Tag: DWP

Way to Work: DWP plans to get half a million people into work by June

A new target to move half a million people into jobs by the end of June launches today under UK Government plans to ‘turbo-charge’ our national recovery from COVID-19.

As we move out of the pandemic, with restrictions lifted and life returning to normal, the ‘Way to Work’ campaign will focus on getting job-ready people off Universal Credit and into work, rapidly filling vacancies which are at a record high.

Targeted predominantly at those in the intensive work search group on Universal Credit, Way to Work will support people back into work faster than ever before and filling vacancies more quickly. Latest figures from the ONS show that the demand for workers is there, with a record 1.2 million vacancies to fill, 59% higher than pre-pandemic levels.

To support people into work faster those who are capable of work will be expected to search more widely for available jobs from the fourth week of their claim, rather than from three months as is currently the case.

This clearer focus will ensure that, if people are not able to find work in their previous occupation or sector, they are expected to look for work in another sector and this will be part of their requirements for receiving their benefit payment.

For the vast majority of people who are already engaging fully with Jobcentre Plus, this could be the extra support they need to secure a job. However, for the small minority who do not engage, the sanctions regime will operate as usual.

They will be supported in this with more time spent face to face with a Work Coach to receive better, tailored support. We know work is the best way for people to get on, to improve their lives and support their families because people are at least £6,000 better off in full time work than on benefits.

Work and Pensions Secretary Thérèse Coffey said: “Helping people get any job now, means they can get a better job and progress into a career.

“Way to Work is a step change in our offer to claimants and employers, making sure our jobcentre network and excellent Work Coaches can deliver opportunities, jobs and prosperity to all areas of the country.

“As we emerge from COVID, we are going to tackle supply challenges and support the continued economic recovery by getting people into work. Our new approach will help claimants get quickly back into the world of work while helping ensure employers get the people they and the economy needs.”

Chancellor of the Exchequer, Rishi Sunak said: “It’s important that everyone has the opportunity and support to find a good job to help them get on in life.

“That’s why we’re doubling down on our Plan for Jobs with this new campaign to harness the talent of jobseekers and support employers to fill vacancies, find work and create new opportunities.

“Together we will boost this country’s jobs-led recovery.”

Building on the ‘success of the flagship Kickstart Scheme’, DWP will work with a wider range of employers to cement positive relationships and show them the good quality of candidates coming through jobcentres.

This includes through direct engagement with employers across booming sectors like construction, haulage and logistics and social care, and over 350 jobs fairs mobilised across every region in the coming months.

Major employers including Balfour Beatty, Whitbread Group, TalkTalk, Bourne Leisure, Ocado and Kier are already throwing their weight behind the campaign.

Ian Nicholas, Global Managing Director, Reed said: We’ve been working closely with the Department for Work and Pensions for a number of years and in the drive to get people into work, this is now more important than ever.

“Working closely with the DWP has provided us with valuable access to people looking for work. Those not already working closely with the department should consider the benefits it can bring both for business and the UK economy.”

Tony Ellender, Head of Professional Development, Balfour Beatty said: “Balfour Beatty is delighted to be working with DWP to promote our wide range of opportunities in construction.”

Lisa Taylor, Head of Resourcing, Whitbread said: “Many of those who have joined us from the jobcentres during our time working closely together have gone on to build a successful career with us or maintain long term employment.

“At Whitbread, we passionately believe that by working together with Jobcentre Plus we can make a real difference to the lives of jobseekers in this country through our no barriers to entry and no limits to ambition approach, as well as being a force for good in our local communities.”

Daniel Kasmir, Chief of People and Procurement at TalkTalk said: “We are happy to be working with DWP in exploring all recruitment solutions to look to fill our vacancies and will continue to do so with this push for jobs.”

Bleu Stessia, Kickstart Manager, Haven.com said: “Work Coaches have enabled us to link with over 50 jobcentres across the UK supporting our parks from Scotland to Cornwall.

“Understanding the great opportunities in hospitality, the DWP has also provided extensive support for our recruitment programme referring candidates and providing, support for interviews, for assessment days and job fairs.”

State pension ‘shameful shambles’

“Shameful shambles” of DWP’s long term underpayment of state pensioners with “little interest” in consequences

The Department for Work & Pensions (DWP) estimates it has underpaid 134,000 pensioners, mostly women, over £1 billion of their State Pension entitlement, with some of the errors dating as far back as 1985.

