CIH North East Lunch & Learn

The context for Universal Credit

Brian Robson, Policy & Research Manager

brian.robson@jrf.org.uk

@jrfbrian

What we do

Deliver

services

Ifluence

social

change

JRF’s housing & poverty work

Aims

– Explore relationship between housing and poverty

– Identify realistic and effective housing solutions for people living

in poverty in the UK

Three strands:

– New development framework for affordable housing

• Joint with NHF – led to Living Rents

– Housing and poverty over the life course

– Extreme housing exclusion

Where are we now?

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Who is living in poverty?

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Who is living in poverty?

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Who is living in poverty? (2)

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Where do people in poverty live?

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Where do people in poverty live? (2)

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How has the labour market changed?

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How has the labour market changed?

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How has the labour market changed? Dynamism.

- 2.7 million moves between

inactivity, employment and

unemployment in first two

quarters of 2014

- Over a four year period, 38% of

low paid workers will experience a

period of unemployment

How has the labour market changed? Polarisation.

20%

25%

30%

35%

40%

45%

50%1

99

3

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

professional or managerial semi-skilled low-skilled

Source: IFS slide pack for HMT Labour Market Conference October 2013

What’s happened to incomes? They’ve fallen.

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Real term wages falling

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A note about costs

- Low income households spend

around ¼ of their income on food,

fuel and water

- CPI increased by c.20% in the five

years to 2014 – but food +30%

and fuel +60%

So, where are we going?

Poverty in 2020?

IFS Forecast:

• Fall in child poverty to be reversed

• Continued pressure on working age

non parents

Why?

• Tax and benefit reforms

– In particular CPI indexation

Housing and poverty : the situation in 2040

• JRF commissioned modelling

• Quantitative longitudinal study –

avoids ‘snapshots’

• Examined 5,000 ‘housing pathways’

• Modelled against demographics,

house prices, etc

• Created forecast of housing and

poverty by 2040

jrf.org.uk/housing

2040: housing cost projections

2040: housing cost projections

• Real household income

+40%

• Private rents up 90% in

real terms

Social rents:

• Up 40% (if CPI + 1%)

• Up 160% if move to

affordable rents

continues

2040: poverty projections

2040: containing poverty?

• Possible, but means:

– CPI + 1% in social sector

– Housing benefit continues to meet

housing costs (£6.4bn extra)

– Housing supply reaches 200,000

units per year by 2040

– The proportion of social rented

housing does not decline

jrf.org.uk/housing

2040: challenges for landlords

Focus on social mission clearly

separates social landlords from their

private sector counterparts…

But:

• Poverty rarely mentioned directly

• Who is affordable rent for?

• Who do social landlords prioritise?

• Tension over supply vs rent levels

jrf.org.uk/housing

To conclude…

JRF strongly supportive of principles behind Universal Credit.

But …

• It can’t lower poverty on its own – need a comprehensive anti-poverty strategy

• Needs to be joined up with industrial and labour market policies

• Other welfare reforms not well-integrated – e.g. Benefit Cap, Council Tax Benefit

• Sanctions regime still too severe

Thank you!

Brian Robson, Policy & Research Manager

brian.robson@jrf.org.uk

01904 615 936

@jrfbrian