Housing Justice - 1 in 5 people in poverty in Engalnd and Wales today

(originally produced for Poverty and Homelessness Action Week 2008)

In one of the richest countries in the world, over one in five of the population of England live in poverty including about one child in three. Figures are worse in Wales.

This page will examine these figures to give an overall impression of the impact of poverty in England and Wales today. It will also look at the relationship between poverty, poor housing and homelessness.

What is poverty today?
Professor Peter Townsend’s definition of poverty in 1979 is still the the definition accepted by government, academics, and the voluntary sector:

‘Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the type of diet, participate in the activities and have the living conditions and the amenities which are customary, or at least widely encouraged or approved in the societies to which they belong. Their resources are so seriously below those commanded by the average family that they are in effect excluded from the ordinary living patterns, customs, and activities.’
Townsend, P: Poverty in the United Kingdom, Penguin,1979.

Most, but certainly not all families in Britain today have basic levels of shelter and income to survive. The key understanding of poverty is exclusion. Poverty in the UK is about being unable to participate fully in society, and going without the items that other people take for granted, such as a washing machine, television, new clothes, a holiday, or social activities such as occasional trips to the cinema. It means also that people have to watch what they eat and are restricted to a limited range of cheaper products to keep within their weekly budget. (Many items are more expensive for those without a car or bank account, as you will see below.)

The church report Faith in the City (1984) (further information of report and full text available to download here>>) endorsed the view that poverty today means exclusion from full partici-pation in society: ‘Poverty is not about shortage of money. It is about rights and relationships; about how people are treated and how they regard themselves; about powerlessness, exclusion and loss of dignity. Yet the lack of an adequate income is at its heart.’

How many people are living in poverty now?
The most widely used definition of poverty in the UK today is that someone is considered to be in poverty if they receive an income (whether from employment, benefits or a combination of the two) that is less than 60% of median income figure.

This measure is accepted as useful by the government, the European Union, poverty campaigners and others with an interest in the subject because it relates individual family income to income levels in society, so that as society becomes richer the levels increase.

The median is considered to be more representative than the average income as it is less affected by the extremes.

In 2005/2006 the median income was £363 per week (£18,876 per year). In contrast the average income was £445 per week (£23,140 per year). 60% of the median was £217 per week, less than half the average income.

The poverty line – 60% of median income levels
The government publishes yearly figures showing the number of people who are below the 60% of median income level.

These are the latest government figures (for 2005/2006) and relate to the actual income that the individual or family has in their pocket after housing costs and taxes.
• £108 per week (equivalent to £5,616 per year) for a single adult with no dependent children
• £186 per week (£9,672 per year) for a couple with no dependent children
• £222 per week (£11,544 per year) for a single adult with two dependent children
• £301 per week (£15,652 a year) for a couple with two dependent children.

Who is living in poverty?
According to the latest government statistics 12.7million people or 22% of the UK population have incomes below 60% of the median after housing costs and are therefore living in poverty.

Poverty occurs in all age groups – government figures show that :
• 4 million working age adults who are not parents (18% of all working age adults)
• 3.1 million working age parents (25% of all working age parents)
• 1.8 million pensioners (17% of all pensioners)
• 3.8 million children (30% of all children)
• Total 12.7 million people in the UK (22% of the total UK population).

In recent years the numbers of children, pensioners and working-age parents living in poverty has declined as a result of concerted government action through measures such as the Pensioner Minimum Income Guarantee, introduced in 1999, and the government’s focus on stamping out child poverty.

The one group of people for which poverty has not declined are working-age non-parents – nearly half of this group of people is made up of households where at least one of the members is working. This would seem to contradict the government’s emphasis on work as the route out of poverty.

Children and poverty
The figure for the number of people living in poverty in the UK includes 3.8 million children (defined as young people under the age of 16 and those under 18 in full time education). Over 30% of children in the UK today live in poverty. Yet this figure masks large differences within the UK.