In January 2021, DWP started an official exercise to correct the errors, the ninth such exercise since 2018.  The errors, which mostly affect widows, divorcees and women who rely on their husband’s pension contributions for some of their pension entitlement, happened because of the Department’s use of outdated systems and heavily manual processing.  Small errors that were not recognised each time added up over years to significant sums of money.  

DWP will only contact pensioners when it finds through these exercises that they have been underpaid, and admits that many more are not receiving their due – these “risk missing out on significant sums”, with “little guidance for those currently claiming State Pension who are concerned that they have been underpaid” and people left “in the dark over their entitlement”.  

There is currently no formal plan for contacting the next of kin where a pensioner who was underpaid is now deceased. 

DWP is only paying those it has identified as having a legal entitlement to arrears, in some cases many years after the event, and has been inconsistent in paying interest. It has shown little interest in understanding the further knock-on consequences, including on social care provision, for those it underpaid.   

Fixing DWP’s mistakes itself comes at great cost to the taxpayer – expected to cost £24.3 million in staff costs alone by the end of 2023. Experienced, specialised staff have been moved away from business-as-usual and as a result DWP is already experiencing backlogs in processing new applications.

The risk remains that the errors that led to underpayments in the first place will be repeated in the correction exercise, if not also in new claims.  

Dame Meg Hillier MP, Chair of the Public Accounts Committee, said: “For decades DWP has relied on a State Pension payment system that is clunky and required staff to check many databases – and now some pensioners and the taxpayer are paying in spades.  

“Departments that make errors through maladministration have a duty to put those it wronged back in the position they should have been. In reality DWP can never make up what people have really lost, over decades, and in many cases it’s not even trying. An unknown number of pensioners died without ever getting their due and there is no current plan to pay back their estates. 

“DWP is now on its ninth go at fixing these mistakes since 2018, the specialised staff diverted to fix this mess costing tens of millions more to the taxpayer and predictable consequences of delays in new pension claims. And there is no assurance that the errors that led to these underpayments in the first place will not be repeated in the correction exercise.  

“This is a shameful shambles. The PAC expects DWP to set out the step changes it will make to ensure it is among the last.” 

Crackdown on benefits fraudsters

A £510 million funding boost targeted at fraudsters lying to the DWP about their benefit claims has been announced by the UK Government.

The money will be used to improve the department’s capability and capacity to detect and deter benefit fraud and catch fraudsters, recovering more taxpayer money that funds essential public services.

This crackdown will include 2,000 trained specialists to review claims by carrying out property checks, following up earning declarations of self-employed claimants and cross-checking bank details.

It builds on the department’s highly skilled and agile counter-fraud team and investigators in cyber security and serious and organised crime.

They led government action to tackle organised crime groups seeking to exploit support during the pandemic, shutting down systematic attacks on the benefit system and preventing at least £1.9 billion in benefits from being paid to people trying to scam the system.

Thérèse Coffey, Secretary of State at the Department for Work and Pensions, said: “Investing in measures to fight fraud protects honest taxpayers’ money and stops criminals funding their illicit activities off the back of our welfare system.

“We know the characteristics of a suspicious claim. This half a billion-pound cash injection is a clear message to fraudsters and criminal gangs. Anyone trying to con us will get caught out.”

A recent case handled by the counter-fraud team supported a high value fraud bust with police in Stratford-upon-Avon. Operation Iggy was a sting on a woman who had made 14 Universal Credit claims using false identity documents for a total of £270,000.

She was arrested, with the false documents found in her house, and sentenced to 30 months in prison, with DWP now recovering the money.

Capita secures JETS contract extension after supporting 4,000 Scottish job seekers into new roles

Capita plc has announced that it has secured a £7.7m 8-month extension to its  contract to run the Job Entry Targeted Support (JETS) programme in Scotland. Capita will continue to run the programme to March 2023. 

Capita launched the Scottish JETS programme in January 2021 and since then, it has  successfully supported over 4,000 job seekers, who had become unemployed due to the Covid 19 pandemic, into new roles in sectors, such as, hospitality, retail, care and construction. 

JETS is a Department for Work and Pensions (DWP) programme designed, following the pandemic, to support jobseekers across the UK, who have been unemployed for more than 13  weeks, find work.  

