Monday 23 December 2013

The food bank debate

On 18th December Parliament debated food banks: this debate happened because of public concern: a petition, started by blogger Jack Monroe, was signed by 142,000 people, comfortably more than the 100,000 needed to secure a debate. Iain Duncan Smith disappeared during the debate, leaving his minister, Esther McVey, to answer questions. 

As you might expect, the government wasn't prompted into any soul-searching, but the issue was at least brought out into the open, and Maria Eagle, for the opposition, made a clear and well-informed speech, disposing of spurious points from Tory back benchers with ease. The full debate is available here:

But what is going on? What do we know about this crisis, and what might be causing it? Well, research undertaken by Warwick University[1] on the matter might shed some light on the matter: unfortunately the government, who commissioned the report, have stalled publication for months. We can only speculate about the reasons for this delay.  

In the meantime let's look at what we do know, and see if we can join the dots.

(None of this is exactly rocket science: you probably know most of what I'm about to say already. But it's important to have fact available, not just a general sense of injustice.)

We first need to ask if there is really a crisis. 

Is food bank use rising?

The main provider of food banks is the Trussell Trust.  I hadn't even heard of them until this year. In an intervention at the debate Conservative MP Sir Gerald Howarth said that Trussell's 49th food was opened in his constituency in 2009, and that 'this illustrates that it was the destruction of the public finances by her government' which was to blame. (Regarding the tired mantra of blaming Labour, I'd encourage you to check out skwalker.../the-myth-of-the-inherited-mess-52/, for example.)

In January 2011 Trussell operated 80 food banks: by January 2013 this had grown to 300.

The source for the statistics above, including the graph, is the Trussell Fund itself[2].

Of course, correlation does not necessarily imply causation: I also note that the use of food banks was rising before the coalition came to power. Perhaps it is simply that more people have been able to use foodbanks as more have become available. However:
  • this argument is hard to sustain when it is noted that Trussell reports that 76% increase in food banks 'over the past year', which is a considerably smaller increase than that of the number fed . 
  • in the three years up to 2009-10 use increased by a factor of about 4.5, whereas in the three years up to 2012-13 use increased by a factor of about 8.5.

Is this really a crisis?

But even if it given that food banks use has increased, it doesn't follow that this amounts to a  crisis: possibly people are using banks to supplement their own sufficient resources, and they don't really 'need' food banks. If you're reading this it's unlikely you'll subscribe to this point of view, but let's make sure we can justify our response. Here is some fragments of evidence:
  • In a letter published in the British Medical Journal by David Taylor-Robinson from the University of Liverpool and others[3] concern is expressed about the rise in malnutrition related hospital related admissions, which have doubled since 2008-9. They also quote a report by the Institute for Fiscal Studies which has reported a decrease in calories purchased and substitution with unhealthier foods, especially in families with young children[4]. They warn that 'this has all the signs of a public health emergency that could go unrecognised until it is too late to take preventive action'. 
  • The Conservative MP for Wycombe, Steve Baker, speaking in favour of the motion during the debate (that surprised you, didn't it) , said that one in five children in his constituency are going to bed hungry, rising to one in three in some areas, and that 12,000 children in Buckinghamshire live in income poverty[5].
  • Food banks haven't got enough food to give it to people without restriction. The Trussell Trust, for example, requires referring agencies to establish need (selecting a range of categories such as 'waiting for benefit payment') before issuing the necessary voucher. Without a need indicator no voucher will be issued.
  • For the first time since the second world war, the Red Cross is collecting and distributing food to the needy this winter [6]

So there is clear evidence that the use of food banks is increasingly markedly, and that this reflects a real crisis in our society.

Are welfare reforms (at least partly) to blame?

The truth is that we don't know why so many people are having to resort to help from food banks. Iain Duncan Smith, and his department, the DWP, don't think so. And there's obviously other possible causes: increases in fuel costs, below inflation pay rises, and increased part-time work, for example.

And I haven't got any statistics to draw on. All I can do is suggest some possible culprits.

But let's remember a basic detail about means-tested, earnings replacement benefits, like income based Employment and Support Allowance, income based Jobseeker's Allowance, and Income Support. The amount paid, before deductions, is supposed to be the minimum amount a person needs to live on. There is no contingency for occasional large expenses, like replacing a broken fridge, or for any frills, like Christmas presents for your children. So any deduction from this, by definition, results in a claimant living on less than what the government says they need to live on.