In inner London 51% of children live in poverty, followed by outer London, the North East, West Midlands, North West, where there are higher than average rates of child poverty, even in the richest areas – the South East and South West – over 20% of children are living in poverty. In Scotland 25% of children and in Wales 28% of chil-dren live in poverty.

Where is poverty found?
At the start of the twentieth century the researchers Seebohm Rowntree and Charles Booth produced systematic maps of the poverty that they found. If those exercises were repeated today sadly many of the same patterns would emerge. Poverty is found everywhere but particularly is concentrated in inner city areas and estates built after the Second World War on the outskirts of towns.

Living in a ‘poor’ area greatly affects the choices you have. In areas of low incomes there are fewer shops and essential services such as doctors’ surgeries and community facilities. Struggling with poverty in rural areas brings its difficulties too, as you will see below
.
The trend in recent years, identified by the Joseph Rowntree Foundation, has been a move towards greater ine-quality – the poorer areas have got poorer and the richer areas richer. Despite the contribution made by inner city regeneration, the suburbs and outskirts of cities have become richer whilst the inner city areas and outer city estates have become poorer.

Rural poverty
According to the Commission for Rural Communities (CRC) one in five of the rural population, that is 900,000 households, are living below the poverty threshold in rural areas of England. If they all lived in one place it would be a city of the size of Birmingham and would demand much attention. As it is, rural poverty is dispersed and often well-hidden and therefore frequently goes unnoticed or is left ignored. Indeed, even amongst those living in rural communities, almost half are unlikely to recognise the existence of disadvantage in their area.

The hidden nature of rural poverty can be exacerbated by cultural attitudes which lead to people delaying seeking help, trying to cope by themselves or actively hiding their disadvantage. The fear of receiving criticism or being marginalised and the traditional values of pride and self-reliance contribute to the underreporting of the extent and nature of problems. In rural communities, people who find themselves in difficulties frequently do not ask for the support they need for fear of gossip and humiliation by their neighbours.

In many ways, of course, poverty in rural communities is no different to that in urban ones. The ways in which it is addressed, however, need to be more sharply focused. The Poverty and Homelessness Action Week 2008 and the subsequent campaign is intent on acknowledging that poverty is indeed a reality in rural areas, and on facilitating the process whereby the voice of rural poverty is heard. The Arthur Rank Centre is keen to assist those who are interested in organising a local hearing-style event to make the voices heard of people experiencing poverty and homelessness in rural communities. The Arthur Rank Centre sponsors of the Action Week in Eng-land, Scotland and Wales, and is able to advise about the rural aspects of poverty and housing.

Further resources and information produced by the CRC on rural disadvantage can be found at:
www.ruralcommunities.gov.uk//projects/disadvantagestudy/overview

The Carnegie UK Trust has also produced a report that provides helpful background reading; A Charter For Rural Communities. The Final Report of the Carnegie Commission for Rural Community Development
:
Information on rural poverty and housing issues in Scotland and Wales can also be obtained from the websites www.scotland.gov.uk and www.walesruralobservatory.org.uk.

Low income = poor housing?
In most cases living in poverty means a life condemned to the worst housing; overcrowding, insecurity of tenure and states of poor repair are common. As might be expected the people on the lowest incomes are found mainly in social housing (council or housing association homes) – indeed one of the main functions of social housing is to provide good quality housing at an affordable price.

In recent years however, due to the decline in social house building and sales under the right to buy, those on the lowest incomes are increasingly obliged to live in poor quality accommodation in the private sector.

It costs more to be poor! The ‘poverty premium’
In a report published in 2007 researchers from the Family Welfare Association and Save the Children found that families in poverty paid £1,000 a year more a year – as much as 10% of the family budget – for basic goods and services than other families.

Essential services such as electricity and gas supplies cost more because pre-pay meters cost more per unit of energy, and do not allow users to shop around between suppliers nor benefit from direct debit discounts. Similarly the range of credit cards – increasingly important for ordering goods using the internet – is extremely limited if you are on a below average income meaning that annual interest rates of over 40% are not uncommon. In one case a company was charging an APR of 177%.

