK. The welfare benefit replaces a number of so-called legacy benefits, combining them into one monthly payment.

However, it comes with what some consider a draconian penalty system – the sanctions – that deprive people of subsistence benefit payments for weeks at a time over a range of supposed ‘infractions’. For many, the sanctions regime has come to epitomise a callous and inflexible system.

Ironically, Universal Credit is sold on the basis of its flexibility, supposedly rising and falling seamlessly as people’s circumstance change or they move into and out of work. It was all about ‘making work pay’ and overcoming the drawbacks of the welfare benefits it replaced. Yet, as it has moved from the ‘drawing board’ to piloting and implementation, the amount it pays has been cut, while its supposed positives have been whittled away.

The shortcomings and the cruelties of Universal Credit have been laid bare in report after report in recent years. The latest – from government spending watchdog, the National Audit Office (NAO) – is a little harder for ministers to ignore than most, but even so the Department of Work & Pensions (DWP) is intent on sticking to its guns.

Coming on the heels of the JRF’s destitution report, the NAO offered a scathing indictment not only of a poorly implemented system, but of ministerial indifference to its impact on the ground.

In the NAO’s view, Universal Credit offers poor value for money. What’s more it is uncertain if it ever will. Not only has it taken “significantly longer” to roll it out than intended, it may cost the State more than the benefits it replaces. And for all that, it is unclear what overall impact it is likely to have on boosting employment.

Furthermore, where it has been implemented, Universal Credit is causing hardship for a significant minority of claimants. The NAO highlighted delays in payments, rises in rent arrears, deepening debt, and sudden increases in demand faced by local foodbanks.

“The [DWP] has kept pushing the Universal Credit rollout forward through a series of problems,” said Amyas Morse, head of the NAO. “We recognise both its determination and commitment… [but]we don’t think DWP has shown the same commitment to listening and responding to the hardship faced by claimants.”

Citizens Advice said it wasn’t surprised by the NAO’s findings. “While Universal Credit is working well for some, more than a quarter of a million people are expected to wait longer than five weeks for their first full payment. This puts them at risk of falling behind on bills and getting into debt – a heavy price to pay for a system that isn’t working properly,” said Gillian Guy, the organisation’s chief executive.

“Since Universal Credit was first introduced, we have helped tens of thousands of people who have struggled with the new system. Many of those are finding it hard to make their claim, which can further hamper their chances of receiving their benefit on time.”

Catherine Ryder, head of policy at the National Housing Federation, the trade body that represents England’s housing association landlords, added: “This report confirms what housing associations know, that Universal Credit is causing increased financial hardship for some tenants, and higher rent arrears for housing associations.

“There are serious problems with the system’s design and implementation requiring urgent action. People need better support to make and manage claims and people should not be left without enough money to live on – the current harsh level of deduction from already low levels of benefit are pushing families into hardship.”

Cutting edge

DESPITE criticism, the Government remains unmoved. In the wake of the NAO’s report, work and pensions secretary Esther McVey told MPs in the House of Commons that Universal Credit is a “unique example of great British innovation”.

“Universal Credit is a brand new benefits system,” she said. “It is based on leading-edge technology and agile working practices. Our strategy is based on continuous improvement – listening, learning and adapting our delivery as the changes roll out across the country.”

Responding to the NAO report directly, McVey added: “Our analysis shows that Universal Credit is working; we already know it helps more people into work – and stay in work – than the legacy system…

“Universal Credit is projected to help 200,000 people into work, adding £8 billion per year to the economy when it is fully rolled out. These are conservative estimates, based on robust analysis that has been signed off by the Treasury. And at a user level, we know that 83% of Universal Credit claimants are happy with the service they receive.”

But a study commissioned by the DWP reveals that for whatever gains the Universal Credit is delivering, it is coming at a heavy cost – with a significant proportion of people failed by the system – or discarded, depending on how you want to look at it.

In the DWP’s Universal Credit Full Survey, published in June, the report reveals:

While 53% of claimants were keeping up with bills and credit commitments three months into their claim, 44% were falling behind and experiencing real financial difficulties. At eight to nine months in, 57% were keeping up, while 40% were falling behind or experiencing difficulties
Eight or nine months into their claim, half of those claiming Universal Credit had to obtain additional funds in the three months prior to them taking part in the survey. Of these, 33% had received money from family and friends, 13% received an advance from the DWP, and 11% gained or extended a bank overdraft. Other sources included charities, payday loans, doorstep lending, credit cards or bank loans
For those claimants receiving a contribution towards their housing costs as part of their Universal Credit payment, 36% were in rent arrears in the first three months of their claim. That rose to 37% eight to nine months into the claim. Of those in arrears, 65% said they had fallen into debt after they made their Universal Credit claim
Of those in arrears at three months, 71% were still in arrears eight to nine months into their claim, while 44% said the amount they owed had grown larger (compared with 29% who said it had reduced and 27% who had caught up)

Reacting to this survey, Alison Garnham, chief executive of Child Poverty Action Group (CPAG), said: “The DWP’s own survey findings show Universal Credit is a dismal failure for a large number of people who rely on it. It is clear that there are still many people who months into their claim are being left with too little to live on and who face work-related requirements that don’t take their commitments into account. It is also all-too apparent that an online-only system cannot work for everyone. People should have the opportunity to claim their entitlements in face-to-face settings, if they need it.