Over the course of the extension, Capita will continue to work with Scottish supply chain partners – including The Wise Group, The Lennox Partnership and Reed in Partnership– to match jobseekers with skilled advisers who will provide specialist and local support tailored to their  needs.  

All jobseekers referred to JETS meet every 10 days with their adviser, who works with them to  make them job ready and improve their knowledge, skills and confidence. JETS participants  benefit from digital interview training and access to a Capita-developed online portal which features: 

• Online learning which provides users with opportunities to get new qualifications for  sectors of the economy that are growing. 

• A skills library which enables users to measure their existing skills and knowledge to help  them decide what the most appropriate online courses are for them to complete. • An AI-powered CV builder which links a user’s CV to a job feed to enable them to access  employment opportunities.  

• An action plan, devised with a user’s JETS employment adviser, and online calendar to  track their progress.  

Mims Davies MP, Minister for Employment, said: “It’s wonderful to see over 4,000 people, like Adam, across Scotland getting back into work thanks  to our DWP JETS scheme.  

“The £500m expansion of our Plan for Jobs will continue to deliver for people of all ages across  the country – giving them tailored support to find that next opportunity and really progress in their  careers.” 

Andy Start, CEO Capita Public Service, said: “We are delighted that we have secured this  extension to our JETS contract. I am proud that our team has helped over 4,000 jobseekers in  Scotland into work.

“Every person Capita has supported into a new role, through our digital tools  and our advisers, is now pursuing a rewarding career and developing their expertise further. In  the coming months, we will help many more jobseekers get job ready by giving them the advice,  support and skills they need to re-enter the workforce. 

“The Covid-19 pandemic is not over and as we continue the rebuilding process, programmes like  JETS are vital to securing the UK’s economic recovery. We will continue to use our extensive  experience of delivering digital services, which support diverse groups of vulnerable people, to  fulfil our role on the JETS programme in Scotland.”  

Adam, a JETS participant who Capita has placed in work, said: “I hadn’t done many job interviews  and I found them nerve wracking. I was in a very difficult cycle before I was with JETS, interviews  wouldn’t go well and I didn’t know what to focus on for the next one. The JETS mock interviews  and online training courses really helped to build my confidence.  

“My JETS advisor always made me feel like there was time for me and she was giving me the  help that I needed. I’ve already recommended the JETS scheme to other people in my life as a  helping hand really does make a world of difference.” 

Some of Capita’s JETS participants are dealing with mental health challenges. Capita offers these  jobseekers free access to a digital mental health platform, designed by Kooth Digital Health, that  provides immediate, anonymous access to self-help materials, an online community and  professional support via accredited counsellors and emotional wellbeing practitioners. 

Additionally, as part of Capita’s commitment to reducing its carbon footprint, the business has pledged to fund the planting of a tree for each jobseeker it places in sustainable employment.

The  trees will be planted through Revere, an innovative nature restoration finance organisation, across the Cairngorms, Loch Lomond and Trossachs National Parks and will help to combat climate  change and biodiversity loss. 

First Ministers urge PM Boris Johnson: Do the right thing

First Minister Nicola Sturgeon has joined with the First Minister of Wales and the First Minister and deputy First Minister of Northern Ireland to demand Prime Minister Boris Johnson “do the right thing” by reversing the decision to withdraw the £20-a-week uplift to Universal Credit.

In a rare joint intervention, the leaders of the devolved nations have warned in a letter that the UK Government “is withdrawing this lifeline just as the country is facing a significant cost-of-living crisis.”

They have urged the Prime Minister to “consider the moral, social and economic harms” of the of this cut, and “do the right thing” and reverse his government’s decision to withdraw this funding which will harm around 6 million people across the UK.

The First Minister, along with Welsh First Minister Mark Drakeford and Northern Ireland First Minister and deputy First Minister Paul Givan and Michelle O’Neill say the move, which comes into effect this Wednesday, 6 October, is short sighted at a time of increases in the cost of food and fuel, rising inflation, the end of the furlough scheme, and imminent rise in National Insurance contributions.

First Minister Nicola Sturgeon said: “I do not think there has been anything quite so morally indefensible in UK policy in recent times as the proposed cut to Universal Credit.

“At a time when we are facing the impact of the pandemic, Brexit and soaring costs, removing £20 per week from the lowest-income households simply cannot be defended in any way, shape or form.

“The planned cut represents the biggest overnight reduction to the basic rate of social security in more than 70 years and would sever a crucial lifeline for countless households across the UK at a time when budgets are already facing an unprecedented squeeze.