In many cases even these credit facilities are unavailable to families on low incomes who are forced to use ‘doorstep’ lenders who lend comparatively small sums such as £500 and force borrowers to repay debts on a weekly basis with an effective interest rate of over 100% APR.

Families who are unable to get credit cards or other home credit have little choice but to go to shops or use catalogues that offer apparently easy credit for basic consumer goods such as a refrigerator or washing machine. In many cases these goods are more expensive than conventional shops and offered on credit terms with ‘optional’ insurance, which can mean that the real cost over two years is more than double that charged by other shops.

In many cases bank branches have left poorer areas and so people on low incomes who are generally more dependent on using cash, are forced to pay fees for withdrawing money from in-store cash dispensers. This is about £1.50–£2 a withdrawal which effectively means that the cash machine provider is charging an interest rate of 15% on a £10 cash withdrawal. The researchers also found that low income households are more likely to pay higher rates for car and home contents insurance – this reflects the increased crime levels in less prosperous areas.

Other research has indicated that those on low incomes pay more for basic food items. This arises because there is less choice, and in some cases no choice, of food shops in poorer areas, so families are unable to take advantage of special offers and low prices in larger supermarkets which are often a bus or car ride away. Many people also find that they are unable to afford to buy products in bulk or afford a weekly shop, so end up paying more.

Poverty, homelessness and bad housing
Poverty is closely linked to poor housing and homelessness both as a cause (unaffordable housing pushes families into poverty) and an effect (poor families are unable to afford good quality accommodation.) Many of the problems that the CHAS housing advice centres deal with are a combination of poverty and housing problems.

Clearly you are unlikely to have housing problems if you have sufficient income to choose a good quality home that meets your needs.

How many people are homeless in England and Wales?
To most people, ‘the homeless’ are the people seen in town centres who sleep rough. Rough sleepers suffer from the most extreme form of homelessness. Homelessness and poor housing is a much wider problem.

Anyone is at risk of homelessness – it takes only a bit of bad luck, such as a combination of family breakdown and unemployment for an individual or family to find themselves without a home.

People who are homeless include:
• Families living in poor quality temporary accommodation while they await rehousing.
• Families living in overcrowded accommodation.
• People sleeping on friends’ floors or sofas or squatting in empty houses as they are unable to afford their own place.
• Young people who cannot afford their own accommodation and are forced to live with their parents.
• Gypsies and Travellers who are unable to find a legal site on which to stay and who have to use unauthorised sites, risking eviction at very short notice.
• People living in hostels, night shelters and other forms of non-permanent accommodation.
• People threatened with eviction and loss of their home.

Anyone who is homeless or threatened with homelessness can apply to their local council for rehousing. How-ever, applicants are unlikely to be accepted unless they fall into one of the priority need categories specified in the legislation and are found to be unintentionally homeless – that is, they have not deliberately brought the situation on themselves – and have a local connection to the area. Evidence from CHAS Housing Advice Centres suggests significant variance between local authorities on how they interpret the legislation.

The latest government figures show that in England in the year 2006–2007, 159,330 families applied to their local council for rehousing.
Forty five percent of those – 73,360 families – were accepted for rehousing by their local authority under the terms of the homelessness legislation, in that they were in priority need and unintentionally homeless.

The figures mark a continuing decline in the number of homeless families accepted for rehousing, which the government has attributed to new approaches, implemented after 2002, aimed at preventing homelessness. However, the average wait on the housing list for a family is four years.

Rough sleeping
The most extreme form of homelessness is rough sleeping, where people are literally roofless and live on the streets. Following government action from 1998 onwards the number of people sleeping rough in England has fallen from 1,850 to 502 in 2006.

In recent years the numbers sleeping rough have begun to rise again in central London as migrant workers from Eastern Europe have little altern-ative if they lose their jobs, as they are not entitled to benefits unless they have contributed National Insurance payments for 12 months continuously.

‘Hidden’ homeless people
Many homeless people do not approach their local authority for help because they know they do not fall into one of the priority need categories and so are unlikely to be rehoused. The charity Crisis estimates that there are up to 400,000 hidden homeless people in Great Britain – these are single people who live in crowded accommoda-tion, squats and hostels as well as those sleeping on friends’ floors and sofas.