“Universal Credit once had strong poverty reducing potential but big funding reductions have meant it is failing to achieve its original aims. Many of its design faults have been allowed to go uncorrected. Unless funding for Universal Credit is restored and its design revisited, this once flagship benefit will continue to fail.”

Social security

IN a roundabout way, that brings us back to the JRF’s report. Given the hardships that Universal Credit is delivering, it is little wonder that destitution and hunger has become an urgent concern.

“Last year our network of foodbanks provided over 1.3 million emergency supplies to people, so our volunteers see first-hand the effect of benefit problems, debts or being unable to afford the very basics has on people’s lives,” said Emma Revie, chief executive of charity, the Trussell Trust.

“No one should face hunger or destitution in the UK and we have a responsibility to each other to make sure everyone is able to cover the cost of food and housing, especially groups of people we know are most likely to need a foodbank: people with health conditions or a disability, families and single parents.

“The findings [of the JRF’s report] are stark – but they also show a way forwards. The decline in destitution due to a fall in benefit sanctions shows just what an impact our benefits system could have in protecting people from hunger, so it only makes sense to ensure that it provides adequate financial support whenever it’s most needed. If we’re to prevent people who are currently struggling to stay above water from going hungry or destitute, we must make sure everyone has enough money coming in to cover essential costs.”

Food was cited as the most-commonly lacked item, according to the JRF’s study, with 62% reporting that they had gone without over the past month. Nearly half, 47%, had lacked basic toiletries, 46% had lacked suitable clothing, and 42% had gone without heating. One in five were unable to light their home, while 16% had recently slept rough.

Unsurprisingly, this takes its toll on health and well-being: depression, severe stress and anxiety were commonly reported, with a few participants in the study admitting they’d felt suicidal. The experience of destitution hit confidence hard, leaving them dispirited and resigned: not exactly useful traits for finding a job, it must be said.

“It is clear from the people we spoke to that destitution has a huge impact not only on the practicalities of life but on people’s dignity,” said the report’s lead author, Professor Suzanne Fitzpatrick, of the Institute for Social Policy, Housing & Equalities Research (I-SPHERE) at Heriot-Watt University,

“Destitution has many different causes such as sickness and ill health, debt, or even the direct result of social security policy, especially the sanctioning regime. Most often it’s the build-up of problems associated with deep and ongoing experiences of poverty.

“While no-one should ever have to be destitute, we estimate that levels have declined by around a quarter since 2015. This is good news. It’s likely that this has been driven by a decline in benefit sanction rates and falling unemployment and immigration.

“However, the apparent higher levels of sanctions in Universal Credit are a sharp warning that destitution could increase again as the new benefit expands in the coming years. Rebooting and improving the funding for local welfare assistance in England is one element of a package to provide crisis support that people in destitution need.”

Campbell Robb added: “Social security should be an anchor holding people steady against powerful currents such as rising costs, insecure housing and jobs, and low pay, but people are instead becoming destitute with no clear way out.

“To be destitute doesn’t just mean getting by on very little, it’s losing the ability to keep a roof over your head, eat often enough, or afford warm clothes when it’s cold. You can’t keep yourself clean or put the lights on. This shouldn’t happen to anybody, let alone over one and a half million people in the UK.

“It doesn’t have to be this way. The reduction in benefit sanction rates has meant that some welcome headway has been made, but there is a real risk that once Universal Credit is embedded across the country, more people could again be at risk unless we make changes.

“We all want to live in a society where we protect each other from harm, and we need to put things right to protect people from this degrading experience. We can start by redesigning our social security system so that it provides the basic protection people need.”

Indeed, as was its founding purpose as part of the Welfare State, all those decades ago. Sadly, we now have a Government that apparently can’t quite make its mind up; is the social security system a safety net or a penal institution with hardship and destitution but a means of enforcing compliance?

Either way, a system built to mitigate and even challenge inequality appears to have been transformed into a fully weaponised rampart for the defence of a growing social divide. Or, as Esther McVey would have it, we’ve got ourselves a great British innovation…

Mark Cantrell, Stoke-on-Trent, 24 June 2018

This article was first published on Medium, 27 June 2018.