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Housing & Poverty introduction – Julia Unwin and Victoria Winckler

Housing & poverty: introduction

THIS SPECIAL WHQ FEATURE focuses on the links between housing and poverty. In an age of austerity and escalating housing costs, with another £12 billion of benefit cuts on the way, they are links that cannot be avoided. There are real dangers that the housing system that has acted as a bulwark against poverty and deprivation is in danger of impoverishing people instead.

If those risks are growing, so too is awareness of the role that housing in general, and social housing in particular, can play in mitigating them. In Wales this relationship is explicitly recognised in the broad portfolio of communities and tackling poverty minister Lesley Griffiths and in the prominence of anti-poverty determination to protect and invest in social housing – the most ‘pro-poor’ part of the welfare state – rather than increase rents to ‘affordable’ levels.

The nature of poverty and housing’s relationship to it has changed in the last decade: more households in poverty in Wales are in work than are out of work; poverty has fallen among older people but is unchanged or even rising among children and people of working age; and the private rented sector now houses rising numbers of people in poverty. These are themes you’ll find right through this issue of WHQ but over the next 12 pages a series of linked features looks at what they mean in terms of policy and what landlords, local authorities and tenants are doing about it in practice.


Housing’s key role in tackling poverty

Poverty is real but not inevitable, says Julia Unwin, and social housing and social landlords can help

NEARLY A QUARTER OF ALL people in Wales live in poverty. The UK will never achieve our full economic potential until we tackle the causes behind the high levels of poverty and disadvantage in Wales and elsewhere, through a comprehensive strategy.

The state’s role is clearly important, at local, national and UK level; and particularly through the tax and benefit system, but alone it will not reduce poverty: a more comprehensive approach is needed. Housing has a key role to play, and I am grateful to WHQ for the opportunity to highlight just two of the important actions housing providers in Wales can take to contribute to the realisation of a poverty- free and prosperous UK.

The first is perhaps obvious, but deserves re-stating. It is that publicly subsidised rental housing plays a vital role in combatting poverty. As Professor Rebecca Tunstall noted in a recent review for JRF, social housing ‘is highly targeted

on people with low incomes and has been shown to be the most “pro-poor” and redistributive major aspect of the entire welfare state’.

Quite simply, we need more of it. There has been notable progress in Wales in recent years, and it is good to see the Welsh Assembly Government’s expanded commitment to delivering 10,000 affordable homes over this term of office – but progress and delivery must be maintained. The alternative is to see more families living in the private rented sector – a form of housing that we know does not currently offer the same affordability, quality and stability as social housing.

Cuts to funding and welfare reforms make this a challenging environment for everyone working in housing. But I know the Welsh housing sector recognises the importance of delivering more genuinely affordable homes for rent, and has shown common purpose and creativity in order to do so. The evidence emerging from JRF’s

housing and poverty programme shows the continuing importance of your efforts to tackling poverty.

The second important role I believe Welsh housing could play is in leading by example as employers. I was delighted to see discussion in the last edition of WHQ of Wales and West Housing’s bold decision to pay the Living Wage to all its staff. It is a decision we have also taken at JRF and the Joseph Rowntree Housing Trust, and one which underlines our commitment to being an anti-poverty employer.

JRF’s evidence shows the particular importance of the Living Wage in the Welsh context. Clearly, an anti-poverty strategy will require a focus on job creation. But one of the starkest findings of our research is that the number of those in Wales who are working and live in poverty now exceeds the number of those who are not in work. 51 per cent of working-age adults and children in poverty in Wales are from working families.

Our evidence shows this in-work poverty stems from underemployment and low wages. People lack the hours of paid work they would like, but even if they are able to find them, too often this work is low paid. Working age benefits have become
a lifeline for people coping with this ‘low pay – no pay’ cycle, but this in turn places a strain on the public finances.

Increased hours are vitally important, but it is a fact that a quarter of employees in Wales earning less than the Living Wage are in poverty, compared to only 3 per cent of those earning more. That it is why it is so essential to not only increase employment but to also ensure that this leads to better pay and more hours. Anti-poverty landlords

can set a bold example to their supply chains, their peers in other organisations and the wider business community by choosing to pay the Living Wage.