Refused asylum seekers and irregular migrant workers are also hidden homeless, moving from one insecure place to another. Some regular migrant workers are accommodated in appallingly overcrowded and unhygienic conditions, and frequently over-charged as the costs are deducted from their wages by gangmasters. People in this group do not show up in official homelessness figures.

Non-statutory homelessness
Non-statutory homelessness describes the groups of people who are not eligible for rehousing under the terms of the homelessness legislation – generally younger people without families who are not in one of the priority need groups.

Although not eligible for rehousing under the terms of the homelessness legislation, non-statutory homeless people are generally entitled to housing benefit and so are able to gain a place in a hostel.

One significant group of people who are not entitled to benefit are workers from Eastern Europe who must have made 12 months National Insurance contributions before they are entitled to housing and other benefits.

There are estimated to be between 40,000 and 50,000 beds available to homeless people in hostels. These range from short stay hostels which provide beds on a night by night basis for people who are admitted in an emergency. Often the homeless person will undergo an assessment before being referred on to a longer stay hostel where they might stay for several months or in some cases longer.

Hostels have been much improved recently, and social workers and others will encourage the homeless person to overcome problems that may have contributed to homelessness, such as addiction, mental or physical health problems and unemployment, before arranging for them to be rehoused in ‘move-on’ supported accommodation and finally settled in private or social housing.

Hostels are generally run by independent charities but financed by a combination of local authority funding and the income they gain from housing benefit. As a result they are able to offer only the housing for which they are able to attract funding. However, the funding may place restrictions on hostels’ activities as they will be unable to take clients for which there is no funding.

Day centres provide services to homeless people who have beds in hostels, are on the street or in insecure ac-commodation. Generally, day centres provide food, healthcare, training and other activities and services for homeless people, and are funded usually by a mixture of local authority and grant funding. These services are generally able to provide help to people in need regardless of their circumstances.

A final group of services that provide a vital if small scale service are local churches which open up shelters and other services especially in the winter months. Whilst these are often extremely basic they provide a much-needed service for rough sleepers. Housing Justice works to support these voluntary church-based services which are sometimes the only help available to rough sleepers, and may be a bridge to the statutory services.

Statutory homelessness
Statutory homelessness describes people who local authorities have a duty to rehouse under the terms of the homelessness legislation. Generally, those who are not in one of the priority need groups are not covered and so are not counted in official figures.

Who is homeless in England?
Government figures show that of those accepted in 2005–2006 for rehousing by local authorities:
• 49,080 households (67% of the total) were families with children or where the mother was pregnant
• 6,390 (9%) were young people aged 16 and 17 and care leavers under 21
• 5,420 (7%) were classed as vulnerable due to mental illness
• 2,980 (4%) were vulnerable as a result of domestic violence
• 3,590 (5%) were vulnerable due to physical disability
• 1,400 (2%) were vulnerable due to old age.

And the remaining 6% were vulnerable due to reasons such as time spent in care, in custody, in the forces and from fleeing violence other than domestic violence.

The proportions for each category of priority need have not changed substantially over the last five years.

Reasons for homelessness in England
Government figures show that the three main factors that cause people to be homeless are:
• Relatives or friends no longer being willing or able to provide accommodation (37% of homeless households)
• Breakdown of relationship with partner (20% of homeless households, 13% of homeless households have suffered from domestic violence)
• The end of a tenancy, loss of rented accommodation or mortgage arrears (18% of homeless people).

Where are people homeless in England?
Homelessness happens all across England and although most of it is concentrated in the large urban areas such as London, Birmingham and Greater Manchester, councils in some rural areas such as Nottinghamshire, Corn-wall and the Peak District also report higher than average numbers of homeless people.