  • The Bedroom Tax (which affects tenants of registered social landlords). This one's well known. In a simple example, a healthy 40 year old living alone in a property with two bedrooms for which the rent is £80 per week will normally have to pay £11.20 per week (14%) towards her rent. If she was on income based Jobseeker's Allowance this would eat into her normal weekly amount of £71.70 (for more information: ).
  • Changes to the rules for private sector rented accommodation. These are much more complex, and generally more subtle, but include changes such as restricting the annual increases in local housing allowance figures (essentially, these are the amount of rent that can be paid by housing benefit), and limiting entitlement for those under 35. The Local Government Association (LGA) estimates that the overall effect of these changes reduces weekly entitlement by £25 per week on average[7].
  • The abolition of Council Tax Benefit and its replacement by local provisions. Of their nature the effects of these changes depend on where you live, but in general these changes require many working age claimants to contribute to their Council Tax, even if they are entitled to full means-tested benefits. For example, working-age claimants in Manchester will be expected to pay 8.5% of their bill, which currently works out as £78.16 per year, or £1.50 per week.
  • The Benefit Cap. This restricts total, combined, benefit paid to a maximum of £500 per week for a couple, or £350 for a single claimant. This only impacts on claimants living in London and the south-east, and those with large families, but for those groups the consequences can be severe. A recent case at the supreme court[8] concerned, amongst others, a claimant who had her benefit reduced by £85.40 per week.
  • A new one-year limit on entitlement to contribution based Employment and Support Allowance for many claimants. People affected by this include couples where one partner is unfit for work, and the other is working, but is in low paid work, and is not working enough hours to be entitled to Working Tax Credit. A couple who owned their own home might lose £100.15 per week in this situation.
  • A change to the appeal procedure rules. This has the effect that claimants who are challenging decisions finding them fit for work will have to decide whether to claim Jobseeker's Allowance while the DWP looks at their case, or live off nothing until the 'looking' is concluded. For more information:
  • Changed sanction rules, which have the double whammy effect of making it harder to avoid being sanctioned and getting sanctioned for longer: up to three years in some cases. Many claimants will be able to get hardship payments during sanction periods, but this will normally result in a weekly reduction of £26.68.
  • Finally, loads of little changes that have mostly gone under the radar but overall have big effects. These include: tinkering with the elements, thresholds, and disregards for tax credits; limiting annual rises by 1%; and adjusting housing benefit deductions for non-dependants. The LGA's estimates[7] suggest that these changes will account for about 60% of overall savings in 2015/16. The tax credit adjustments account for about 38% of the savings: many tax credit claimants are, of course, in work.
To be fair, I should also give examples of aspects of the welfare reforms that might increase income, but, apart from Universal Credit, I can't think of any. Universal Credit may assist claimants who are moving into paid employment, but given the substantial delays with this project I'm not willing to include them in the mix.

Overall, the LGA estimates that the income of households claiming benefit will be reduced by £31 per week on average in 2015/16 as a result of benefit reforms excluding Universal Credit[7] (the report quotes government projections that suggest that Universal Credit will reduce the losses by around £4 per week).

In addition to all these specific effects, there is another problem. The combined effects of these changes, and of other issues, is likely to result in increased levels of debt: in fact, it is hard to see how this could be avoided, no matter how well claimants manage their finances. So we need to add the consequential costs of this to the mix.

Arguably the government agrees that the poorest losing out more than most, apart from the very rich. The following chart is taken from the statistical report accompanying the autumn statement[9].

So if you're a single adult, the overall effect of all the government changes is negative if your income is less than about £14,000, or above around £50,000. The chart shows actual cash differences: clearly the proportional effect of someone in the bottom decile losing £1 is greater than that on someone in the top decile.

Where have we got?

We now know that the use of foodbanks has increased, and that there is professional concern that more people are going hungry.

We can see how specific changes in benefits rules are certain to reduce income for many people, and we have noted that for those on income based earnings replacements they were already receiving the legally agreed bare minimum.

And we have seen that government statistics suggest that the poorest are likely to lose out the most due to government decisions, apart from the very rich.

Yes, Mr Duncan Smith. We can't be sure that these dots are joined in the way I'm suggesting. And yes, other factors are certainly at work as well. But it's hard to see how else the facts could be read. Please can we see the Warwick University report now please?