Welfare inequalities revealed by Covid crisis show why UK must modernise and 'future-proof' welfare state, says IPPR
Think tank launches year-long review into future of the welfare state led by high profile figures including Bishop Rose Hudson-Wilkin and Lord Heseltine
The Covid-19 crisis has exposed deep failings in the UK’s welfare system which should be addressed as part of a long-term plan to rethink and “future-proof” the welfare state, according to a new IPPR report.
Without this, the report argues, the welfare system will be equally unprepared to deal with likely shocks in the “decades of disruption” that lie ahead – including climate and environmental breakdown, rapid growth in of automation, further pandemics and a rapidly ageing population.
Government financial assistance has been decisive in protecting many people’s businesses and livelihoods during the Covid-19 crisis, the report says, but the crisis has highlighted many key failings which threaten to widen inequality further, including:
- Lack of sick pay for an estimated two million workers who do not earn enough to qualify - largely those on zero hours or insecure work contracts. And at just £94 a week this has not been high enough to prevent some of those who are sick from going to work – including in care homes.
- The need for emergency rule changes to increase the Universal Credit baseline payment for a single person over 25 from £317.82 to £409.89 per month to make it more fit for purpose during the pandemic. IPPR calculates that had the recent uplift been in place since 2015, the UK would have entered this crisis with 500,000 fewer people in poverty.
- Stark disparities between the protection given to those covered by emergency government schemes and those who are either ineligible, lose their job or are already unemployed – all forced to rely on Universal Credit.
- Failure to recognise the increase in unpaid care hours provided during the crisis, estimated at an extra 10 hours per week for those who are carers, which is largely provided by women.
People in the UK have experienced a great “risk shift” over recent decades, the report argues, as governments have cut funding for collective welfare provision such as higher and further education, social care and social security, and limited access to them. Some employers have similarly passed risk to individuals through alternative contracts that reduce entitlements such as parental leave, holiday and sick pay.
As a result, the costs of ill health, unemployment, becoming a parent or having a disability have increasingly been borne by individuals rather than by employers or the state, compared with 40 years ago. Combined with a decade of disinvestment in the welfare system this shift has resulted in five “social deficits” which, IPPR says, weaken our ability to withstand disruptions:
- Health - The slowdown in the lengthening and quality of life experienced across the UK, and growing health inequalities up and down the country. There is a life expectancy gap between people in the best and worst performing areas in the UK of 9.9 years for men and 7.8 years for women.
- Care - Unequal access to, quality of and cost of the care people receive across their lives, from childcare to old age, and inequalities in who provides it. An estimated 1.5 million older people in England are going without the care they need and are more likely to be from disadvantaged backgrounds.
- Skills - The growing number of people trapped in low-pay, low-skill jobs at the same time businesses suffer from ‘skills gaps’ and low productivity. The lowest paid tenth of the workforce saw their incomes before housing costs stagnate or fall over the eight years to 2019, and the number of semi-skilled roles has fallen, making it harder for those with lower skills to progress
- Security - The rise of low pay, poverty and economic insecurity which results in many going without the basic goods and services needed for a good life. More than two thirds of new employment since the last recession has been in self-employment or jobs that are on a part-time, agency or zero-hours contract, with fewer employment protections.
- Community - A weakening in social bonds between people – within local communities, and across the country – that are crucial for individuals and society as a whole to flourish. More than a fifth of people in England say they are often or sometimes lonely, with those who are female, younger, single, unemployed, ill or disabled more likely to experience loneliness.
Over the next year a diverse group of people brought together by the think tank, including Bishop of Dover, Rose Hudson-Wilkin, and former Cabinet minister Lord Heseltine, will begin a review of the welfare state. The aim is to start a national conversation about how the nature of our social contract needs to change as the nation emerges from the coronavirus crisis.
Clare McNeil, IPPR Associate Director who heads the think tank’s new programme aimed at rethinking the role and scope of the welfare state, said:
‘Even with the significant measures the government has introduced to support people in this crisis, it is clear that some people lack the essentials we all need to stay afloat, whether that’s the low paid workers with no sick pay or the families claiming Universal Credit but still unable to feed their children.
‘As we begin to look to the future, it is clear that the country must offer a social contract that benefits everyone. Government cannot simply be lender of last resort, it should be insurer of last resort.
‘We urgently need a national conversation about who and what the welfare state is for and how it can prevent widening inequality in future.’
Harry Quilter-Pinner, IPPR Senior Research Fellow and the report’s lead author, said:
“Covid-19 is just one of many shocks our society faces in the decades to come. Climate change, automation and ageing will all expose us to shared risks beyond our control. The best way of managing these is collectively, as a society.
“The lesson from Covid-19 is clear: we cannot wait for shocks to overwhelm us but must instead ‘future-proof’ our welfare state so we are ready next time.