“It is an immoral, ill-thought out and ultimately counterproductive policy which simply must be stopped.  

“Those on low incomes are going to find it difficult to feed their children, heat their homes, and pay their rent if the cut goes ahead. We have therefore united as the leaders of Scotland, Wales and Northern Ireland to say to the Prime Minister: ‘Do not do this.’”

The full text of the letter is included below:

Dear Prime Minister

We are writing to call on you, with the utmost urgency, to reverse your Government’s short-sighted decision to withdraw the £20-per-week uplift to Universal Credit.

Your Government is withdrawing this lifeline just as the country is facing a significant cost-of-living crisis. This winter millions of people are facing an untenable combination of increases to the cost of food and energy, rising inflation, the end of the furlough scheme, and an imminent hike to National Insurance contributions.

There is no rationale for cutting such crucial support at a point when people across the UK are facing an unprecedented squeeze on their household budgets.

Within the last month, an overwhelming majority of elected members in Holyrood, the Senedd, Stormont and Westminster have voiced their opposition to this cut to Universal Credit, as have the four social security committees of each parliament. The four Children’s Commissioners of each nation, numerous charities and faith groups have also expressed their grave concerns as have millions of people who face additional and unnecessary hardship because of this cut to Universal Credit against the backdrop of a winter of hardship.

We note your Government’s announcement of a Household Support Fund – an acknowledgment that too many people will be unable to make ends meet this winter. Unfortunately, a £500 million fund handed out on a discretionary basis is wholly inadequate to making up the £6 billion shortfall in social security expenditure that will result from the cut to Universal Credit.

Your Government has repeatedly refused to conduct any impact analysis on the biggest overnight reduction to the basic rate of social security for more than 70 years.

As such, it is important that we draw your attention to the growing body of evidence and analysis about the harm this cut will inflict. Research by the Resolution Foundation and the Trussell Trust has highlighted the significant and devastating impact the cliff-edge withdrawal of the £20-a-week uplift to Universal Credit will have on family incomes, with an associated rise in food insecurity.

The Legatum Institute has produced sobering analysis highlighting that the £20-per-week uplift has kept 840,000 people, including 290,000 children, out of poverty in Q2 of 2021. It makes no sense at all to knowingly pursue a policy that will result in this immense and needless rise in child poverty and we ask you to consider the lasting harm and costs of this cut accordingly.

It is important to note that this will increase poverty and hardship without delivering any tangible social or economic benefits. The UN Special Rapporteur on Extreme Poverty and Human Rights said – when calling upon you to reverse this cut – that for a healthy and well-qualified workforce to emerge, your Government must provide adequate levels of social protection. Years of a freeze on benefits means Universal Credit has not kept pace with rising living costs. Further to this, rising inflation means that a basic rate of Universal Credit after this cut will hold less purchasing power than it did in March 2020.

To support a meaningful recovery from this pandemic we must first ensure the needs of our most vulnerable are met. This cut threatens to undermine the recovery by diminishing the capacity of six million people to make ends meet.

It is not too late for you to reverse the decision to take money out of the pockets of the poorest in society at a time when they are facing a serious cost of living crisis.

We, with the full support of the Northern Ireland Executive and the Scottish and Welsh Governments, urge you to consider the moral, social and economic harms of this cut, and do the right thing and reverse your decision to withdraw this lifeline.

A copy of this letter is being sent to the Secretary of State for Work and Pensions, the Chancellor of the Exchequer and relevant Secretary of States for the devolved nations.

Yours sincerely

Nicola Sturgeon First Minister of Scotland

Mark Drakeford First Minister of Wales

Paul Givan First Minister of Northern Ireland

Michelle O’Neill Deputy First Minister

Keep the Lifeline: Holyrood votes to oppose Universal Credit cut

Yesterday, Lothian MSP, and Scottish Greens Co-leader, Lorna Slater joined the overwhelming majority of MSPs in voting to oppose the cruel Tory £20 cut to universal credit that is being inflicted by Westminster.

The cut will impact tens of thousands of families in Lothian, cutting their income by £1,040 per year.

Lothian MSP and Scottish Greens Co-leader Lorna Slater said: “The Tories have shown their true colours. This is one of the biggest social security cuts ever seen in this country and could plunge tens of thousands of families in Lothian into despair.