Who is homeless in Wales?
The latest Welsh Assembly Government figures show that in the year 2006-2007, 14,875 families applied to their local council for rehousing. Forty-six percent of those that applied – 6,802 families – were accepted for rehousing by their local authority under the terms of the homelessness legislation: they were in priority need and uninten-tionally homeless.
Government figures show that of those accepted in 2006–2007 for rehousing by local authorities:
• 3,312 households (49% of the total) were families with children or where the mother was pregnant
• 828 (12%) were young people aged 16 and 17 and care leavers under 21
• 796 (12%) were former prisoners with no accommodation to return to
• 746 (11%) were vulnerable as a result of domestic violence
• 350 (5%) were classed as vulnerable due to mental illness
• 271 (4%) were vulnerable due to physical disability
• 189 (3%) were vulnerable due to old age.
The remaining 4% were vulnerable due to reasons such as time spent in care, in custody, in the forces and from fleeing violence other than domestic violence.

The proportions for each category of priority need have not changed substantially over the last five years.

Reasons for homelessness in Wales
The Welsh Assembly Government figures show that the three main factors that cause people to be homeless are:
• Relatives or friends no longer being willing or able to provide accommodation (31% of homeless people).
• The end of a tenancy, loss of rented accommodation or mortgage arrears (21% of homeless people).
• Breakdown of relationship with partner (21% of homeless people; 14% of homeless people have suffered from domestic violence).

Where are people homeless in Wales?
Homelessness happens all across Wales, and while the greatest number of homeless people are in Swansea and Cardiff, councils in rural areas such as Pembrokeshire, Carmarthenshire and Caerphilly also report higher than average numbers of homeless people.

Debt On Our Doorstep campaign
The Debt On Our Doorstep campaign tackles high street lenders and unfair credit.

Church Action on Poverty and Housing Justice are members of Debt On Our Doorstep, which is leading a campaign against extortionate lending and seeks to promote responsible lending and models of affordable credit so that those on low incomes do not have to pay over the odds for financial services.

Further information on the campaign is available at www.debt-on-our-doorstep.com. Church Action on Poverty and others are campaigning for a cap on interest rates charged by commercial lenders, and the growth of credit unions to make low-cost responsible borrowing available to those on low incomes.

The Living Ghosts campaign
The Living Ghosts campaign highlights the return of absolute poverty to Britain.

One group of people do not receive even the basic benefits that most British people take for granted and are prevented from working. People seeking asylum in the UK who have had their application refused – often because they are wrongly advised, do not have the correct documents with them or cannot fulfil the strict criteria for being accepted – sometimes cannot be deported to their country of origin because it is not possible or safe to do so.

Government policy is to offer very basic support if applicants say they will ‘voluntarily’ return to the place they fled when it is judged to be safe.

Many asylum seekers and refugees have fled death threats and torture to come to the UK and so are reluctant to accept this help because of the obligation to return. So instead they face a life of destitution on the streets – dependent on handouts and often having to sleep rough, they become ‘living ghosts’. We believe that this is inhumane and morally wrong.

The Living Ghosts campaign run by Church Action on Pov-erty is attempting to get the government to change policy.
For the latest news from the campaign see the campaigns section of the Church Action on Poverty website at www.church-poverty.org.uk/campaigns.

Government pledges end to child poverty by 2020
‘Our historic aim will be for ours to be the first generation to end child poverty forever.’

In 1999, Prime Minister Tony Blair gave a historic commitment to end child poverty within a generation. The government set itself the goal of reducing the numbers of children living in poverty year on year so that by 2020 no children will have to live in poverty (ie: live in households with less than 60% of the median income).

Two mile-stones were set – the government would reduce the 1999 child poverty level of 4.3 million children by a quarter by 2004/2005 and by half by 2010/2011.

Since the pledge was made in 1999 over 500,000 children have been lifted out of poverty but crucially the 2004/2006 milestone was missed. The then Chancellor Gordon Brown pledged that the government would redouble efforts to meet the pledge.

Since becoming Prime Minister, Brown and other government minister have emphasised that the government is still working to meet the pledge of ending child poverty by 2020.

The Conservative Party and Liberal Democrats have also pledged that if elected they will continue government efforts to end child poverty.

