25 March 2022

The Tories’ privatisation of welfare is a catastrophe for the poorest

As the state relinquishes its duties to the vulnerable, charities are having to take its place as our country’s basic safety net.

By Gordon Brown

The 1 April marks a fateful turning point in the long history of the British welfare state. On that day, families not only face the biggest single cut in their living standards for at least 50 years but the social security system will meet only half the financial needs of millions of families on Universal Credit.

According to Loughborough University’s Minimum Income Standard — compiled from what members of the general public think are a family’s essential living costs — a couple on Universal Credit with two children aged three and seven require £511 a week after paying rent and council tax. From next week all they will receive is £274 net of council tax. If they have a third child, they will be subject to the two-child cap and will need at least £600 a week but will receive only £298 — less than half of their needs. Single people fare little better and for thousands, what’s called “the benefits cap” sets an even more miserly upper ceiling for payments, which means Universal Credit covers only 45 per cent of their needs.

But 1 April signals a decisive shift in the government’s treatment of poverty that is even more ominous. Its withdrawal from welfare is now becoming so extensive that charities are having to take the state’s place as our country’s basic safety net. Voluntary organisations — not the Department for Work and Pensions — are becoming the essential lifeline for families, with food banks, clothes banks, bedding banks and baby banks — and not our social security system — the provider of last resort. After cuts in the real value of family benefits in seven of the last ten years, child poverty will rise by another 500,000 this year to 4.8 million and then, it is estimated, it will reach a record 5 million during 2023.

Child benefit is now worth 20 per cent less than in 2010, condemning more children to poverty than even during Margaret Thatcher’s 1980s. Then it was mass unemployment causing poverty. Now for three out of four poor people, it is low pay.

This arithmetic of deprivation confirms the dramatic picture drawn by Save the Children of parents walking precariously on a tightrope with an already threadbare safety net beneath them that is being systemically shredded stitch by stitch. When we hear of privatisation we are conditioned to thinking of railways, buses, telecoms and utilities, the basic assumption being that market forces will provide a service hitherto guaranteed by the state. Over the last decade we have been witnessing the unannounced but creeping privatisation of welfare — a sadly unmistakable downward trend, damning of our collective conscience, and whose origins lies in old but ingrained prejudices about “the undeserving poor”.

Now, in 2022, local charities are being asked to fill the gap and do the impossible. In addition to its playgroups and crèches, its lunch and after-school clubs and its support services for mothers, the biggest family centre in my county of Fife, the Cottage (of which I am patron), runs a Dads Club, a pioneering group that helps fathers build the skills that can make them better parents. It hosts a Grannies Club to teach people techniques that can help their grandchildren. Filling a gap left by the NHS’s failure to adequately fund mental health, it now employs its own mental health counsellors.

When, last October, the government removed the weekly extra £20 that local households on Universal Credit received during the Covid crisis, a cumulative total of £33m was removed overnight from just over 30,000 low-income families in Fife. With the help of Amazon’s John Boumphrey and other local firms, the family centre has amassed their surplus goods in a newly rented warehouse, and working from referrals by schools, health centres and social services and 60 local charities, as many as 6,000 surplus goods are distributed every week to families in need.

While these community groups and food banks are doing all they can to make good the losses families face from the benefit changes, the best we can hope for this year — even after an unprecedented surge of local philanthropy in a community that does not have a lot to start with — is to put back in an additional £6m to compensate for the £60m families are now short of after food and fuel inflation. So for families now facing a choice between feeding their gas and electricity meters and feeding their children, charity cannot do enough to fill the void. And around the country the picture is no different from Fife. Birmingham, for example, has a schools community swap shop offering free school uniforms, a “pay as you feel” food service and a “food on your doorstep” service as well as food banks — but these cannot stop poverty continuing to rise.

The Scottish Poverty Alliance has recently charted some of the heart felt pleas of mothers who feel guilty because, without cookers, they cannot serve hot food; and without cash, their children don’t have the clothes to go out with their friends, or the kit to participate in school sports or the extras needed to attend after-school clubs. This is the new face of poverty: a left-out generation of young boys and girls who cannot participate in what the rest of their friends are doing because they simply don’t have the cash to keep up, deprived of opportunities and activities that most of us take for granted. This will scar an entire generation of children and divide our society permanently as a result.

For too long the debate about welfare has been poisoned by claims about “cheats” and “scroungers” when the truth is the majority of the poor are working all hours and still cannot make ends meet. No area of our country is exempt from this crisis and it is time for charities, churches and faith groups, local authorities, mayors and the devolved administrations to unite as a coalition to revive and rebuild public support for our welfare state and call for a concrete plan that will end family poverty.