“It is particularly unwelcome at a time when so many people are still struggling with the impact of the pandemic.

“£20 a week may not be a lot to the Prime Minister and his colleagues, but for far too many families it is crucial to their budgeting and their wellbeing. For many people across this city, it could be the difference between a warm home and a cold one this winter

“Many people claiming universal credit are in fact in work. The so-called uplift was not an act of generosity, but an admission of failure – an admission that the system had been so damaged by cuts that it was no longer able to provide adequate support for people needing help with their incomes for reasons beyond their control.

“The cut is symbolic of a UK government that knows the price of some things but the value of nothing. It shows why Scotland needs the powers to chart a different path that prioritises human need and builds a fairer, greener recovery for all.”

Holyrood Social Security Minister, Edinburgh Northern & Leith MSP Ben Macpherson, closed yesterday’s debate:

#KeepTheLifeline

Pension underpayment scandal

The Department for Work & Pensions (the Department) estimates that it has underpaid 134,000 pensioners OVER £1 BILLION in State Pension.

This was due to repeated human errors over many years, some level of which was almost inevitable given the complex rules and high degree of manual review necessary when assessing claims, according to the National Audit Office (NAO).1

The errors affect pensioners who first claimed State Pension before April 2016, do not have a full national insurance record, and should have received certain increases in their basic State Pension.2  

The errors were brought to the Department’s attention by individual pensioners, concerned experts and the media. The Department started exploring the ‘potential for error’ from April 2020 and confirmed that there was a significant issue in August 2020. It started to review cases from January 2021 and will contact pensioners if it finds that they have been underpaid.3

The Department estimates that it will need to pay the affected pensioners it can trace a total of £1,053 million, representing an average of £8,900 per pensioner affected. The Department has not assessed the demographics of pensioners likely to be affected, but most are likely to be women. The Department’s estimates are highly uncertain and the true value of the underpayments will only become clear once it has completed its review of all affected cases.

The errors occurred because State Pension rules are complex, IT systems are outdated and unautomated, and the administration of claims requires a high degree of manual review and understanding by case workers. This makes some level of error in the processing of State Pension claims almost inevitable.

The Department’s caseworkers often failed to set (and later action) manual IT system prompts on pensioners’ files to review the payments at a later date, such as their spouse reaching State Pension Age or their 80th birthday.

Caseworkers also often made errors when they did process prompts because frontline staff found instructions difficult to use and lacked training on complex cases.

The Department’s approach of measuring, identifying and tackling the largest causes of fraud and error means it missed earlier opportunities to identify underpayments. It does not have a means of reviewing individual complaints or errors, such as how many people are complaining about the same issues, to assess whether the errors have a systemic cause.

Quality assurance processes focused on checking changes to case details, such as a change of address or the death of a spouse, rather than the overall accuracy of the payments.

In January 2021, the Department started reviewing cases at risk of underpayment in a Legal Entitlements and Administrative Practices (LEAP) exercise. This exercise was originally expected to take over six years to complete, but following a ministerial decision to recruit additional staff, the Department revised the completion date to the end of 2023.

The Department expects to increase the number of full-time staff working on the LEAP exercise from 184 in March 2021 to 544 by the end of January 2022. It expects the administration of the LEAP exercise to cost £24.3 million in staff costs.

Between 11 January and 5 September 2021, the Department reviewed 72,780 cases it had identified as being at risk of having been underpaid or who contacted it querying their payment, and paid £60.6 million of arrears to 11% of these cases.

The Department is prioritising individuals who fall into “at risk” categories, such as those who are widowed or over age 80.

The Department may find it particularly difficult to correct underpayments of pensioners who have died. It does not know how many pensioners who have died have been underpaid as, for data protection reasons, it does not usually keep records for more than four years after a pensioner’s death, and if married, their spouse’s death.

As at August 2021, the Department had not approved a formal plan to trace the estates of deceased pensioners.

Investigations We conduct investigations to establish the underlying facts in circumstances where concerns have been raised with us, or in response to intelligence that we have gathered through our wider work. The Department for Work & Pensions has underpaid an estimated £1,053 million to pensioners due to human errors it has made dating back many years. This investigation sets out who has been affected, how it happened, how the Department assessed the scale of the problem, and what it is doing about it.

Gareth Davies, Head of the National Audit Office, said: “The impact of the underpayment of State Pension on those pensioners affected is significant. It is vital that the Department for Work & Pensions corrects past underpayments and implements changes to prevent similar problems in future.”