A living wage
The current national minimum wage is £5.52 per hour for workers over the age of 22 which equates to £220 a week (assuming a 40 hour working week) or £11,481 a year. Once housing costs have been taken into account many workers on the minimum wage fall below the poverty line even if they also receive tax credits and benefits to supplement their income from employment.

In March 2007 the Mayor for London, Ken Livingstone, published a report produced by economists at the Greater London Authority (GLA) which suggested that £7.20 an hour was the minimum wage required to live in London. This London living wage figure assumes that workers would also receive means tested benefits such as housing benefit, council tax benefit and tax credits to supplement their low income from work. Without these supplements the GLA estimated that Londoners need a wage of around £9.15 an hour (or £366 a week) to be able to live in London and not suffer from poverty.

Different approaches to measuring poverty
In 2000 the Joseph Rowntree Foundation (JRF) funded research which attempted to look at what people considered necessities for life.
The researchers questioned a sample of people and drew up a list of items and activities which everyone should be ‘able to afford and which they should not have to do without.’

The ‘socially perceived necessity’ list of around 50 items ranged from the basics such as being able to heat the home, buy fresh fruit, and ensure two meals daily, to leisure activities like being able to celebrate family birthdays, go to the cinema occasionally and be able to afford bigger purchases such as replacing worn out furniture when required.

The survey found that:
• Around 9.5 million people cannot afford to keep their homes adequately heated, free from damp or in a de-cent states of decoration – the housing conditions that most people regard as ‘adequate’.
• Some 8 million people cannot afford one or more essential household goods such as a fridge, a telephone or carpets for the living areas in their homes.
• Around 4 million people are not fed properly by today’s standards. For example, they do not have enough money to afford fresh fruit and vegetables, or two meals a day.
• Some 6.5 million adults go without essential clothing – such as a warm, waterproof coat – because of lack of money.
• About 10 million adults cannot afford regular savings of £10 a month or more for a ‘rainy day’ or retirement.
• Almost 7.5 million people are too poor to engage in social activities considered necessary such, as visiting friends and family, attending weddings and funerals or having celebrations on special occasions.

This ‘soft’ approach to measuring poverty is useful as it enables us to think about what living in poverty actually means and what we would have to give up. It provides more of an insight than the ‘hard’ government statistics.

The results of Poverty Hearings that are being organised as part of the Poverty and Homelessness Action Week will be another way of measuring what poverty actually means. The organisers will incorporate the findings you send to us into a national report.

Homelessness legislation
Homelessness in England and Wales is governed by the 1977 Housing (Homeless Persons) Act and the 2002 Homelessness Act. In Wales, the Homeless Persons (Prior-ity Need) order of 2001 introduced new priority need categories largely in line with the 2002 Homelessness Act.
The 1977 Act was introduced after pressure from homelessness charities including Housing Justice’s predeces-sor CHAS. The Act gave local authorities the legal duty to re-house homeless people if they fall into one of four priority need categories:
• Pregnant women.
• People with dependent children.
• People who are vulnerable due to old age, mental illness or physical or mental disability.
• People made homeless as a result of an emergency such as a flood or fire.
The 2002 Act added five further categories of priority need:
• People aged 16 or 17.
• People under 21 who have been in local authority care.
• People over 21 who are vulnerable as a result of having been in local authority care.
• People who are vulnerable due to an institutional background such as having served in the armed forces or having spent time in prison.
• People fleeing violence or the threat of violence.
Priority need is automatic under the first two categories of the 2002 Act but vulnerability must be proved for the remaining three categories.
As well as proving that they fall into one of the priority groups to be eligible for rehousing, people must prove that they are non-intentionally homeless, ie: have not deliberately brought the situation on themselves.
The homelessness legislation provides the basis for quantifying the number of homeless households in England and Wales.
The figures published are for the number of households, in most cases families, and so the actual number of individuals affected by homelessness is much greater. The majority of recognised homeless households include children.

Further information
Homelessness figuires are collated by each local authority in England and transferred to the Communities and Local Government department which publishes them for all of England on a quarterly basis.
Latest statutory homelessness figures>>