“Government must deliver on its promise to increase investment in order to ‘level up’, not just in infrastructure but also social investments, like health, education and welfare. These services will play a crucial part in our economic, as well as our social, recovery from Covid-19.”
- Robin Harvey, Digital and Media Officer: email@example.com
- David Wastell, Head of News and Communications: firstname.lastname@example.org
- Clare McNeil, Harry Quilter Pinner and Dean Hochlaf, the report’s authors, are available for interview
NOTES TO EDITORS
- The IPPR paper, The Decades of Disruption: New social risks and the future of the welfare state by Harry Quilter-Pinner, Clare McNeil and Dean Hochlaf is available for download at: http://www.ippr.org/research/publications/decades-of-disruption
- The impacts of benefit reform were calculated using the IPPR Tax Benefit Model. Assumes a hypothetical scenario where the Standard Allowance had been raised in 2015/2016 in rise with the most recent change, and then increased with inflation up to 2019/20. Further amends were made to comparable legacy benefits, equivalent to a proportionate increase in the Standard Allowance. Additional reforms such as the boost to the Local Housing Allowance has been excluded from this analysis.
- Over the next year IPPR’s Future Welfare State Programme will listen to the thoughts and views of a wide range of individuals and groups across the country, seeking to understand the welfare state as experienced by the people who use it and work in it all over the country. We will draw on the experiences of a diverse charity network and our findings will be shaped by an advisory group whose members have been drawn from across society. https://www.ippr.org/future-welfare-state/
- Topics examined will include the future of income security, youth employment, personal debt, community resilience and re-evaluating the status and provision of care - both paid and unpaid. It will also take a longer lens on spending priorities for the welfare state, asking how to maintain spending on 'traditional' welfare priorities while being able to meet the demands presented by 'new social risks'.
- Members of the programme’s advisory board include:
IPPR is the UK’s pre-eminent progressive think tank. With more than 40 staff in offices in London, Manchester, Newcastle and Edinburgh, IPPR is Britain’s only national think tank with a truly national presence. www.ippr.org
Latest News from
IPPR - Investing in a green recovery could create 1.6 million new jobs after Covid crisis, report finds03/07/2020 16:20:00
Plan for a clean and fair recovery, including drive to insulate homes and fit low-carbon heating, is ‘best way’ to boost economy says IPPR
IFS - Career disruption caused by COVID-19 threatens prolonged cost for young workers03/07/2020 15:20:00
There is growing evidence that the lockdown has had particularly negative impacts on young people’s labour market outcomes. New IFS research, funded by the Turing Institute, shows that the COVID-19 pandemic threatens to severely disrupt the career progression of young workers, suggesting that negative economic impacts on this age group may last well beyond the easing of the lockdown.
IPPR - Youth unemployment set to more than double by end of the year according to think tank03/07/2020 14:20:00
£3 billion government intervention needed to create hundreds of thousands of jobs and support young people, says IPPR
Civitas - ‘Schools should reopen fully’ in September – government must ‘drop all requirements for children to practice social distancing with immediate effect’, says think-tank report02/07/2020 14:35:00
Given the expectation for school reopening plans in England to be unveiled by the government this week, the government should ‘drop all requirements for children to practice social distancing with immediate effect’, urges a new Civitas report.
Adam Smith Inst - Real New Deal is Boris' Promise of Planning Reform02/07/2020 13:35:00
Despite worrying news of an interventionist ‘New Deal’ for the country, the best noises from the Prime Minister Boris Johnson in his speech in Dudley come in the detail of promised planning reform. Much of which builds on suggestions the ASI has made in recent months and years — including the great research work done by London YIMBY’s John Myers.
JRF responds to the Prime Minister’s speech promising a 'New Deal' for Britain02/07/2020 12:35:00
Helen Barnard, Acting Director of the Joseph Rowntree Foundation responded to the Prime Minister’s speech promising a 'New Deal' for Britain
IPPR North responds to PM’s ‘Build Build Build’ speech02/07/2020 11:35:00
IPPR North Director Sarah Longlands responded to the PM’s ‘Build Build Build’ speech
IEA responds to PM’s plan for the UK’s economic recovery02/07/2020 10:35:00
IEA Senior Academic Fellow Professor Philip Booth responded to the Prime Minister’s plans for the UK’s economic recovery post Covid-19
PM Speech: IPPR reacts to planning and housing plans that ‘fall woefully short’ of what is needed02/07/2020 09:35:00
High Streets put at risk due to plans to reform planning laws, says IPPR
IPPR - Covid housing affordability crisis: three quarters back call for dedicated, affordable housing for key workers30/06/2020 15:35:00
An IPPR report today, together with new polling commissioned by the think tank, warns that housing affordability issues are set to intensify due to Covid-19, with those on low incomes and privately renting most affected.