Investigation-into-underpayments-of-State-Pension-SummaryDownload

Rethink Mental Illness survey: Stop Benefit Deaths

The DWP has investigated 268 cases of death or serious harm caused by the benefits system since 2012.

Charity Rethink Mental Illness thinks that might be the tip of the iceberg.

If you’ve been seriously harmed by the benefits system, take our survey.

Help us #StopBenefitsDeaths👇

https://bit.ly/3iXARVm

Committees unite to call for UC uplift to be made permanent

The UK Government should make the £20 per week uplift to Universal Credit and Working Tax Credit permanent, according to a joint letter issued by cross-party committees from Westminster, the Northern Irish Assembly, the Welsh Senedd and the Scottish Parliament.

The Chancellor of the Exchequer, Rishi Sunak and Work Pensions Secretary, Thérèse Coffey, have confirmed that the uplift will come to an end in October.

However, if the uplift is removed, the 6 million people claiming Universal Credit will lose £1,040 in annual income overnight. According to the Joseph Rowntree Foundation this could force 500,000 people, including 200,000 children, into poverty.

The letter also raises concerns that the benefit will be removed from families at the same time unemployment is due to peak as the Coronavirus Job Retention Scheme comes to an end.

The Committees call on the uplift to be extended to legacy benefits, to make sure those in need do not miss out.

The letter was signed by Neil Gray MSP, Convener of Holyrood’s Social Justice and Social Security Committee, Stephen Timms MP, Chair of Westminster’s Work and Pensions Select Committee, Paula Bradley MLA, Chair of Stormont’s Committee for Communities, and Jenny Rathbone MS, Chair of the Senedd’s Equality and Social Justice Committee.

Neil Gray MSP, Convener of the Social Justice and Social Security Committee, said: “The UK Government did the right thing at the start of the pandemic to increase Universal Credit and Working Tax Credit to give better support to people during these incredibly challenging times.

“But removing the uplift in October would have devastating consequences for our most vulnerable in society, who have been hit hardest by this pandemic.

“This risks sending many more people into poverty at a time when we should be doing all we can to support them.

Mr Gray added: “All four of our Committees agree that by spending this money now on social security, we can avoid putting more people into poverty, helping save more money in the longer term on health, education, justice and other social services.”

Rt Hon Stephen Timms MP, Chair of the House of Commons Work and Pensions Committee, said: “To sweep away such a vital lifeline from people who have felt the very worst effects of the pandemic risks plunging hundreds of thousands of people into poverty at a time when they will have had little or no chance to get back on their feet.

“Six Conservative former welfare secretaries have warned the Chancellor of the grave consequences of his proposed course of action. The strength of feeling on all sides of the political divide, and across the UK, could not be clearer. The Government must change course.

“At the same time, the Government must also increase support for the people who, through no fault of their own, are still claiming older benefits and have received no pandemic-related increases at all – despite their living costs rising during the pandemic.”

Jenny Rathbone MS, Chair, Equality and Social Justice Committee, said:

“Whilst, in Wales, policy relating to Universal Credit and other social security benefits is reserved to Westminster, we are deeply concerned about the impact removing the uplift might have on widening social inequality in Wales; growing indebtedness as a result of the economic impact of Covid; and the ability of low income families to eat as well as pay their rent.”

One in Six: Working family poverty hits record high

  • Billions spent on state support enrich private landlords, while one in six working households face poverty 
  • Action needed to bring down housing and childcare costs, and make work pay, to prevent further increases in poverty  
  • Stark new figures show the need to rethink economy and end constant house price spiral, report says 

The UK’s relative poverty rate among working households has hit a record high this century of 17.4 per cent, according to the first comprehensive analysis of official data released last month. 

Working poverty rates among families with three or more children have reached 42 per cent, up more than two thirds over the past decade. 

The figures, reflecting the position just before the pandemic struck, show that working poverty rates have risen across the entire country but are highest in London, Wales and the north of England. Families of all sizes have been affected, with single parents, couples with a single earner and large families affected worst. 

The sharp rise in working poverty (poverty faced by anyone living in a household where someone is in work) is revealed in a newreport by the IPPR think tank.

The report, No Longer Managing, lists four factors behind the growth in poverty: spiralling housing costs among low-income households; low wages; a social security system that has failed to keep up with rental costs; and a lack of flexible and affordable childcare.  