The Living Wage can help change lives. But it also has benefits for the rest of society. Economic output is estimated to increase by an average of £13,000 with each person who moves from worklessness to employment on the Living Wage. Moving into work also increases people’s disposable income, enabling them to spend more and create more demand in the economy, as well as making savings for the Exchequer. It is good news all-round.

Of course, there is much more that landlords can do to tackle poverty than developing genuinely affordable homes for rent and paying the Living Wage, important though these are. Forthcoming JRF research looks in some detail at how landlords of all types tackle poverty at present.

Poverty is real, but it is not inevitable. Poverty prevents the economy from firing on all cylinders, creating costs that the Wales and the wider UK can ill afford. It damages people’s long-term prospects, wasting their talent and potential. Housing in Wales has a key role in tackling it.

Julia Unwin is chief executive of the Joseph Rowntree Foundation


A fresh approach

The changing nature of poverty means that efforts to reduce it must take housing into account, argues Victoria Winckler

BY THE TIME YOU READ this article, the latest statistics on poverty in Wales should be published. I am not a gambler, but I would wager that the headline figures will show no improvement on the 2012/13 rates. And while the recent trend has been one of standstill, the future looks much worse, with poverty rates, particularly amongst children, lone-parents and workless couples, forecast to rise.

The 2013/14 figures will almost certainly confirm that nature of poverty is changing too. While the risk of older people being in poverty has decreased markedly in the last 15 years, the risk of being in poverty for children and people of working age has remained unchanged or even risen. And the proportion of people in poverty where at least one person in the household is working has grown to such an extent that the majority of the working age poor live in a household where someone works.

Public policy in Wales is struggling to catch up with the significance of these changes. The different risks of poverty for different groups of people are rarely recognised, and the emphasis is still very much on ‘helping people into work’ as the route out of poverty, with all measures of success boiled down to a single measure – whether a household’s income is less than 60 per cent of the median for that type of household.

These changes mean it is time for a fresh and more nuanced approach to poverty, starting with a change in how we define it. Talking about definitions of poverty is enough to make most people switch off, but definitions really matter. They set the standards by which we determine whether the living conditions of the poorest are acceptable or not. And our definition of poverty shapes what we do about it.

Working with the Joseph Rowntree Foundation, we have begun to set aside the official measure of poverty to think about what is most important to people’s standard of living. Our starting point is the absolute basics – food, shelter, warmth and clothing. These things are agreed by the public and experts alike to be essential in a civilised society. Also essential is the ability to be able to participate in society – to afford the bus fare to visit a family member in hospital for example.

This approach not only chimes better with the experiences of people who live on low incomes as well as the wider public, it also opens up the potential for the Welsh government, local authorities, housing associations and other public and third sector bodies to reduce poverty in ways that matter to people affected. At the moment, providing a warm, dry, safe home to a lone parent family does nothing to increase that family’s income and so, on current definitions, does nothing to reduce poverty. Yet we would all surely recognise that a decent home makes a massive difference to a family’s quality of life, stability and prospects. We are not suggesting that money doesn’t matter – it clearly does. It’s just that cash should not be the sole measure of whether someone is living in poverty or not – having a decent quality, warm home matters too.

And when it comes to cash, housing matters as well. The rising cost of housing is tipping a growing number of households into income poverty too. In the private rented sector for example, 17 per cent of tenants had an income below the poverty threshold before their housing costs were taken into account, but 37 per cent do so after housing costs are paid. In the social housing sector, 26 per cent of tenants live in poverty before housing costs, rising to 42 per cent after housing costs are paid. Housing costs have nothing like the same impact on owner occupiers.

The implications for policy makers are clear – efforts to reduce poverty must take housing into account. A drive to increase supply, improve housing conditions, ensure stable tenancies and encourage low rent levels would go a long way towards helping to reduce poverty in Wales.

Victoria Winckler is director of the Bevan Foundation

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