It identifies the economy’s over-dependance on house price growth as a key factor in driving poverty higher, as more families have to rely on renting privately and housing costs for private tenants have risen by almost half (48 per cent) in real terms over 25 years. One in four households is projected to be renting from private landlords by 2025. 

As a result, it says, much of the multi-billion pound benefits bill supports housing costs in the private sector, with any increase effectively channelled into the pockets of private landlords. IPPR estimates that £11.1 billion of housing support spending went to private landlords last year. 

Detailed IPPR analysis of DWP survey data also found that: 

  • Two-earner families where one partner works full-time and one works part-time are increasingly being pulled into poverty, a significant shift. For people in this group, the chances of being pulled into poverty have doubled over the past two decades, from one in 20 to one in 10.
  • Even for households with two people in full-time work, the chances of being pulled into poverty have more than doubled over the same period, rising from 1.4 per cent to 3.9 per cent.
  • Couple households with one full-time earner now have a poverty rate of 31 per cent, almost as high as working households where nobody works full time.
  • London has the highest rate of in-work poverty – 22 per cent – with Wales, the Midlands and the north of England next highest on 18 per cent. The rate is lowest in Northern Ireland (13 per cent). 

The IPPR report argues for new and different long-term targets for welfare, economic and housing policy, which reflect housing, childcare and travel-to-work costs as a percentage of families’ income. 

It says that the government’s current ‘levelling-up’ agenda is “unlikely to benefit working families if it remains largely focused on physical infrastructure” and fails to address growing inequalities. These include rapidly rising house prices and the growing gulf between property owners and renters – often in the most affluent parts of the country. 

Instead it urges developing wider objectives to bear down on some of the highest costs faced by working families – housing and childcare – and to ‘make work pay’. 

The report calls for long-term reforms to: 

  • Contain housing costs as a share of household income. This could include setting a house price inflation target as part of the Bank of England’s remit; greater taxation of property wealth; and investing at least £15 billion in capital grants to help vastly increase the rate of new housebuilding. 
  • Contain childcare costs as a proportion of household income, and make it more flexible. Measures to achieve this would include higher state subsidies for children under five and wraparound care for school-age children, with funding going directly to childcare providers.
  • Make work pay, through labour market reforms, skills policy and higher income support. Greater collective bargaining and unionisation, bearing down on insecure work and increased access to training and skills would all help to raise incomes; but greater support through the social security system, eroded during the transition to universal credit, is also needed so that people are better off in work. 

It also proposes measures to alleviate the problem in the short term, ranging from increases in local housing allowance to changes in childcare payments made through Universal Credit, and a 20 per cent higher minimum wage for zero hours contracts. 

But it warns that without underlying long-term reforms, government will face a perpetual choice between paying constantly rising social security bills to offset growing in-work poverty – or allowing the number of working families in poverty to increase unchecked, as is currently the case. 

Clare McNeil, IPPR associate director and head of its Future Welfare State programme, said: “These shocking new figures should be a wake-up call for everyone concerned about our future.

“The UK economy’s dependence on ever-rising house prices, and the lack of affordable housing, have trapped us in a vicious circle which, unless broken, will condemn us either to a constantly rising social security bill, or to ever-increasing poverty among working households. 

“A growing private rented sector coupled with high rents enriches property owners at the expense of renters, and represents a transfer of wealth away from people who already have very little, into the hands of others who are steadily accumulating more.  

“We need an alternative to what the government calls ‘levelling up’. That should look beyond headline incomes to the true costs and obstacles people face when struggling to make work pay. Otherwise more and more families who were once ‘just about managing’ will join the growing number who are ‘no longer managing’. 

“Short-term fixes are needed to alleviate the immediate crisis, but to solve the underlying problem we need a far deeper rethink of housing, childcare, social security and work.” 

The Bishop of Dover, the Rt Revd Rose Hudson-Wilkin, who is a member of IPPR’s welfare state advisory panel, said: “The system is broken and it is our responsibility to see that it is changed. 

“Providing a home and building a future for your family is something we all strive for and this report shows that one in six households are trying as hard as they can but still finding it impossible to feed their families and provide a safe roof over their heads. 

“The gulf between the rich and the poor is growing, as the pandemic showed us all too clearly. We must do more as a country to ensure that the resources we have been blessed with are shared more equally – now, and in the future.”

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